1017-00004 · Entities. Aurelius Global Media Group · Mediation & Settlement/Aldrich

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CALDERWOOD & HARKNESS LLP 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200

CONFIDENTIAL — FOR MEDIATION ONLY SUBJECT TO CALIFORNIA EVIDENCE CODE § 1119 NOT ADMISSIBLE IN ANY PROCEEDING

MEDIATION BRIEF OF DEFENDANT AND CROSS-COMPLAINANT AURELIUS MEDIA AMERICAS INC.

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I. INTRODUCTION

Aurelius Media Americas Inc. ("AMA"), a wholly owned United States subsidiary of Aurelius Global Media Group PLC ("AGMG"), respectfully submits this confidential mediation brief in advance of the standalone mediation session scheduled for December 8, 2023, before the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc. This brief is submitted solely for use in the mediation and is protected in its entirety by the confidentiality provisions of California Evidence Code section 1119 and the parties' Mediation Agreement. Nothing contained herein shall be construed as an admission of liability, an acknowledgment of the merits or lack of merits of any claim or defense, or a waiver of any right or privilege.

AMA approaches this mediation in good faith, with a genuine commitment to achieving a fair and efficient resolution of the remaining individual employment dispute with its former Senior Vice President of Original Content & Executive Producer, Gavin Aldrich. AMA's leadership and its Board have authorized counsel to engage substantively and with appropriate flexibility, consistent with the company's strong preference for bringing this matter to a definitive close.

The present mediation occurs at a particularly opportune moment for resolution. Since the last combined mediation session on September 8, 2023, AMA has made substantial progress toward resolving the companion class action, Fuentes v. Aurelius Media Americas Inc., Case No. 22STCV38214, through a $14,750,000 court-approved class settlement. The Preliminary Approval Order was entered by the Honorable Catherine Villanueva on October 18, 2023, class notice was mailed to all members of the settlement class on November 3, 2023, and the final approval hearing is calendared for February 2, 2024. The class settlement has proceeded without material obstacles — only 23 class members have opted out, representing approximately 1.24% of the class, and the four objections received have all been non-substantive. With the class action on a clear trajectory toward final approval, AMA now turns its full attention to resolving the Aldrich matter efficiently and comprehensively.

AMA and Mr. Aldrich previously participated in a combined mediation session on September 8, 2023, also before Hon. Okoro, which addressed both the Fuentes class action and the Aldrich dispute. That session yielded a productive resolution of the class claims but did not result in a settlement of the Aldrich matter. At the close of that session, the gap between the parties stood at approximately $1.2 million on the cash component — Mr. Aldrich's last position was $3.2 million and AMA's was $2.0 million — and the parties remained apart on several important non-monetary terms, including: (1) the treatment of Mr. Aldrich's unvested restricted stock units ("RSUs"), where Mr. Aldrich demanded full acceleration of all 15,300 unvested units while AMA offered acceleration of 8,000 units; (2) the scope of any restrictive covenant release, where Mr. Aldrich sought a release of all post-employment obligations including his confidentiality obligations under Section 9.4 of his Employment Agreement, which AMA was and remains unwilling to concede; and (3) the duration of a mutual non-disparagement provision, where Mr. Aldrich sought an unlimited term and AMA proposed a three-year period.

In the three months since the September session, both sides have had time to reflect on their respective positions, assess the risks inherent in continued litigation, and recalibrate expectations. The resolution of the class action has removed a significant source of distraction and complexity for both the company and the Court, and has allowed AMA to devote its analytical and financial resources to a thorough reassessment of the Aldrich matter in isolation. AMA has refined its damages analysis, revisited its assessment of litigation risk on both its affirmative and defensive claims, and developed a revised settlement proposal that it believes provides a reasonable and defensible basis for resolution.

As set forth in detail below, AMA proposes a comprehensive settlement in the range of $2.0 million to $2.5 million in cash, together with acceleration of 10,200 of Mr. Aldrich's 15,300 unvested RSUs and significant concessions on the restrictive covenant provisions, in exchange for a mutual general release, the return or certified deletion of all AMA proprietary materials in Mr. Aldrich's possession, a neutral reference, and a mutual non-disparagement provision. AMA believes this proposal is fair, accounts for the meaningful litigation risk on both sides of the case, and represents a basis upon which the parties can negotiate a final resolution with the assistance of Hon. Okoro.

II. BACKGROUND — PARTIES AND RELATIONSHIPS

A. Aurelius Media Americas Inc.

Aurelius Media Americas Inc. is a Delaware corporation (Delaware File No. 5284731) qualified to do business in the State of California, with its principal office located at 8500 Sunset Boulevard, Suite 1400, West Hollywood, California 90069. AMA is a wholly owned subsidiary of Aurelius Global Media Group PLC, a public limited company organized under the laws of England and Wales (Companies House No. 08412667), whose ordinary shares are listed on the London Stock Exchange under the ticker symbol "AGMG."

AMA is a leading entertainment company in the United States, with primary operations in the development, production, and distribution of unscripted and reality television programming, digital content, and branded entertainment. The company maintains a workforce of approximately 3,200 employees in the United States, of whom approximately 2,400 are based in California. For the fiscal year ended December 31, 2022, AMA reported United States revenues of approximately $687.4 million. AMA's programming is distributed across major broadcast and cable networks as well as digital streaming platforms in the United States and internationally.

The relevant members of AMA's senior management team for purposes of this dispute include: Jonathan Mercer, President; Lorraine Okafor, Senior Vice President of Human Resources; and Gregory Tanaka, Vice President of Legal & Compliance.

B. Gavin Aldrich

Gavin Aldrich is a veteran entertainment executive who served as AMA's Senior Vice President of Original Content & Executive Producer from September 5, 2017 through October 14, 2022. Mr. Aldrich's employment was governed by an Employment Agreement dated September 5, 2017, as amended by a First Amendment dated August 1, 2020 (collectively, the "Employment Agreement"). At the time of his termination, Mr. Aldrich's compensation included a base salary of $485,000 per annum. His last annual bonus, for fiscal year 2021, was $225,000. In connection with his employment, Mr. Aldrich was also granted 42,500 restricted stock units in AGMG under the parent company's equity compensation plan. Of those RSUs, 15,300 remained unvested at the time of his termination on October 14, 2022, and were forfeited pursuant to the terms of the for cause termination.

Mr. Aldrich resides at 1140 Tower Road, Beverly Hills, California 90210. He is represented in this action by Cameron Whitfield (Principal) and Julia Nazarian (Associate) of Whitfield & Associates, located at 9465 Wilshire Boulevard, Suite 320, Beverly Hills, California 90212.

C. Defense Counsel

AMA is represented in this matter by Calderwood & Harkness LLP. Renata Vasquez, Partner (State Bar No. 224578), serves as the responsible attorney, and Devon Archer, Senior Associate (State Bar No. 301462), serves as lead associate. Calderwood & Harkness's offices are located at 777 South Flower Street, Suite 4200, Los Angeles, California 90017.

III. PROCEDURAL HISTORY

The procedural history of this matter reflects a case that has matured through the discovery phase and is now ripe for resolution. The principal events are as follows:

October 14, 2022: AMA terminated Mr. Aldrich's employment for cause, pursuant to Section 7.2(b) of the Employment Agreement, based on unauthorized transmission of confidential information and proprietary materials to third parties and insubordination.

October 28, 2022: Mr. Aldrich's counsel, Cameron Whitfield of Whitfield & Associates, transmitted a pre-litigation demand letter to AMA asserting claims for wrongful termination, breach of contract, and related causes of action, and demanding $4.15 million in total compensation.

December 9, 2022: Mr. Aldrich filed his Complaint in the Superior Court of the State of California, County of Los Angeles, commencing this action under Case No. 22STCV41087. The matter was assigned to the Honorable Catherine Villanueva in Department 52. The Complaint asserts five causes of action: (1) wrongful termination in violation of public policy; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) declaratory relief regarding the enforceability of post-employment restrictive covenants; and (5) violation of California Labor Code section 2802 (failure to reimburse business expenses).

January 20, 2023: AMA filed its Answer to the Complaint, denying the material allegations and asserting affirmative defenses including just cause, unclean hands, and failure to mitigate damages. Concurrently, AMA filed a Cross-Complaint against Mr. Aldrich asserting four causes of action: (1) breach of the Employment Agreement (Sections 9.2, 9.3, and 9.4); (2) misappropriation of trade secrets under the California Uniform Trade Secrets Act ("CUTSA"), California Civil Code section 3426 et seq.; (3) breach of fiduciary duty; and (4) conversion.

March 22, 2023: The Court granted in part Mr. Aldrich's Motion to Strike portions of the Cross-Complaint, finding that the caption of AMA's First Cause of Action improperly referenced Section 9.1 (the non-competition clause), which is unenforceable under California Business and Professions Code section 16600. The Court ordered AMA to amend the Cross-Complaint to clarify that AMA was not seeking to enforce the non-competition provision.

April 5, 2023: AMA filed its First Amended Cross-Complaint, removing the reference to Section 9.1 from the First Cause of Action caption and clarifying that AMA does not seek to enforce the non-competition clause. The amended pleading continues to assert breach of Sections 9.2, 9.3, and 9.4.

April 14, 2023: AMA filed a Motion to Compel Further Responses from Mr. Aldrich with respect to Requests for Production Nos. 8 and 11 through 14, which sought communications between Mr. Aldrich and Halcyon Creek Productions LLC, including but not limited to emails, text messages, and any draft agreements or proposals relating to the transmitted proprietary materials. That motion remains pending as of the date of this brief, though the parties have engaged in informal conferral regarding the outstanding discovery.

May 22, 2023: Mr. Aldrich's deposition was taken at Calderwood & Harkness's offices, extending through the full seven hours permitted under Code of Civil Procedure section 2025.290. As discussed in greater detail below, Mr. Aldrich's testimony on the Halcyon Creek transmissions was notably unfavorable to his position.

September 8, 2023: The parties participated in a combined mediation session before Hon. Okoro, which addressed both the Fuentes class action and the Aldrich individual dispute. The class action settled; the Aldrich matter did not, with the parties' respective final positions as described in the Introduction.

Discovery in this matter is substantially complete. The case is ripe for resolution, and both parties would benefit from avoiding the substantial costs and uncertainty of trial.

IV. SUMMARY OF CLAIMS AND CROSS-CLAIMS

A. Aldrich's Claims Against AMA

Mr. Aldrich's Complaint asserts five causes of action against AMA, which are summarized as follows:

1. Wrongful Termination in Violation of Public Policy (First Cause of Action)

Mr. Aldrich alleges that his termination was retaliatory, motivated not by the ostensible grounds stated in his termination letter, but by his objections to a directive issued by AMA President Jonathan Mercer in early October 2022 relating to a proposed restructuring of certain production teams. Mr. Aldrich characterizes the Mercer directive as an effort to misclassify employees — converting full-time, benefits-eligible positions to independent contractor relationships in order to reduce labor costs — and contends that his termination for opposing such misclassification constitutes a violation of public policy under the Tameny v. Tarrant Holdings (1980) 27 Cal.3d 167 doctrine. Mr. Aldrich asserts that his objection to the restructuring constituted protected activity and that the purported for cause grounds were pretextual.

2. Breach of Contract (Second Cause of Action)

Mr. Aldrich contests the designation of his termination as "for cause" under Section 7.2(b) of the Employment Agreement. He contends that the factual circumstances underlying the termination do not satisfy any of the enumerated grounds for cause under the Agreement, and that the termination was, in substance, a without cause termination, entitling him to the full severance package specified in Section 7.3 of the Employment Agreement. The claimed severance components include:

• Severance payment of $970,000, representing twenty-four (24) months of base salary at $485,000 per annum;

• Pro-rata annual bonus for fiscal year 2022, calculated at $168,750 ($225,000 × 9.5/12 months);

• Accelerated vesting of all 15,300 unvested AGMG restricted stock units, valued at approximately $332,200 based on the October 2022 share price of approximately £18.79 per share (converted at $1.155 per pound sterling, yielding approximately $21.71 per share);

• Continuation of employer-subsidized COBRA health insurance coverage for eighteen (18) months, estimated at approximately $50,400 (18 months × approximately $2,800 per month).

3. Breach of Implied Covenant of Good Faith and Fair Dealing (Third Cause of Action)

Mr. Aldrich alleges that AMA acted in bad faith by manufacturing the for cause designation in order to avoid paying the severance benefits to which he was contractually entitled and to trigger the forfeiture of his unvested RSUs under the equity compensation plan. He contends that AMA's true motivation for the termination was the restructuring dispute, and that the confidentiality-violation grounds were identified and invoked only after the decision to terminate had already been made on improper grounds, rendering the for cause designation pretextual and in bad faith.

4. Declaratory Relief — Restrictive Covenants (Fourth Cause of Action)

Mr. Aldrich seeks a judicial declaration that three of the four post-employment restrictive covenants in his Employment Agreement are void or unenforceable under California law. Specifically, he contends:

(a) That Section 9.1 — an eighteen-month post-termination non-competition clause prohibiting Mr. Aldrich from working for any "Competing Enterprise" (defined as any entity deriving 25% or more of its revenue from unscripted or reality television programming in North America) — is void under California Business and Professions Code section 16600, which provides that "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." This position is well-supported by Edwards v. Kraft Quill CPAs LLP (2008) 44 Cal.4th 937, in which the California Supreme Court held that section 16600 prohibits non-competition agreements, subject only to narrow statutory exceptions not applicable here.

(b) That Section 9.2 — a twenty-four-month post-termination employee non-solicitation clause — and Section 9.3 — a twenty-four-month post-termination business non-solicitation clause prohibiting Mr. Aldrich from soliciting "any network, platform, or advertiser client" with whom he had "material contact" during the twenty-four months preceding his termination — are void or unenforceable as de facto non-competition agreements under section 16600 and the principles articulated in The Retirement Group v. Galante (2009) 176 Cal.App.4th 1226.

(c) That the New York choice-of-law provision in Section 14.3 of the Employment Agreement does not override California's fundamental public policy against non-competition agreements, under the analysis set forth in the Restatement (Second) of Conflict of Laws section 187(2) and Application Group, Inc. v. Hunter Group, Inc. (1998) 61 Cal.App.4th 881.

5. Violation of California Labor Code Section 2802 (Fifth Cause of Action)

Mr. Aldrich alleges that AMA failed to reimburse him for approximately $28,400 in business expenses incurred during fiscal year 2022, including travel expenses, client entertainment costs, and cell phone charges, all of which Mr. Aldrich contends were necessary expenditures incurred in the direct discharge of his duties as SVP of Original Content. Section 2802 requires an employer to indemnify its employees for all necessary expenditures or losses incurred in direct consequence of the discharge of their duties.

B. AMA's Cross-Claims Against Aldrich

AMA's First Amended Cross-Complaint asserts four causes of action against Mr. Aldrich, arising out of his unauthorized transmission of AMA proprietary materials to his personal email account and to a third-party competitor during his employment:

1. Breach of Employment Agreement — Sections 9.2, 9.3, and 9.4 (First Cause of Action)

AMA alleges that Mr. Aldrich breached his contractual confidentiality obligations under Section 9.4 of the Employment Agreement by engaging in the unauthorized transmission of approximately 340 emails containing proprietary information from his AMA-issued corporate email account to his personal email account (galdrich.private@Northgate Software.com) over a period of approximately fourteen months, from July 2021 through September 2022. More significantly, AMA alleges that Mr. Aldrich transmitted, via seven separate emails, three complete show format bibles — for the programs tentatively titled "Apex Endurance," "The Remix," and "Untamed West" — two pilot sizzle reels, and the detailed revenue model for AMA's "Summit Challenge" franchise to Halcyon Creek Productions LLC, a California limited liability company formed on February 14, 2022 by Nina Castellanos, a former AMA development executive. The transmissions were sent to the email address info@halcyoncreekprod.com.

Section 9.4 of the Employment Agreement provides, in pertinent part, that Mr. Aldrich shall not, during or after his employment, directly or indirectly disclose, publish, or otherwise transmit any Confidential Information (as defined therein) to any person or entity other than in furtherance of his duties to AMA. AMA contends that the transmissions to Mr. Aldrich's personal email account and to Halcyon Creek Productions were wholly unauthorized, served no legitimate business purpose, and constituted a material breach of Section 9.4 and of the Employment Agreement as a whole.

2. Misappropriation of Trade Secrets — CUTSA (Second Cause of Action)

AMA alleges that the materials transmitted by Mr. Aldrich — including the show format bibles, the Summit Challenge revenue model, audience analytics data, and talent deal terms — constitute "trade secrets" within the meaning of California Civil Code section 3426.1(d). These materials derive independent economic value from not being generally known to the public or to competitors and from not being readily ascertainable by proper means. AMA maintained reasonable measures to protect their secrecy, including confidentiality agreements with all employees and contractors, access-restricted content management systems, digital watermarking of proprietary documents, and the Acceptable Use and Confidentiality Policy that Mr. Aldrich acknowledged and signed on April 12, 2021.

Mr. Aldrich's acquisition and transmission of these materials to Halcyon Creek Productions — an entity owned by his former business associate and itself a potential competitor in the unscripted television space — constitutes misappropriation under CUTSA, whether characterized as acquisition by improper means, disclosure of information acquired under circumstances giving rise to a duty to maintain secrecy, or use (or intended use) of trade secret information without consent.

AMA notes that the Summit Challenge franchise is one of the company's most commercially significant properties, generating approximately $42 million in annual revenue. The revenue model transmitted to Halcyon Creek contains granular, competitively sensitive information including detailed per-episode production costs, network license fee structures, international distribution revenue allocations, advertising CPM rates, and talent compensation structures. The disclosure of this information to a competitor could cause substantial economic harm to AMA.

3. Breach of Fiduciary Duty (Third Cause of Action)

As Senior Vice President and an officer of AMA, Mr. Aldrich owed fiduciary duties of loyalty and care to the company. AMA alleges that Mr. Aldrich's unauthorized disclosure of proprietary information and trade secrets to Halcyon Creek Productions — an entity owned by his former business associate, Nina Castellanos — constitutes a breach of Mr. Aldrich's fiduciary duty of loyalty. The transmissions served Mr. Aldrich's personal interests (and potentially Ms. Castellanos's interests) to the detriment of AMA, and were undertaken without authorization, disclosure, or approval from any superior officer or from AMA's Board.

4. Conversion (Fourth Cause of Action)

AMA alleges that Mr. Aldrich's unauthorized appropriation and transmission of AMA's proprietary digital files — including show format bibles, sizzle reels, and the Summit Challenge revenue model — constitutes conversion. Mr. Aldrich exercised dominion and control over AMA's property in a manner inconsistent with AMA's ownership rights, by forwarding these materials to his personal email account and transmitting them to a third party without authorization.

V. AMA'S POSITION ON THE MERITS

This section sets forth AMA's candid assessment of the strengths and vulnerabilities of both parties' positions. AMA provides this assessment to the mediator in the interest of facilitating a productive and well-informed settlement discussion.

A. The For Cause Termination Is Defensible

AMA terminated Mr. Aldrich's employment for cause under Section 7.2(b) of the Employment Agreement, relying on two independent grounds. AMA's assessment of each ground is set forth below.

Ground 1 — Unauthorized Transmission of Confidential Information (Strong)

The primary basis for the for cause termination was Mr. Aldrich's unauthorized transmission of AMA proprietary information and trade secrets, in violation of Section 9.4 of the Employment Agreement and AMA's Acceptable Use and Confidentiality Policy.

The relevant chronology is as follows: AMA's Information Technology security team initiated a routine data loss prevention ("DLP") audit in August 2022 as part of the company's ongoing cybersecurity program. Preliminary findings from the audit were reported to Vice President of Legal & Compliance Gregory Tanaka on September 6, 2022 — critically, this date is before the October insubordination incident, establishing that the investigation predated the restructuring dispute. A comprehensive forensic review of Mr. Aldrich's AMA-issued laptop was completed on October 3, 2022.

The forensic review revealed the following:

• Approximately 340 emails had been forwarded from Mr. Aldrich's corporate email account to his personal email address (galdrich.private@Northgate Software.com) over a fourteen-month period from approximately July 2021 through September 2022. These emails contained a wide range of AMA proprietary information.

• Seven (7) emails had been transmitted from Mr. Aldrich's corporate email account to info@halcyoncreekprod.com, the email address of Halcyon Creek Productions LLC, a California LLC formed on February 14, 2022 by Nina Castellanos, a former AMA development executive. These seven emails contained, as attachments, three complete show format bibles ("Apex Endurance," "The Remix," and "Untamed West"), two pilot sizzle reels, and the Summit Challenge revenue model.

These findings constitute a clear and material violation of Section 9.4 of the Employment Agreement, which prohibits the disclosure or transmission of Confidential Information to any person or entity other than in furtherance of Mr. Aldrich's duties. They also constitute a violation of AMA's Acceptable Use and Confidentiality Policy, which Mr. Aldrich signed and acknowledged on April 12, 2021.

Under Section 7.2(b) of the Employment Agreement, this conduct satisfies at least two of the enumerated grounds for cause:

• Section 7.2(b)(i) — material breach of the Employment Agreement: The unauthorized transmissions are a clear material breach of Section 9.4. This ground is strong.

• Section 7.2(b)(vi) — material violation of written policies of the Company: The Acceptable Use and Confidentiality Policy is a written policy of AMA, and Mr. Aldrich's violations were material. This ground is strong.

Additionally, the conduct provides a moderate basis for Section 7.2(b)(ii) — misappropriation of Company property or trade secrets.

Ground 2 — Insubordination (Weaker)

The secondary basis for the for cause termination was Mr. Aldrich's insubordination and refusal to comply with a lawful directive from AMA's President, Jonathan Mercer, regarding a proposed restructuring of production teams.

The relevant events occurred in rapid succession:

• October 10, 2022: In a meeting with President Mercer, Mr. Aldrich refused to implement the restructuring directive, characterizing it in front of two other attendees (Dwayne Prescott, SVP Production Operations, and Lorraine Okafor, SVP HR) as "creatively bankrupt and commercially idiotic."

• October 11, 2022 (a.m.): President Mercer issued a formal written warning to Mr. Aldrich, directing him to comply with the restructuring directive and advising him that failure to do so could result in disciplinary action up to and including termination.

• October 11, 2022 (p.m.): Mr. Aldrich forwarded the email chain containing the restructuring directive and his exchange with Mercer to six of his direct reports, adding the editorial comment: "the London suits are gutting our operation."

• October 14, 2022: AMA terminated Mr. Aldrich's employment.

AMA recognizes a significant procedural vulnerability with this ground. Section 7.2(b)(iv) of the Employment Agreement provides that termination for "persistent refusal to perform duties or follow lawful directives" requires that the employee be given a written notice identifying the deficiency and a period of fifteen (15) business days in which to cure the deficiency before termination may be effectuated on that basis. In this instance, AMA provided only three (3) calendar days — and only one (1) business day — between the issuance of the written warning on October 11 and the termination on October 14. This falls far short of the contractually required cure period.

Moreover, under Section 7.2(b)(v), which addresses "willful misconduct materially injurious to the Company," Mr. Aldrich's single intemperate email to his subordinates may not rise to the level of conduct that was "materially injurious" to AMA, though it was certainly unprofessional and undermined management authority.

Overall Assessment. AMA's position on the for cause termination is primarily defensible on the basis of Ground 1 — the unauthorized transmission of confidential information and trade secrets, which constitutes a clear material breach of the Employment Agreement and AMA's written policies. Ground 2 (insubordination) is procedurally deficient and, standing alone, would likely not sustain the for cause designation.

Taking into account the strengths and weaknesses of both grounds, and considering the likelihood that a factfinder would view the overall record, AMA assesses that there is approximately a 60% probability that a court or jury would uphold the for cause termination. Conversely, there is approximately a 40% probability that the termination would be found to have been without cause, entitling Mr. Aldrich to the contractual severance benefits he claims.

B. AMA's Cross-Claims Are Strong

AMA's affirmative claims against Mr. Aldrich represent a meaningful component of AMA's overall litigation position. They serve both as a basis for potential monetary recovery and, importantly, as a counterbalance to the sympathetic narrative that Mr. Aldrich seeks to present as a wrongfully terminated executive.

CUTSA — Trade Secret Misappropriation (~65% Probability of Success)

AMA's CUTSA claim is the strongest of the cross-claims. The materials transmitted by Mr. Aldrich — show format bibles, the Summit Challenge revenue model, sizzle reels, audience analytics data, and talent deal terms — satisfy the statutory definition of trade secrets under California Civil Code section 3426.1(d). They derive independent economic value from not being generally known to or readily ascertainable by competitors, and AMA took reasonable measures to maintain their secrecy, including: requiring all employees to sign confidentiality agreements; maintaining a restricted-access content management system for proprietary content; watermarking proprietary documents with unique identifiers; and promulgating and enforcing the Acceptable Use and Confidentiality Policy.

Mr. Aldrich's deposition testimony on May 22, 2023 was notably damaging to his position on this issue. When confronted with the email logs documenting the transmissions to Halcyon Creek Productions, Mr. Aldrich offered the explanation that he was exploring a "co-production opportunity" between AMA and Halcyon Creek. This explanation is implausible on its face and is contradicted by the undisputed evidence:

• Mr. Aldrich had no authorization from any AMA executive — including President Mercer, SVP Prescott, or anyone in AMA's Business Affairs department — to explore or negotiate any co-production arrangement with Halcyon Creek or any other entity.

• No co-production agreement, term sheet, draft proposal, or even preliminary email discussion outlining the parameters of any co-production relationship has been produced in discovery.

• At deposition, Mr. Aldrich was unable to identify any specific, legitimate business purpose for the transmissions, beyond the vague assertion that he was "testing the waters" and that "people in this business share ideas all the time."

• Mr. Aldrich himself acknowledged under oath that the materials he transmitted were "proprietary" and that the Summit Challenge revenue model was "confidential financial information" belonging to AMA.

The development costs for the three transmitted show concepts provide a floor for actual damages: "Apex Endurance" (approximately $120,000 in development costs), "The Remix" (approximately $85,000), and "Untamed West" (approximately $95,000), for a total of approximately $300,000. More significantly, the Summit Challenge franchise generates approximately $42 million in annual revenue for AMA. The revenue model transmitted to Halcyon Creek contains detailed information about AMA's cost structures, pricing, and margins that would provide a significant competitive advantage to any entity that possessed it.

If misappropriation is proven to have been "willful and malicious," exemplary damages of up to twice the amount of actual damages are available under California Civil Code section 3426.3. While AMA recognizes that establishing willfulness presents additional evidentiary challenges, the circumstances of the transmissions — targeted delivery of specific, highly sensitive materials to a competitor owned by a personal associate, without any business justification — provide a reasonable basis for such a finding.

Breach of Fiduciary Duty (~55% Probability of Success)

As Senior Vice President and an officer of AMA, Mr. Aldrich owed fiduciary duties of loyalty to the company. The transmission of proprietary information and trade secrets to Halcyon Creek Productions — an entity owned by his former colleague and business associate, Nina Castellanos — without authorization, disclosure, or approval, demonstrates self-dealing and disloyalty. AMA recognizes that Mr. Aldrich will argue he was still employed at the time of the transmissions and was acting within his perceived duties, but this defense is undermined by the absence of any authorization or business justification and by Mr. Aldrich's own deposition testimony.

Breach of Employment Agreement — Section 9.4 (~70% Probability of Success)

This is AMA's strongest cross-claim. The contractual obligation is clear: Section 9.4 prohibits the disclosure or transmission of Confidential Information to any person or entity other than in furtherance of duties to AMA. The documentary evidence — email logs, laptop forensic analysis — is objective, verifiable, and largely undisputed. Mr. Aldrich does not dispute that the transmissions occurred; his only defense is his characterization of the purpose as a "co-production opportunity," which, as discussed above, lacks any corroboration.

Conversion (~50% Probability of Success)

AMA's conversion claim relates to Mr. Aldrich's unauthorized appropriation and transmission of AMA's proprietary digital files. While this claim has independent legal merit, it is somewhat duplicative of the CUTSA claim and has modest independent value. It nevertheless contributes to the overall picture of Mr. Aldrich's misconduct.

C. AMA's Vulnerabilities

AMA acknowledges the following vulnerabilities in its position, which it has weighed in developing its settlement proposal:

1. Cure-Period Deficiency. As discussed above, the fifteen-business-day cure period required by Section 7.2(b)(iv) of the Employment Agreement was not provided with respect to the insubordination ground. AMA provided only three calendar days (one business day) between the written warning and the termination. Mr. Aldrich will highlight this procedural failure as evidence that the termination was hasty and pretextual, driven by the restructuring dispute rather than by any genuine concern about policy violations or contractual breaches. This argument has some surface appeal, even though AMA contends the for cause termination rests primarily on the independent Ground 1 (confidentiality violations), which does not require a cure period.

2. Timeline Issue. The DLP audit findings were initially reported to Gregory Tanaka on September 6, 2022, but AMA did not act on those findings until after the October 10-14 insubordination conflict. AMA's explanation — that the forensic review of Mr. Aldrich's laptop was not completed until October 3, 2022, and that additional time was required for internal consultation with counsel before any adverse employment action could be taken — is factually accurate and reasonable. However, Mr. Aldrich will argue that the five-week delay between the initial findings (September 6) and the termination (October 14), particularly the fact that the termination occurred within days of the insubordination rather than within days of the completed forensic review (October 3), demonstrates that the confidentiality violations were a pretext and that the real motivation was Mr. Aldrich's opposition to the restructuring.

3. Mercer's Deposition Testimony. President Mercer's deposition testimony was less than ideal on the timeline issue. Mr. Mercer acknowledged that he did not personally review the DLP audit findings in detail until October 13, 2022 — three days after the confrontation with Mr. Aldrich over the restructuring directive and one day before the termination. This testimony supports Mr. Aldrich's narrative that the termination decision was driven by the October 10 confrontation and that the DLP findings were invoked only after the fact as a justification.

4. Non-Competition Clause (§ 9.1) Is Void. AMA has conceded, correctly, that Section 9.1 of the Employment Agreement is unenforceable under California Business and Professions Code section 16600. The California Supreme Court's decision in Edwards v. Kraft Quill CPAs LLP (2008) 44 Cal.4th 937 is dispositive. The New York choice-of-law clause in Section 14.3 of the Employment Agreement does not save the non-competition provision, because California's fundamental public policy against restraints on competition overrides under the Restatement (Second) of Conflict of Laws section 187(2), as the Court of Appeal held in Application Group, Inc. v. Hunter Group, Inc. (1998) 61 Cal.App.4th 881. AMA's inclusion of this provision in the Employment Agreement, even if boilerplate, creates an unfavorable optic.

5. Non-Solicitation of Business Relationships (§ 9.3) Is Vulnerable. Section 9.3 is broadly drafted, covering "any network, platform, or advertiser client" with whom Mr. Aldrich had "material contact" during the twenty-four months preceding his termination. Given Mr. Aldrich's senior role and extensive client relationships, this provision effectively prevents him from engaging in business development in the unscripted television industry. A court could well find that a provision of this breadth operates as a de facto non-competition agreement and is void under section 16600, consistent with the reasoning of The Retirement Group v. Galante (2009) 176 Cal.App.4th 1226.

6. AMA's Actual Damages from Cross-Claims Are Difficult to Quantify. While AMA's cross-claims provide substantial leverage value, the company faces a meaningful challenge in quantifying its actual damages. AMA's investigation has not confirmed that Halcyon Creek Productions has produced, sold, or commercially exploited any programming based on the transmitted materials. Without evidence of commercial exploitation, AMA's actual damages may be limited to the development costs for the transmitted show concepts (approximately $300,000), the costs of the investigation and remediation, and potentially a reasonable royalty theory, none of which yield a large damages number.

D. Aldrich's Vulnerabilities

Mr. Aldrich's litigation position has its own significant weaknesses, which AMA expects the mediator to weigh in evaluating the reasonableness of a settlement:

1. Deposition Performance. Mr. Aldrich was a poor witness at his May 22 deposition, particularly on the critical issue of the Halcyon Creek transmissions. His "co-production opportunity" explanation was vague, inconsistent, and wholly uncorroborated by any contemporaneous documentation. He appeared evasive when pressed on the specifics of the alleged co-production arrangement and was unable to identify any AMA executive who had authorized him to explore such a relationship. A jury viewing this testimony would likely find it unconvincing.

2. Key Admissions. Mr. Aldrich acknowledged under oath that the materials he transmitted were "proprietary" and that the Summit Challenge revenue model was "confidential financial information." He also acknowledged that he did not seek or obtain authorization from any AMA executive before transmitting the materials to Halcyon Creek. These admissions undermine his position on both AMA's cross-claims and the for cause issue.

3. Signed Policy Acknowledgment. Mr. Aldrich cannot credibly claim ignorance of AMA's Acceptable Use and Confidentiality Policy. He signed and acknowledged the policy on April 12, 2021, approximately eighteen months before the bulk of the transmissions occurred. The policy is clear, unambiguous, and specifically addresses the unauthorized transmission of proprietary materials to personal email accounts or to third parties.

4. Wrongful Termination Claim Is Weak. Mr. Aldrich's Tameny claim requires him to establish that his termination violated a fundamental public policy of the State of California. He characterizes the Mercer restructuring directive as an effort to misclassify employees — converting full-time positions to independent contractor relationships — and contends that his opposition to this misclassification constituted protected activity. However, Mr. Aldrich has produced no evidence, beyond his own characterization, that the restructuring directive would actually have resulted in misclassification. The directive itself — which proposed restructuring certain production teams — is ambiguous on its face and does not explicitly direct or contemplate misclassification. This claim is speculative and lacks evidentiary support.

5. Emotional Distress Claim. To the extent Mr. Aldrich seeks emotional distress damages, he has no evidence of physical injury, and his supporting evidence of emotional suffering is limited. Any recovery on this component would be modest at best.

VI. DAMAGES ANALYSIS

A. Aldrich's Claims — AMA's Exposure

The following table compares Mr. Aldrich's initial demand with AMA's risk-adjusted assessment of exposure on each component of his claimed damages:

Note Regarding RSU Valuation: At the time of Mr. Aldrich's termination in October 2022, his 15,300 unvested RSUs were valued at approximately $332,200, based on the then-current AGMG share price of approximately £18.79 per share, converted at the October 2022 exchange rate of approximately $1.155 per pound sterling, yielding an approximate per-share value of $21.71. As of late November 2023, the AGMG share price has risen to approximately £19.50 per share, and the exchange rate has shifted to approximately $1.24 per pound sterling, yielding an updated per-share value of approximately $24.18. At the current valuation:

• Full acceleration of all 15,300 unvested RSUs would yield approximately $369,954 (15,300 × $24.18).

• Partial acceleration of 10,200 RSUs (AMA's revised proposal) would yield approximately $246,636 (10,200 × $24.18).

B. AMA's Cross-Claims — Recovery Value

AMA's cross-claims serve primarily a strategic and leverage function in the context of settlement, rather than providing a basis for significant quantifiable monetary recovery. AMA's candid assessment is as follows:

Actual Damages. AMA's actual damages from Mr. Aldrich's unauthorized transmissions are difficult to prove in the absence of evidence that Halcyon Creek Productions has produced, sold, or commercially exploited any programming based on the transmitted materials. AMA's investigation to date has not confirmed any commercial exploitation. The development costs for the three transmitted show concepts — approximately $300,000 in total — provide a floor for actual damages, but this figure is relatively modest in the context of the overall dispute.

Injunctive Relief. The return or certified deletion of all AMA proprietary materials in Mr. Aldrich's possession, custody, or control — including all materials on his personal email accounts, cloud storage, personal devices, and any copies provided to Halcyon Creek Productions — is achievable through settlement and has significant practical value to AMA. Securing this relief through settlement is more efficient and certain than seeking it through litigation.

Exemplary Damages. If AMA were to prove at trial that the misappropriation was "willful and malicious," exemplary damages of up to twice the actual damages would be available under CUTSA section 3426.3. However, the assessment of such damages is speculative at the mediation stage and depends on factual findings that AMA cannot guarantee.

Narrative Value. Perhaps the most important function of AMA's cross-claims is the reframing of the case narrative. Mr. Aldrich's litigation posture depends on presenting himself as a loyal, high-performing executive who was wrongfully terminated for standing up to management. AMA's cross-claims introduce a powerful counter-narrative: that Mr. Aldrich was an unfaithful officer who, while still employed, systematically transmitted proprietary materials and trade secrets to a competitor owned by his personal associate, without authorization or business justification. This counter-narrative materially reduces the "jury appeal" of Mr. Aldrich's claims and significantly increases his settlement risk.

C. Cost of Continued Litigation

Both parties face substantial costs if this matter proceeds to trial:

AMA's Estimated Additional Costs. If the case does not settle and proceeds through trial preparation and trial, AMA estimates its additional defense costs at approximately $200,000 to $350,000, encompassing continued attorney fees, expert costs (if retained), trial preparation, and trial time. These costs are in addition to the approximately $425,000 already expended in defense of this matter through the date of this brief.

Aldrich's Estimated Costs. Mr. Aldrich's counsel, Whitfield & Associates, is a Beverly Hills boutique firm. While AMA does not have precise information regarding Mr. Aldrich's legal costs, the billing rates and time commitments associated with additional discovery motions, trial preparation, and trial time would be substantial.

Combined Cost Analysis. The combined litigation costs that both parties would incur to take this matter to trial likely exceed the current gap between the parties' settlement positions. This economic reality should motivate both sides to negotiate in good faith toward resolution.

Trial Timeline. The earliest realistic trial date, given the current Superior Court calendar, is likely in the third or fourth quarter of 2024, creating nine to twelve months of additional uncertainty, management distraction, and litigation expense for both sides. For AMA, this period would require the continued involvement of senior executives — including President Mercer, SVP Okafor, VP Tanaka, and SVP Prescott — in trial preparation, including trial testimony preparation, document review, and consultations with counsel.

VII. INSURANCE — SELF-FUNDED MATTER

AMA's employment practices liability insurance carrier, Pemberton Mutual Assurance Co. (Policy No. PMA-EPL-2022-00837), denied coverage for the Aldrich dispute in a Reservation of Rights letter dated December 22, 2022. Pemberton identified three principal grounds for the coverage denial:

(1) The Insured v. Insured Exclusion set forth in Section IV.C of the Policy, on the basis that AMA's cross-claims against Mr. Aldrich constitute "offensive litigation by the insured," which triggers the exclusion and renders the entire dispute outside the scope of coverage;

(2) Mr. Aldrich's claims are individual in nature, not part of a "pattern or practice" claim, and therefore do not satisfy certain threshold requirements of the Policy;

(3) Mr. Aldrich's restrictive covenant and trade secret claims relate to the company's proprietary business interests and do not fall within the definition of "Employment Practices" as set forth in the Policy.

AMA disagrees with Pemberton's coverage analysis on several of these grounds, but has determined that the cost and distraction of pursuing coverage litigation against Pemberton at this time would not be productive, particularly given AMA's desire to resolve the Aldrich matter promptly. Accordingly, the defense of the Aldrich case and any settlement payment will be entirely self-funded by AMA.

AMA's directors and officers liability insurance carrier, Redcliffe Specialty Insurance Ltd. (Policy No. RSI-DO-2022-04419), was noticed on a precautionary basis. However, no individual AMA officers have been named as defendants in the Aldrich action, and the D&O policy has not been triggered. AMA does not anticipate that the D&O policy will become relevant to the resolution of this matter.

VIII. MEDIATION HISTORY AND CURRENT POSTURE

A. September 8, 2023 — Combined Mediation Session

The Aldrich dispute was addressed during the combined class action/individual mediation session held on September 8, 2023, before the Honorable Patricia Okoro (Ret.). That session was the second formal mediation of the Aldrich claims, the first having been an informal pre-litigation demand exchange that did not involve a neutral.

During the September session, the Aldrich matter was addressed in the afternoon, following the productive morning session that resulted in the settlement of the Fuentes class action. The negotiation of the Aldrich matter proceeded as follows:

• Opening positions: Mr. Aldrich opened at $3.8 million in cash, plus full acceleration of all 15,300 unvested RSUs. AMA opened at $1.75 million in cash, plus acceleration of 8,000 RSUs.

• Subsequent movement: Over the course of approximately three hours of shuttle diplomacy, Mr. Aldrich moved to $3.2 million plus full RSU acceleration, and AMA moved to $2.0 million plus acceleration of 8,000 RSUs.

• Gap at close: The cash gap at the close of the session was $1.2 million ($3.2 million vs. $2.0 million). The RSU gap remained at full acceleration (15,300) vs. partial acceleration (8,000).

In addition to the cash and RSU gaps, the parties identified three key non-monetary sticking points that contributed to the impasse:

1. RSU Treatment: Mr. Aldrich insisted on full acceleration of all 15,300 unvested RSUs, arguing that the for cause termination was wrongful and that he would have vested fully had his employment continued. AMA offered acceleration of 8,000 RSUs, representing a compromise between full acceleration and total forfeiture, reflecting the genuine uncertainty regarding the for cause determination.

2. Restrictive Covenant Release: Mr. Aldrich demanded a complete release of all post-employment restrictive covenant obligations, including his confidentiality obligations under Section 9.4. AMA was and remains unwilling to release Mr. Aldrich from his confidentiality obligations, particularly given that the core of the dispute involves his unauthorized disclosure of precisely the types of information that Section 9.4 is designed to protect. AMA's position on this point has not changed and will not change: retention of Section 9.4, in full force and for an indefinite term, is a non-negotiable condition of any settlement.

3. Non-Disparagement Duration: Mr. Aldrich sought a non-disparagement clause of unlimited duration. AMA proposed a three-year term, which AMA believes is reasonable and consistent with market practice for executive separations in the entertainment industry.

B. Developments Since September

Several developments since the September mediation session have improved the prospects for resolution:

Resolution of Class Action. The Fuentes class action settlement has proceeded through preliminary approval (October 18, 2023) and class notice (November 3, 2023) without material obstacles. The opt-out rate is low (23 opt-outs, representing approximately 1.24% of the class), and the four objections received have all been non-substantive. The final approval hearing is scheduled for February 2, 2024. With the class action on a clear and favorable trajectory, AMA can now devote its full attention and resources to resolving the Aldrich matter.

Reassessment Period. Both parties have had approximately three months to step back, reassess their positions, and reconsider the risks and costs of continued litigation. AMA has used this period to refine its damages analysis, reconsider its RSU offer, and develop revised positions on the non-monetary terms. AMA's hope and expectation is that Mr. Aldrich's counsel has undertaken a similarly candid reassessment.

Revised RSU Offer. AMA has increased its RSU acceleration offer from 8,000 units to 10,200 units, representing approximately two-thirds of Mr. Aldrich's unvested equity. This reflects AMA's recognition that a compromise on this issue — rather than adherence to an all-or-nothing position on either side — is necessary to bridge the gap.

Motivation to Resolve. Both parties have strong reasons to resolve this matter now. AMA seeks a clean resolution of all pending employment litigation, in conjunction with the near-final class settlement, to present a unified and stabilized posture to its parent company, its Board, and the market. Mr. Aldrich, for his part, should want certainty and the freedom to move forward in his career without the overhang of active litigation and unresolved restrictive covenant obligations.

IX. PROPOSED RESOLUTION

AMA proposes a comprehensive, global settlement of all claims and cross-claims on the following terms. AMA presents these terms not as a final, take-it-or-leave-it offer, but as a framework for productive negotiation at the December 8 session.

A. Monetary Terms

Total Lump Sum Payment to Aldrich: AMA proposes a total cash payment to Mr. Aldrich in the range of $2,000,000 to $2,500,000, inclusive of all claimed damages, severance, bonus, expense reimbursement, emotional distress, and any other component of Mr. Aldrich's claims. This payment would be made within twenty-one (21) calendar days of the mutual execution of a final Settlement Agreement and General Release.

Tax Allocation: The parties would negotiate a mutually acceptable allocation of the settlement payment between wages/compensation (subject to W-2 reporting, income tax withholding, and payroll taxes) and non-wage damages (subject to 1099 reporting). AMA proposes an approximate allocation of 50% wages / 50% non-wage damages, reflecting the mixed nature of Mr. Aldrich's claims. Mr. Aldrich may propose a different allocation, and AMA is willing to discuss a reasonable allocation that both parties will report consistently for federal and state tax purposes. Neither party would be required to indemnify the other for the tax consequences of the settlement, though both parties would agree to cooperate in the event of an audit.

B. RSU Acceleration

AMA proposes acceleration of 10,200 RSUs of the 15,300 unvested restricted stock units remaining in Mr. Aldrich's equity compensation grant at the time of his termination. This figure represents approximately two-thirds of Mr. Aldrich's unvested equity and reflects a meaningful increase from AMA's prior offer of 8,000 units at the September session.

The remaining 5,100 RSUs would be forfeited, representing Mr. Aldrich's concession in exchange for the cash payment, the RSU acceleration, and the other favorable terms of the settlement.

At the current AGMG share price of approximately £19.50 per share (approximately $24.18 per share at current exchange rates), the estimated value of the 10,200 accelerated RSUs is approximately $246,636.

Vesting of the accelerated RSUs would occur upon the mutual execution of the Settlement Agreement or, at AMA's election, upon the filing of the Joint Stipulation for Dismissal with Prejudice — the specific trigger to be negotiated between the parties. AMA's parent company, AGMG, and its equity compensation team (contact: Malcolm Dunmore, Chief Financial Officer, AGMG) would process the acceleration in accordance with the terms of the AGMG RSU Plan. AMA would coordinate with Mr. Aldrich's counsel and any financial advisor designated by Mr. Aldrich to ensure timely and orderly vesting and settlement of the accelerated units.

C. Restrictive Covenant Modifications

AMA proposes the following modifications to the post-employment restrictive covenants set forth in Sections 9.1 through 9.4 of the Employment Agreement:

AMA's concession on Section 9.1 is substantial. While AMA recognizes that Section 9.1 is unenforceable under California law and has not sought to enforce it, the formal voiding of the provision in the Settlement Agreement gives Mr. Aldrich complete certainty and removes any cloud over his ability to compete immediately. This is a meaningful benefit, as it eliminates any risk, however theoretical, that AMA or AGMG could seek to enforce the non-competition provision in another jurisdiction.

The reduction of Sections 9.2 and 9.3 from twenty-four months to twelve months is a meaningful concession that balances AMA's legitimate interest in protecting its workforce and client relationships against Mr. Aldrich's right to career mobility. A twelve-month period is well within market norms for executive separations in the entertainment industry and provides AMA with protection during the most commercially sensitive period immediately following Mr. Aldrich's departure.

The retention of Section 9.4 is essential to AMA and is non-negotiable. The confidentiality provision protects AMA's trade secrets and proprietary information — the very information that Mr. Aldrich misappropriated and transmitted to a competitor. It would be antithetical to the purpose of this settlement for AMA to release Mr. Aldrich from the very obligations he breached.

D. Mutual General Release

Both parties would execute a comprehensive mutual general release of all claims and cross-claims arising out of, relating to, or in any way connected with Mr. Aldrich's employment with AMA, the termination of that employment, and the events underlying the claims and cross-claims asserted in Case No. 22STCV41087.

The mutual release would include an express waiver of the protections of California Civil Code section 1542, which provides:

"A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party."

Both parties would knowingly and voluntarily waive this provision, acknowledging that the release is intended to encompass all claims, whether known or unknown, that relate to or arise from Mr. Aldrich's employment and its termination.

The release would cover all claims asserted in Case No. 22STCV41087, including all five causes of action in Mr. Aldrich's Complaint and all four causes of action in AMA's First Amended Cross-Complaint. The release would extend to the parties' respective successors, assigns, officers, directors, employees, agents, and legal representatives.

E. Return/Deletion of AMA Materials

Mr. Aldrich would be required to return to AMA, or certify the permanent deletion of, all AMA proprietary materials in his possession, custody, or control within ten (10) business days of the execution of the Settlement Agreement. This obligation includes, without limitation:

• All materials stored on or transmitted through Mr. Aldrich's personal email accounts, including galdrich.private@Northgate Software.com and any other personal email accounts;

• All materials stored in personal cloud storage accounts, including Larkspur Technologies, Hollowell Health IT, Meridian Systems, and any other cloud-based storage;

• All materials stored on personal devices, including laptops, desktop computers, tablets, smartphones, and external hard drives or USB drives;

• All copies of any AMA proprietary materials that Mr. Aldrich provided to any third party, including but not limited to Halcyon Creek Productions LLC and its principal, Nina Castellanos;

• All physical copies, if any, of AMA proprietary documents.

Mr. Aldrich would be required to provide AMA with a written certification of compliance, signed under penalty of perjury, confirming that he has returned or permanently deleted all such materials and that he has not retained any copies in any form.

F. Neutral Reference Agreement

AMA would agree to provide a neutral reference for Mr. Aldrich, limited to confirming the following:

• Dates of employment: September 5, 2017 through October 14, 2022

• Title: Senior Vice President of Original Content & Executive Producer

• Eligibility for rehire: Neutral

CALDERWOOD & HARKNESS LLP 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200
CONFIDENTIAL — FOR MEDIATION ONLY SUBJECT TO CALIFORNIA EVIDENCE CODE § 1119 NOT ADMISSIBLE IN ANY PROCEEDING
MEDIATION BRIEF OF DEFENDANT AND CROSS-COMPLAINANT AURELIUS MEDIA AMERICAS INC.
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I. INTRODUCTION
Aurelius Media Americas Inc. ("AMA"), a wholly owned United States subsidiary of Aurelius Global Media Group PLC ("AGMG"), respectfully submits this confidential mediation brief in advance of the standalone mediation session scheduled for December 8, 2023, before the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc. This brief is submitted solely for use in the mediation and is protected in its entirety by the confidentiality provisions of California Evidence Code section 1119 and the parties' Mediation Agreement. Nothing contained herein shall be construed as an admission of liability, an acknowledgment of the merits or lack of merits of any claim or defense, or a waiver of any right or privilege.
AMA approaches this mediation in good faith, with a genuine commitment to achieving a fair and efficient resolution of the remaining individual employment dispute with its former Senior Vice President of Original Content & Executive Producer, Gavin Aldrich. AMA's leadership and its Board have authorized counsel to engage substantively and with appropriate flexibility, consistent with the company's strong preference for bringing this matter to a definitive close.
The present mediation occurs at a particularly opportune moment for resolution. Since the last combined mediation session on September 8, 2023, AMA has made substantial progress toward resolving the companion class action, Fuentes v. Aurelius Media Americas Inc., Case No. 22STCV38214, through a $14,750,000 court-approved class settlement. The Preliminary Approval Order was entered by the Honorable Catherine Villanueva on October 18, 2023, class notice was mailed to all members of the settlement class on November 3, 2023, and the final approval hearing is calendared for February 2, 2024. The class settlement has proceeded without material obstacles — only 23 class members have opted out, representing approximately 1.24% of the class, and the four objections received have all been non-substantive. With the class action on a clear trajectory toward final approval, AMA now turns its full attention to resolving the Aldrich matter efficiently and comprehensively.
AMA and Mr. Aldrich previously participated in a combined mediation session on September 8, 2023, also before Hon. Okoro, which addressed both the Fuentes class action and the Aldrich dispute. That session yielded a productive resolution of the class claims but did not result in a settlement of the Aldrich matter. At the close of that session, the gap between the parties stood at approximately $1.2 million on the cash component — Mr. Aldrich's last position was $3.2 million and AMA's was $2.0 million — and the parties remained apart on several important non-monetary terms, including: (1) the treatment of Mr. Aldrich's unvested restricted stock units ("RSUs"), where Mr. Aldrich demanded full acceleration of all 15,300 unvested units while AMA offered acceleration of 8,000 units; (2) the scope of any restrictive covenant release, where Mr. Aldrich sought a release of all post-employment obligations including his confidentiality obligations under Section 9.4 of his Employment Agreement, which AMA was and remains unwilling to concede; and (3) the duration of a mutual non-disparagement provision, where Mr. Aldrich sought an unlimited term and AMA proposed a three-year period.
In the three months since the September session, both sides have had time to reflect on their respective positions, assess the risks inherent in continued litigation, and recalibrate expectations. The resolution of the class action has removed a significant source of distraction and complexity for both the company and the Court, and has allowed AMA to devote its analytical and financial resources to a thorough reassessment of the Aldrich matter in isolation. AMA has refined its damages analysis, revisited its assessment of litigation risk on both its affirmative and defensive claims, and developed a revised settlement proposal that it believes provides a reasonable and defensible basis for resolution.
As set forth in detail below, AMA proposes a comprehensive settlement in the range of $2.0 million to $2.5 million in cash, together with acceleration of 10,200 of Mr. Aldrich's 15,300 unvested RSUs and significant concessions on the restrictive covenant provisions, in exchange for a mutual general release, the return or certified deletion of all AMA proprietary materials in Mr. Aldrich's possession, a neutral reference, and a mutual non-disparagement provision. AMA believes this proposal is fair, accounts for the meaningful litigation risk on both sides of the case, and represents a basis upon which the parties can negotiate a final resolution with the assistance of Hon. Okoro.
II. BACKGROUND — PARTIES AND RELATIONSHIPS
A. Aurelius Media Americas Inc.
Aurelius Media Americas Inc. is a Delaware corporation (Delaware File No. 5284731) qualified to do business in the State of California, with its principal office located at 8500 Sunset Boulevard, Suite 1400, West Hollywood, California 90069. AMA is a wholly owned subsidiary of Aurelius Global Media Group PLC, a public limited company organized under the laws of England and Wales (Companies House No. 08412667), whose ordinary shares are listed on the London Stock Exchange under the ticker symbol "AGMG."
AMA is a leading entertainment company in the United States, with primary operations in the development, production, and distribution of unscripted and reality television programming, digital content, and branded entertainment. The company maintains a workforce of approximately 3,200 employees in the United States, of whom approximately 2,400 are based in California. For the fiscal year ended December 31, 2022, AMA reported United States revenues of approximately $687.4 million. AMA's programming is distributed across major broadcast and cable networks as well as digital streaming platforms in the United States and internationally.
The relevant members of AMA's senior management team for purposes of this dispute include: Jonathan Mercer, President; Lorraine Okafor, Senior Vice President of Human Resources; and Gregory Tanaka, Vice President of Legal & Compliance.
B. Gavin Aldrich
Gavin Aldrich is a veteran entertainment executive who served as AMA's Senior Vice President of Original Content & Executive Producer from September 5, 2017 through October 14, 2022. Mr. Aldrich's employment was governed by an Employment Agreement dated September 5, 2017, as amended by a First Amendment dated August 1, 2020 (collectively, the "Employment Agreement"). At the time of his termination, Mr. Aldrich's compensation included a base salary of $485,000 per annum. His last annual bonus, for fiscal year 2021, was $225,000. In connection with his employment, Mr. Aldrich was also granted 42,500 restricted stock units in AGMG under the parent company's equity compensation plan. Of those RSUs, 15,300 remained unvested at the time of his termination on October 14, 2022, and were forfeited pursuant to the terms of the for cause termination.
Mr. Aldrich resides at 1140 Tower Road, Beverly Hills, California 90210. He is represented in this action by Cameron Whitfield (Principal) and Julia Nazarian (Associate) of Whitfield & Associates, located at 9465 Wilshire Boulevard, Suite 320, Beverly Hills, California 90212.
C. Defense Counsel
AMA is represented in this matter by Calderwood & Harkness LLP. Renata Vasquez, Partner (State Bar No. 224578), serves as the responsible attorney, and Devon Archer, Senior Associate (State Bar No. 301462), serves as lead associate. Calderwood & Harkness's offices are located at 777 South Flower Street, Suite 4200, Los Angeles, California 90017.
III. PROCEDURAL HISTORY
The procedural history of this matter reflects a case that has matured through the discovery phase and is now ripe for resolution. The principal events are as follows:
October 14, 2022: AMA terminated Mr. Aldrich's employment for cause, pursuant to Section 7.2(b) of the Employment Agreement, based on unauthorized transmission of confidential information and proprietary materials to third parties and insubordination.
October 28, 2022: Mr. Aldrich's counsel, Cameron Whitfield of Whitfield & Associates, transmitted a pre-litigation demand letter to AMA asserting claims for wrongful termination, breach of contract, and related causes of action, and demanding $4.15 million in total compensation.
December 9, 2022: Mr. Aldrich filed his Complaint in the Superior Court of the State of California, County of Los Angeles, commencing this action under Case No. 22STCV41087. The matter was assigned to the Honorable Catherine Villanueva in Department 52. The Complaint asserts five causes of action: (1) wrongful termination in violation of public policy; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) declaratory relief regarding the enforceability of post-employment restrictive covenants; and (5) violation of California Labor Code section 2802 (failure to reimburse business expenses).
January 20, 2023: AMA filed its Answer to the Complaint, denying the material allegations and asserting affirmative defenses including just cause, unclean hands, and failure to mitigate damages. Concurrently, AMA filed a Cross-Complaint against Mr. Aldrich asserting four causes of action: (1) breach of the Employment Agreement (Sections 9.2, 9.3, and 9.4); (2) misappropriation of trade secrets under the California Uniform Trade Secrets Act ("CUTSA"), California Civil Code section 3426 et seq.; (3) breach of fiduciary duty; and (4) conversion.
March 22, 2023: The Court granted in part Mr. Aldrich's Motion to Strike portions of the Cross-Complaint, finding that the caption of AMA's First Cause of Action improperly referenced Section 9.1 (the non-competition clause), which is unenforceable under California Business and Professions Code section 16600. The Court ordered AMA to amend the Cross-Complaint to clarify that AMA was not seeking to enforce the non-competition provision.
April 5, 2023: AMA filed its First Amended Cross-Complaint, removing the reference to Section 9.1 from the First Cause of Action caption and clarifying that AMA does not seek to enforce the non-competition clause. The amended pleading continues to assert breach of Sections 9.2, 9.3, and 9.4.
April 14, 2023: AMA filed a Motion to Compel Further Responses from Mr. Aldrich with respect to Requests for Production Nos. 8 and 11 through 14, which sought communications between Mr. Aldrich and Halcyon Creek Productions LLC, including but not limited to emails, text messages, and any draft agreements or proposals relating to the transmitted proprietary materials. That motion remains pending as of the date of this brief, though the parties have engaged in informal conferral regarding the outstanding discovery.
May 22, 2023: Mr. Aldrich's deposition was taken at Calderwood & Harkness's offices, extending through the full seven hours permitted under Code of Civil Procedure section 2025.290. As discussed in greater detail below, Mr. Aldrich's testimony on the Halcyon Creek transmissions was notably unfavorable to his position.
September 8, 2023: The parties participated in a combined mediation session before Hon. Okoro, which addressed both the Fuentes class action and the Aldrich individual dispute. The class action settled; the Aldrich matter did not, with the parties' respective final positions as described in the Introduction.
Discovery in this matter is substantially complete. The case is ripe for resolution, and both parties would benefit from avoiding the substantial costs and uncertainty of trial.
IV. SUMMARY OF CLAIMS AND CROSS-CLAIMS
A. Aldrich's Claims Against AMA
Mr. Aldrich's Complaint asserts five causes of action against AMA, which are summarized as follows:
1. Wrongful Termination in Violation of Public Policy (First Cause of Action)
Mr. Aldrich alleges that his termination was retaliatory, motivated not by the ostensible grounds stated in his termination letter, but by his objections to a directive issued by AMA President Jonathan Mercer in early October 2022 relating to a proposed restructuring of certain production teams. Mr. Aldrich characterizes the Mercer directive as an effort to misclassify employees — converting full-time, benefits-eligible positions to independent contractor relationships in order to reduce labor costs — and contends that his termination for opposing such misclassification constitutes a violation of public policy under the Tameny v. Tarrant Holdings (1980) 27 Cal.3d 167 doctrine. Mr. Aldrich asserts that his objection to the restructuring constituted protected activity and that the purported for cause grounds were pretextual.
2. Breach of Contract (Second Cause of Action)
Mr. Aldrich contests the designation of his termination as "for cause" under Section 7.2(b) of the Employment Agreement. He contends that the factual circumstances underlying the termination do not satisfy any of the enumerated grounds for cause under the Agreement, and that the termination was, in substance, a without cause termination, entitling him to the full severance package specified in Section 7.3 of the Employment Agreement. The claimed severance components include:
• Severance payment of $970,000, representing twenty-four (24) months of base salary at $485,000 per annum;
• Pro-rata annual bonus for fiscal year 2022, calculated at $168,750 ($225,000 × 9.5/12 months);
• Accelerated vesting of all 15,300 unvested AGMG restricted stock units, valued at approximately $332,200 based on the October 2022 share price of approximately £18.79 per share (converted at $1.155 per pound sterling, yielding approximately $21.71 per share);
• Continuation of employer-subsidized COBRA health insurance coverage for eighteen (18) months, estimated at approximately $50,400 (18 months × approximately $2,800 per month).
3. Breach of Implied Covenant of Good Faith and Fair Dealing (Third Cause of Action)
Mr. Aldrich alleges that AMA acted in bad faith by manufacturing the for cause designation in order to avoid paying the severance benefits to which he was contractually entitled and to trigger the forfeiture of his unvested RSUs under the equity compensation plan. He contends that AMA's true motivation for the termination was the restructuring dispute, and that the confidentiality-violation grounds were identified and invoked only after the decision to terminate had already been made on improper grounds, rendering the for cause designation pretextual and in bad faith.
4. Declaratory Relief — Restrictive Covenants (Fourth Cause of Action)
Mr. Aldrich seeks a judicial declaration that three of the four post-employment restrictive covenants in his Employment Agreement are void or unenforceable under California law. Specifically, he contends:
(a) That Section 9.1 — an eighteen-month post-termination non-competition clause prohibiting Mr. Aldrich from working for any "Competing Enterprise" (defined as any entity deriving 25% or more of its revenue from unscripted or reality television programming in North America) — is void under California Business and Professions Code section 16600, which provides that "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." This position is well-supported by Edwards v. Kraft Quill CPAs LLP (2008) 44 Cal.4th 937, in which the California Supreme Court held that section 16600 prohibits non-competition agreements, subject only to narrow statutory exceptions not applicable here.
(b) That Section 9.2 — a twenty-four-month post-termination employee non-solicitation clause — and Section 9.3 — a twenty-four-month post-termination business non-solicitation clause prohibiting Mr. Aldrich from soliciting "any network, platform, or advertiser client" with whom he had "material contact" during the twenty-four months preceding his termination — are void or unenforceable as de facto non-competition agreements under section 16600 and the principles articulated in The Retirement Group v. Galante (2009) 176 Cal.App.4th 1226.
(c) That the New York choice-of-law provision in Section 14.3 of the Employment Agreement does not override California's fundamental public policy against non-competition agreements, under the analysis set forth in the Restatement (Second) of Conflict of Laws section 187(2) and Application Group, Inc. v. Hunter Group, Inc. (1998) 61 Cal.App.4th 881.
5. Violation of California Labor Code Section 2802 (Fifth Cause of Action)
Mr. Aldrich alleges that AMA failed to reimburse him for approximately $28,400 in business expenses incurred during fiscal year 2022, including travel expenses, client entertainment costs, and cell phone charges, all of which Mr. Aldrich contends were necessary expenditures incurred in the direct discharge of his duties as SVP of Original Content. Section 2802 requires an employer to indemnify its employees for all necessary expenditures or losses incurred in direct consequence of the discharge of their duties.
B. AMA's Cross-Claims Against Aldrich
AMA's First Amended Cross-Complaint asserts four causes of action against Mr. Aldrich, arising out of his unauthorized transmission of AMA proprietary materials to his personal email account and to a third-party competitor during his employment:
1. Breach of Employment Agreement — Sections 9.2, 9.3, and 9.4 (First Cause of Action)
AMA alleges that Mr. Aldrich breached his contractual confidentiality obligations under Section 9.4 of the Employment Agreement by engaging in the unauthorized transmission of approximately 340 emails containing proprietary information from his AMA-issued corporate email account to his personal email account (galdrich.private@Northgate Software.com) over a period of approximately fourteen months, from July 2021 through September 2022. More significantly, AMA alleges that Mr. Aldrich transmitted, via seven separate emails, three complete show format bibles — for the programs tentatively titled "Apex Endurance," "The Remix," and "Untamed West" — two pilot sizzle reels, and the detailed revenue model for AMA's "Summit Challenge" franchise to Halcyon Creek Productions LLC, a California limited liability company formed on February 14, 2022 by Nina Castellanos, a former AMA development executive. The transmissions were sent to the email address info@halcyoncreekprod.com.
Section 9.4 of the Employment Agreement provides, in pertinent part, that Mr. Aldrich shall not, during or after his employment, directly or indirectly disclose, publish, or otherwise transmit any Confidential Information (as defined therein) to any person or entity other than in furtherance of his duties to AMA. AMA contends that the transmissions to Mr. Aldrich's personal email account and to Halcyon Creek Productions were wholly unauthorized, served no legitimate business purpose, and constituted a material breach of Section 9.4 and of the Employment Agreement as a whole.
2. Misappropriation of Trade Secrets — CUTSA (Second Cause of Action)
AMA alleges that the materials transmitted by Mr. Aldrich — including the show format bibles, the Summit Challenge revenue model, audience analytics data, and talent deal terms — constitute "trade secrets" within the meaning of California Civil Code section 3426.1(d). These materials derive independent economic value from not being generally known to the public or to competitors and from not being readily ascertainable by proper means. AMA maintained reasonable measures to protect their secrecy, including confidentiality agreements with all employees and contractors, access-restricted content management systems, digital watermarking of proprietary documents, and the Acceptable Use and Confidentiality Policy that Mr. Aldrich acknowledged and signed on April 12, 2021.
Mr. Aldrich's acquisition and transmission of these materials to Halcyon Creek Productions — an entity owned by his former business associate and itself a potential competitor in the unscripted television space — constitutes misappropriation under CUTSA, whether characterized as acquisition by improper means, disclosure of information acquired under circumstances giving rise to a duty to maintain secrecy, or use (or intended use) of trade secret information without consent.
AMA notes that the Summit Challenge franchise is one of the company's most commercially significant properties, generating approximately $42 million in annual revenue. The revenue model transmitted to Halcyon Creek contains granular, competitively sensitive information including detailed per-episode production costs, network license fee structures, international distribution revenue allocations, advertising CPM rates, and talent compensation structures. The disclosure of this information to a competitor could cause substantial economic harm to AMA.
3. Breach of Fiduciary Duty (Third Cause of Action)
As Senior Vice President and an officer of AMA, Mr. Aldrich owed fiduciary duties of loyalty and care to the company. AMA alleges that Mr. Aldrich's unauthorized disclosure of proprietary information and trade secrets to Halcyon Creek Productions — an entity owned by his former business associate, Nina Castellanos — constitutes a breach of Mr. Aldrich's fiduciary duty of loyalty. The transmissions served Mr. Aldrich's personal interests (and potentially Ms. Castellanos's interests) to the detriment of AMA, and were undertaken without authorization, disclosure, or approval from any superior officer or from AMA's Board.
4. Conversion (Fourth Cause of Action)
AMA alleges that Mr. Aldrich's unauthorized appropriation and transmission of AMA's proprietary digital files — including show format bibles, sizzle reels, and the Summit Challenge revenue model — constitutes conversion. Mr. Aldrich exercised dominion and control over AMA's property in a manner inconsistent with AMA's ownership rights, by forwarding these materials to his personal email account and transmitting them to a third party without authorization.
V. AMA'S POSITION ON THE MERITS
This section sets forth AMA's candid assessment of the strengths and vulnerabilities of both parties' positions. AMA provides this assessment to the mediator in the interest of facilitating a productive and well-informed settlement discussion.
A. The For Cause Termination Is Defensible
AMA terminated Mr. Aldrich's employment for cause under Section 7.2(b) of the Employment Agreement, relying on two independent grounds. AMA's assessment of each ground is set forth below.
Ground 1 — Unauthorized Transmission of Confidential Information (Strong)
The primary basis for the for cause termination was Mr. Aldrich's unauthorized transmission of AMA proprietary information and trade secrets, in violation of Section 9.4 of the Employment Agreement and AMA's Acceptable Use and Confidentiality Policy.
The relevant chronology is as follows: AMA's Information Technology security team initiated a routine data loss prevention ("DLP") audit in August 2022 as part of the company's ongoing cybersecurity program. Preliminary findings from the audit were reported to Vice President of Legal & Compliance Gregory Tanaka on September 6, 2022 — critically, this date is before the October insubordination incident, establishing that the investigation predated the restructuring dispute. A comprehensive forensic review of Mr. Aldrich's AMA-issued laptop was completed on October 3, 2022.
The forensic review revealed the following:
• Approximately 340 emails had been forwarded from Mr. Aldrich's corporate email account to his personal email address (galdrich.private@Northgate Software.com) over a fourteen-month period from approximately July 2021 through September 2022. These emails contained a wide range of AMA proprietary information.
• Seven (7) emails had been transmitted from Mr. Aldrich's corporate email account to info@halcyoncreekprod.com, the email address of Halcyon Creek Productions LLC, a California LLC formed on February 14, 2022 by Nina Castellanos, a former AMA development executive. These seven emails contained, as attachments, three complete show format bibles ("Apex Endurance," "The Remix," and "Untamed West"), two pilot sizzle reels, and the Summit Challenge revenue model.
These findings constitute a clear and material violation of Section 9.4 of the Employment Agreement, which prohibits the disclosure or transmission of Confidential Information to any person or entity other than in furtherance of Mr. Aldrich's duties. They also constitute a violation of AMA's Acceptable Use and Confidentiality Policy, which Mr. Aldrich signed and acknowledged on April 12, 2021.
Under Section 7.2(b) of the Employment Agreement, this conduct satisfies at least two of the enumerated grounds for cause:
• Section 7.2(b)(i) — material breach of the Employment Agreement: The unauthorized transmissions are a clear material breach of Section 9.4. This ground is strong.
• Section 7.2(b)(vi) — material violation of written policies of the Company: The Acceptable Use and Confidentiality Policy is a written policy of AMA, and Mr. Aldrich's violations were material. This ground is strong.
Additionally, the conduct provides a moderate basis for Section 7.2(b)(ii) — misappropriation of Company property or trade secrets.
Ground 2 — Insubordination (Weaker)
The secondary basis for the for cause termination was Mr. Aldrich's insubordination and refusal to comply with a lawful directive from AMA's President, Jonathan Mercer, regarding a proposed restructuring of production teams.
The relevant events occurred in rapid succession:
• October 10, 2022: In a meeting with President Mercer, Mr. Aldrich refused to implement the restructuring directive, characterizing it in front of two other attendees (Dwayne Prescott, SVP Production Operations, and Lorraine Okafor, SVP HR) as "creatively bankrupt and commercially idiotic."
• October 11, 2022 (a.m.): President Mercer issued a formal written warning to Mr. Aldrich, directing him to comply with the restructuring directive and advising him that failure to do so could result in disciplinary action up to and including termination.
• October 11, 2022 (p.m.): Mr. Aldrich forwarded the email chain containing the restructuring directive and his exchange with Mercer to six of his direct reports, adding the editorial comment: "the London suits are gutting our operation."
• October 14, 2022: AMA terminated Mr. Aldrich's employment.
AMA recognizes a significant procedural vulnerability with this ground. Section 7.2(b)(iv) of the Employment Agreement provides that termination for "persistent refusal to perform duties or follow lawful directives" requires that the employee be given a written notice identifying the deficiency and a period of fifteen (15) business days in which to cure the deficiency before termination may be effectuated on that basis. In this instance, AMA provided only three (3) calendar days — and only one (1) business day — between the issuance of the written warning on October 11 and the termination on October 14. This falls far short of the contractually required cure period.
Moreover, under Section 7.2(b)(v), which addresses "willful misconduct materially injurious to the Company," Mr. Aldrich's single intemperate email to his subordinates may not rise to the level of conduct that was "materially injurious" to AMA, though it was certainly unprofessional and undermined management authority.
Overall Assessment. AMA's position on the for cause termination is primarily defensible on the basis of Ground 1 — the unauthorized transmission of confidential information and trade secrets, which constitutes a clear material breach of the Employment Agreement and AMA's written policies. Ground 2 (insubordination) is procedurally deficient and, standing alone, would likely not sustain the for cause designation.
Taking into account the strengths and weaknesses of both grounds, and considering the likelihood that a factfinder would view the overall record, AMA assesses that there is approximately a 60% probability that a court or jury would uphold the for cause termination. Conversely, there is approximately a 40% probability that the termination would be found to have been without cause, entitling Mr. Aldrich to the contractual severance benefits he claims.
B. AMA's Cross-Claims Are Strong
AMA's affirmative claims against Mr. Aldrich represent a meaningful component of AMA's overall litigation position. They serve both as a basis for potential monetary recovery and, importantly, as a counterbalance to the sympathetic narrative that Mr. Aldrich seeks to present as a wrongfully terminated executive.
CUTSA — Trade Secret Misappropriation (~65% Probability of Success)
AMA's CUTSA claim is the strongest of the cross-claims. The materials transmitted by Mr. Aldrich — show format bibles, the Summit Challenge revenue model, sizzle reels, audience analytics data, and talent deal terms — satisfy the statutory definition of trade secrets under California Civil Code section 3426.1(d). They derive independent economic value from not being generally known to or readily ascertainable by competitors, and AMA took reasonable measures to maintain their secrecy, including: requiring all employees to sign confidentiality agreements; maintaining a restricted-access content management system for proprietary content; watermarking proprietary documents with unique identifiers; and promulgating and enforcing the Acceptable Use and Confidentiality Policy.
Mr. Aldrich's deposition testimony on May 22, 2023 was notably damaging to his position on this issue. When confronted with the email logs documenting the transmissions to Halcyon Creek Productions, Mr. Aldrich offered the explanation that he was exploring a "co-production opportunity" between AMA and Halcyon Creek. This explanation is implausible on its face and is contradicted by the undisputed evidence:
• Mr. Aldrich had no authorization from any AMA executive — including President Mercer, SVP Prescott, or anyone in AMA's Business Affairs department — to explore or negotiate any co-production arrangement with Halcyon Creek or any other entity.
• No co-production agreement, term sheet, draft proposal, or even preliminary email discussion outlining the parameters of any co-production relationship has been produced in discovery.
• At deposition, Mr. Aldrich was unable to identify any specific, legitimate business purpose for the transmissions, beyond the vague assertion that he was "testing the waters" and that "people in this business share ideas all the time."
• Mr. Aldrich himself acknowledged under oath that the materials he transmitted were "proprietary" and that the Summit Challenge revenue model was "confidential financial information" belonging to AMA.
The development costs for the three transmitted show concepts provide a floor for actual damages: "Apex Endurance" (approximately $120,000 in development costs), "The Remix" (approximately $85,000), and "Untamed West" (approximately $95,000), for a total of approximately $300,000. More significantly, the Summit Challenge franchise generates approximately $42 million in annual revenue for AMA. The revenue model transmitted to Halcyon Creek contains detailed information about AMA's cost structures, pricing, and margins that would provide a significant competitive advantage to any entity that possessed it.
If misappropriation is proven to have been "willful and malicious," exemplary damages of up to twice the amount of actual damages are available under California Civil Code section 3426.3. While AMA recognizes that establishing willfulness presents additional evidentiary challenges, the circumstances of the transmissions — targeted delivery of specific, highly sensitive materials to a competitor owned by a personal associate, without any business justification — provide a reasonable basis for such a finding.
Breach of Fiduciary Duty (~55% Probability of Success)
As Senior Vice President and an officer of AMA, Mr. Aldrich owed fiduciary duties of loyalty to the company. The transmission of proprietary information and trade secrets to Halcyon Creek Productions — an entity owned by his former colleague and business associate, Nina Castellanos — without authorization, disclosure, or approval, demonstrates self-dealing and disloyalty. AMA recognizes that Mr. Aldrich will argue he was still employed at the time of the transmissions and was acting within his perceived duties, but this defense is undermined by the absence of any authorization or business justification and by Mr. Aldrich's own deposition testimony.
Breach of Employment Agreement — Section 9.4 (~70% Probability of Success)
This is AMA's strongest cross-claim. The contractual obligation is clear: Section 9.4 prohibits the disclosure or transmission of Confidential Information to any person or entity other than in furtherance of duties to AMA. The documentary evidence — email logs, laptop forensic analysis — is objective, verifiable, and largely undisputed. Mr. Aldrich does not dispute that the transmissions occurred; his only defense is his characterization of the purpose as a "co-production opportunity," which, as discussed above, lacks any corroboration.
Conversion (~50% Probability of Success)
AMA's conversion claim relates to Mr. Aldrich's unauthorized appropriation and transmission of AMA's proprietary digital files. While this claim has independent legal merit, it is somewhat duplicative of the CUTSA claim and has modest independent value. It nevertheless contributes to the overall picture of Mr. Aldrich's misconduct.
C. AMA's Vulnerabilities
AMA acknowledges the following vulnerabilities in its position, which it has weighed in developing its settlement proposal:
1. Cure-Period Deficiency. As discussed above, the fifteen-business-day cure period required by Section 7.2(b)(iv) of the Employment Agreement was not provided with respect to the insubordination ground. AMA provided only three calendar days (one business day) between the written warning and the termination. Mr. Aldrich will highlight this procedural failure as evidence that the termination was hasty and pretextual, driven by the restructuring dispute rather than by any genuine concern about policy violations or contractual breaches. This argument has some surface appeal, even though AMA contends the for cause termination rests primarily on the independent Ground 1 (confidentiality violations), which does not require a cure period.
2. Timeline Issue. The DLP audit findings were initially reported to Gregory Tanaka on September 6, 2022, but AMA did not act on those findings until after the October 10-14 insubordination conflict. AMA's explanation — that the forensic review of Mr. Aldrich's laptop was not completed until October 3, 2022, and that additional time was required for internal consultation with counsel before any adverse employment action could be taken — is factually accurate and reasonable. However, Mr. Aldrich will argue that the five-week delay between the initial findings (September 6) and the termination (October 14), particularly the fact that the termination occurred within days of the insubordination rather than within days of the completed forensic review (October 3), demonstrates that the confidentiality violations were a pretext and that the real motivation was Mr. Aldrich's opposition to the restructuring.
3. Mercer's Deposition Testimony. President Mercer's deposition testimony was less than ideal on the timeline issue. Mr. Mercer acknowledged that he did not personally review the DLP audit findings in detail until October 13, 2022 — three days after the confrontation with Mr. Aldrich over the restructuring directive and one day before the termination. This testimony supports Mr. Aldrich's narrative that the termination decision was driven by the October 10 confrontation and that the DLP findings were invoked only after the fact as a justification.
4. Non-Competition Clause (§ 9.1) Is Void. AMA has conceded, correctly, that Section 9.1 of the Employment Agreement is unenforceable under California Business and Professions Code section 16600. The California Supreme Court's decision in Edwards v. Kraft Quill CPAs LLP (2008) 44 Cal.4th 937 is dispositive. The New York choice-of-law clause in Section 14.3 of the Employment Agreement does not save the non-competition provision, because California's fundamental public policy against restraints on competition overrides under the Restatement (Second) of Conflict of Laws section 187(2), as the Court of Appeal held in Application Group, Inc. v. Hunter Group, Inc. (1998) 61 Cal.App.4th 881. AMA's inclusion of this provision in the Employment Agreement, even if boilerplate, creates an unfavorable optic.
5. Non-Solicitation of Business Relationships (§ 9.3) Is Vulnerable. Section 9.3 is broadly drafted, covering "any network, platform, or advertiser client" with whom Mr. Aldrich had "material contact" during the twenty-four months preceding his termination. Given Mr. Aldrich's senior role and extensive client relationships, this provision effectively prevents him from engaging in business development in the unscripted television industry. A court could well find that a provision of this breadth operates as a de facto non-competition agreement and is void under section 16600, consistent with the reasoning of The Retirement Group v. Galante (2009) 176 Cal.App.4th 1226.
6. AMA's Actual Damages from Cross-Claims Are Difficult to Quantify. While AMA's cross-claims provide substantial leverage value, the company faces a meaningful challenge in quantifying its actual damages. AMA's investigation has not confirmed that Halcyon Creek Productions has produced, sold, or commercially exploited any programming based on the transmitted materials. Without evidence of commercial exploitation, AMA's actual damages may be limited to the development costs for the transmitted show concepts (approximately $300,000), the costs of the investigation and remediation, and potentially a reasonable royalty theory, none of which yield a large damages number.
D. Aldrich's Vulnerabilities
Mr. Aldrich's litigation position has its own significant weaknesses, which AMA expects the mediator to weigh in evaluating the reasonableness of a settlement:
1. Deposition Performance. Mr. Aldrich was a poor witness at his May 22 deposition, particularly on the critical issue of the Halcyon Creek transmissions. His "co-production opportunity" explanation was vague, inconsistent, and wholly uncorroborated by any contemporaneous documentation. He appeared evasive when pressed on the specifics of the alleged co-production arrangement and was unable to identify any AMA executive who had authorized him to explore such a relationship. A jury viewing this testimony would likely find it unconvincing.
2. Key Admissions. Mr. Aldrich acknowledged under oath that the materials he transmitted were "proprietary" and that the Summit Challenge revenue model was "confidential financial information." He also acknowledged that he did not seek or obtain authorization from any AMA executive before transmitting the materials to Halcyon Creek. These admissions undermine his position on both AMA's cross-claims and the for cause issue.
3. Signed Policy Acknowledgment. Mr. Aldrich cannot credibly claim ignorance of AMA's Acceptable Use and Confidentiality Policy. He signed and acknowledged the policy on April 12, 2021, approximately eighteen months before the bulk of the transmissions occurred. The policy is clear, unambiguous, and specifically addresses the unauthorized transmission of proprietary materials to personal email accounts or to third parties.
4. Wrongful Termination Claim Is Weak. Mr. Aldrich's Tameny claim requires him to establish that his termination violated a fundamental public policy of the State of California. He characterizes the Mercer restructuring directive as an effort to misclassify employees — converting full-time positions to independent contractor relationships — and contends that his opposition to this misclassification constituted protected activity. However, Mr. Aldrich has produced no evidence, beyond his own characterization, that the restructuring directive would actually have resulted in misclassification. The directive itself — which proposed restructuring certain production teams — is ambiguous on its face and does not explicitly direct or contemplate misclassification. This claim is speculative and lacks evidentiary support.
5. Emotional Distress Claim. To the extent Mr. Aldrich seeks emotional distress damages, he has no evidence of physical injury, and his supporting evidence of emotional suffering is limited. Any recovery on this component would be modest at best.
VI. DAMAGES ANALYSIS
A. Aldrich's Claims — AMA's Exposure
The following table compares Mr. Aldrich's initial demand with AMA's risk-adjusted assessment of exposure on each component of his claimed damages:
Note Regarding RSU Valuation: At the time of Mr. Aldrich's termination in October 2022, his 15,300 unvested RSUs were valued at approximately $332,200, based on the then-current AGMG share price of approximately £18.79 per share, converted at the October 2022 exchange rate of approximately $1.155 per pound sterling, yielding an approximate per-share value of $21.71. As of late November 2023, the AGMG share price has risen to approximately £19.50 per share, and the exchange rate has shifted to approximately $1.24 per pound sterling, yielding an updated per-share value of approximately $24.18. At the current valuation:
• Full acceleration of all 15,300 unvested RSUs would yield approximately $369,954 (15,300 × $24.18).
• Partial acceleration of 10,200 RSUs (AMA's revised proposal) would yield approximately $246,636 (10,200 × $24.18).
B. AMA's Cross-Claims — Recovery Value
AMA's cross-claims serve primarily a strategic and leverage function in the context of settlement, rather than providing a basis for significant quantifiable monetary recovery. AMA's candid assessment is as follows:
Actual Damages. AMA's actual damages from Mr. Aldrich's unauthorized transmissions are difficult to prove in the absence of evidence that Halcyon Creek Productions has produced, sold, or commercially exploited any programming based on the transmitted materials. AMA's investigation to date has not confirmed any commercial exploitation. The development costs for the three transmitted show concepts — approximately $300,000 in total — provide a floor for actual damages, but this figure is relatively modest in the context of the overall dispute.
Injunctive Relief. The return or certified deletion of all AMA proprietary materials in Mr. Aldrich's possession, custody, or control — including all materials on his personal email accounts, cloud storage, personal devices, and any copies provided to Halcyon Creek Productions — is achievable through settlement and has significant practical value to AMA. Securing this relief through settlement is more efficient and certain than seeking it through litigation.
Exemplary Damages. If AMA were to prove at trial that the misappropriation was "willful and malicious," exemplary damages of up to twice the actual damages would be available under CUTSA section 3426.3. However, the assessment of such damages is speculative at the mediation stage and depends on factual findings that AMA cannot guarantee.
Narrative Value. Perhaps the most important function of AMA's cross-claims is the reframing of the case narrative. Mr. Aldrich's litigation posture depends on presenting himself as a loyal, high-performing executive who was wrongfully terminated for standing up to management. AMA's cross-claims introduce a powerful counter-narrative: that Mr. Aldrich was an unfaithful officer who, while still employed, systematically transmitted proprietary materials and trade secrets to a competitor owned by his personal associate, without authorization or business justification. This counter-narrative materially reduces the "jury appeal" of Mr. Aldrich's claims and significantly increases his settlement risk.
C. Cost of Continued Litigation
Both parties face substantial costs if this matter proceeds to trial:
AMA's Estimated Additional Costs. If the case does not settle and proceeds through trial preparation and trial, AMA estimates its additional defense costs at approximately $200,000 to $350,000, encompassing continued attorney fees, expert costs (if retained), trial preparation, and trial time. These costs are in addition to the approximately $425,000 already expended in defense of this matter through the date of this brief.
Aldrich's Estimated Costs. Mr. Aldrich's counsel, Whitfield & Associates, is a Beverly Hills boutique firm. While AMA does not have precise information regarding Mr. Aldrich's legal costs, the billing rates and time commitments associated with additional discovery motions, trial preparation, and trial time would be substantial.
Combined Cost Analysis. The combined litigation costs that both parties would incur to take this matter to trial likely exceed the current gap between the parties' settlement positions. This economic reality should motivate both sides to negotiate in good faith toward resolution.
Trial Timeline. The earliest realistic trial date, given the current Superior Court calendar, is likely in the third or fourth quarter of 2024, creating nine to twelve months of additional uncertainty, management distraction, and litigation expense for both sides. For AMA, this period would require the continued involvement of senior executives — including President Mercer, SVP Okafor, VP Tanaka, and SVP Prescott — in trial preparation, including trial testimony preparation, document review, and consultations with counsel.
VII. INSURANCE — SELF-FUNDED MATTER
AMA's employment practices liability insurance carrier, Pemberton Mutual Assurance Co. (Policy No. PMA-EPL-2022-00837), denied coverage for the Aldrich dispute in a Reservation of Rights letter dated December 22, 2022. Pemberton identified three principal grounds for the coverage denial:
(1) The Insured v. Insured Exclusion set forth in Section IV.C of the Policy, on the basis that AMA's cross-claims against Mr. Aldrich constitute "offensive litigation by the insured," which triggers the exclusion and renders the entire dispute outside the scope of coverage;
(2) Mr. Aldrich's claims are individual in nature, not part of a "pattern or practice" claim, and therefore do not satisfy certain threshold requirements of the Policy;
(3) Mr. Aldrich's restrictive covenant and trade secret claims relate to the company's proprietary business interests and do not fall within the definition of "Employment Practices" as set forth in the Policy.
AMA disagrees with Pemberton's coverage analysis on several of these grounds, but has determined that the cost and distraction of pursuing coverage litigation against Pemberton at this time would not be productive, particularly given AMA's desire to resolve the Aldrich matter promptly. Accordingly, the defense of the Aldrich case and any settlement payment will be entirely self-funded by AMA.
AMA's directors and officers liability insurance carrier, Redcliffe Specialty Insurance Ltd. (Policy No. RSI-DO-2022-04419), was noticed on a precautionary basis. However, no individual AMA officers have been named as defendants in the Aldrich action, and the D&O policy has not been triggered. AMA does not anticipate that the D&O policy will become relevant to the resolution of this matter.
VIII. MEDIATION HISTORY AND CURRENT POSTURE
A. September 8, 2023 — Combined Mediation Session
The Aldrich dispute was addressed during the combined class action/individual mediation session held on September 8, 2023, before the Honorable Patricia Okoro (Ret.). That session was the second formal mediation of the Aldrich claims, the first having been an informal pre-litigation demand exchange that did not involve a neutral.
During the September session, the Aldrich matter was addressed in the afternoon, following the productive morning session that resulted in the settlement of the Fuentes class action. The negotiation of the Aldrich matter proceeded as follows:
• Opening positions: Mr. Aldrich opened at $3.8 million in cash, plus full acceleration of all 15,300 unvested RSUs. AMA opened at $1.75 million in cash, plus acceleration of 8,000 RSUs.
• Subsequent movement: Over the course of approximately three hours of shuttle diplomacy, Mr. Aldrich moved to $3.2 million plus full RSU acceleration, and AMA moved to $2.0 million plus acceleration of 8,000 RSUs.
• Gap at close: The cash gap at the close of the session was $1.2 million ($3.2 million vs. $2.0 million). The RSU gap remained at full acceleration (15,300) vs. partial acceleration (8,000).
In addition to the cash and RSU gaps, the parties identified three key non-monetary sticking points that contributed to the impasse:
1. RSU Treatment: Mr. Aldrich insisted on full acceleration of all 15,300 unvested RSUs, arguing that the for cause termination was wrongful and that he would have vested fully had his employment continued. AMA offered acceleration of 8,000 RSUs, representing a compromise between full acceleration and total forfeiture, reflecting the genuine uncertainty regarding the for cause determination.
2. Restrictive Covenant Release: Mr. Aldrich demanded a complete release of all post-employment restrictive covenant obligations, including his confidentiality obligations under Section 9.4. AMA was and remains unwilling to release Mr. Aldrich from his confidentiality obligations, particularly given that the core of the dispute involves his unauthorized disclosure of precisely the types of information that Section 9.4 is designed to protect. AMA's position on this point has not changed and will not change: retention of Section 9.4, in full force and for an indefinite term, is a non-negotiable condition of any settlement.
3. Non-Disparagement Duration: Mr. Aldrich sought a non-disparagement clause of unlimited duration. AMA proposed a three-year term, which AMA believes is reasonable and consistent with market practice for executive separations in the entertainment industry.
B. Developments Since September
Several developments since the September mediation session have improved the prospects for resolution:
Resolution of Class Action. The Fuentes class action settlement has proceeded through preliminary approval (October 18, 2023) and class notice (November 3, 2023) without material obstacles. The opt-out rate is low (23 opt-outs, representing approximately 1.24% of the class), and the four objections received have all been non-substantive. The final approval hearing is scheduled for February 2, 2024. With the class action on a clear and favorable trajectory, AMA can now devote its full attention and resources to resolving the Aldrich matter.
Reassessment Period. Both parties have had approximately three months to step back, reassess their positions, and reconsider the risks and costs of continued litigation. AMA has used this period to refine its damages analysis, reconsider its RSU offer, and develop revised positions on the non-monetary terms. AMA's hope and expectation is that Mr. Aldrich's counsel has undertaken a similarly candid reassessment.
Revised RSU Offer. AMA has increased its RSU acceleration offer from 8,000 units to 10,200 units, representing approximately two-thirds of Mr. Aldrich's unvested equity. This reflects AMA's recognition that a compromise on this issue — rather than adherence to an all-or-nothing position on either side — is necessary to bridge the gap.
Motivation to Resolve. Both parties have strong reasons to resolve this matter now. AMA seeks a clean resolution of all pending employment litigation, in conjunction with the near-final class settlement, to present a unified and stabilized posture to its parent company, its Board, and the market. Mr. Aldrich, for his part, should want certainty and the freedom to move forward in his career without the overhang of active litigation and unresolved restrictive covenant obligations.
IX. PROPOSED RESOLUTION
AMA proposes a comprehensive, global settlement of all claims and cross-claims on the following terms. AMA presents these terms not as a final, take-it-or-leave-it offer, but as a framework for productive negotiation at the December 8 session.
A. Monetary Terms
Total Lump Sum Payment to Aldrich: AMA proposes a total cash payment to Mr. Aldrich in the range of $2,000,000 to $2,500,000, inclusive of all claimed damages, severance, bonus, expense reimbursement, emotional distress, and any other component of Mr. Aldrich's claims. This payment would be made within twenty-one (21) calendar days of the mutual execution of a final Settlement Agreement and General Release.
Tax Allocation: The parties would negotiate a mutually acceptable allocation of the settlement payment between wages/compensation (subject to W-2 reporting, income tax withholding, and payroll taxes) and non-wage damages (subject to 1099 reporting). AMA proposes an approximate allocation of 50% wages / 50% non-wage damages, reflecting the mixed nature of Mr. Aldrich's claims. Mr. Aldrich may propose a different allocation, and AMA is willing to discuss a reasonable allocation that both parties will report consistently for federal and state tax purposes. Neither party would be required to indemnify the other for the tax consequences of the settlement, though both parties would agree to cooperate in the event of an audit.
B. RSU Acceleration
AMA proposes acceleration of 10,200 RSUs of the 15,300 unvested restricted stock units remaining in Mr. Aldrich's equity compensation grant at the time of his termination. This figure represents approximately two-thirds of Mr. Aldrich's unvested equity and reflects a meaningful increase from AMA's prior offer of 8,000 units at the September session.
The remaining 5,100 RSUs would be forfeited, representing Mr. Aldrich's concession in exchange for the cash payment, the RSU acceleration, and the other favorable terms of the settlement.
At the current AGMG share price of approximately £19.50 per share (approximately $24.18 per share at current exchange rates), the estimated value of the 10,200 accelerated RSUs is approximately $246,636.
Vesting of the accelerated RSUs would occur upon the mutual execution of the Settlement Agreement or, at AMA's election, upon the filing of the Joint Stipulation for Dismissal with Prejudice — the specific trigger to be negotiated between the parties. AMA's parent company, AGMG, and its equity compensation team (contact: Malcolm Dunmore, Chief Financial Officer, AGMG) would process the acceleration in accordance with the terms of the AGMG RSU Plan. AMA would coordinate with Mr. Aldrich's counsel and any financial advisor designated by Mr. Aldrich to ensure timely and orderly vesting and settlement of the accelerated units.
C. Restrictive Covenant Modifications
AMA proposes the following modifications to the post-employment restrictive covenants set forth in Sections 9.1 through 9.4 of the Employment Agreement:
AMA's concession on Section 9.1 is substantial. While AMA recognizes that Section 9.1 is unenforceable under California law and has not sought to enforce it, the formal voiding of the provision in the Settlement Agreement gives Mr. Aldrich complete certainty and removes any cloud over his ability to compete immediately. This is a meaningful benefit, as it eliminates any risk, however theoretical, that AMA or AGMG could seek to enforce the non-competition provision in another jurisdiction.
The reduction of Sections 9.2 and 9.3 from twenty-four months to twelve months is a meaningful concession that balances AMA's legitimate interest in protecting its workforce and client relationships against Mr. Aldrich's right to career mobility. A twelve-month period is well within market norms for executive separations in the entertainment industry and provides AMA with protection during the most commercially sensitive period immediately following Mr. Aldrich's departure.
The retention of Section 9.4 is essential to AMA and is non-negotiable. The confidentiality provision protects AMA's trade secrets and proprietary information — the very information that Mr. Aldrich misappropriated and transmitted to a competitor. It would be antithetical to the purpose of this settlement for AMA to release Mr. Aldrich from the very obligations he breached.
D. Mutual General Release
Both parties would execute a comprehensive mutual general release of all claims and cross-claims arising out of, relating to, or in any way connected with Mr. Aldrich's employment with AMA, the termination of that employment, and the events underlying the claims and cross-claims asserted in Case No. 22STCV41087.
The mutual release would include an express waiver of the protections of California Civil Code section 1542, which provides:
"A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party."
Both parties would knowingly and voluntarily waive this provision, acknowledging that the release is intended to encompass all claims, whether known or unknown, that relate to or arise from Mr. Aldrich's employment and its termination.
The release would cover all claims asserted in Case No. 22STCV41087, including all five causes of action in Mr. Aldrich's Complaint and all four causes of action in AMA's First Amended Cross-Complaint. The release would extend to the parties' respective successors, assigns, officers, directors, employees, agents, and legal representatives.
E. Return/Deletion of AMA Materials
Mr. Aldrich would be required to return to AMA, or certify the permanent deletion of, all AMA proprietary materials in his possession, custody, or control within ten (10) business days of the execution of the Settlement Agreement. This obligation includes, without limitation:
• All materials stored on or transmitted through Mr. Aldrich's personal email accounts, including galdrich.private@Northgate Software.com and any other personal email accounts;
• All materials stored in personal cloud storage accounts, including Larkspur Technologies, Hollowell Health IT, Meridian Systems, and any other cloud-based storage;
• All materials stored on personal devices, including laptops, desktop computers, tablets, smartphones, and external hard drives or USB drives;
• All copies of any AMA proprietary materials that Mr. Aldrich provided to any third party, including but not limited to Halcyon Creek Productions LLC and its principal, Nina Castellanos;
• All physical copies, if any, of AMA proprietary documents.
Mr. Aldrich would be required to provide AMA with a written certification of compliance, signed under penalty of perjury, confirming that he has returned or permanently deleted all such materials and that he has not retained any copies in any form.
F. Neutral Reference Agreement
AMA would agree to provide a neutral reference for Mr. Aldrich, limited to confirming the following:
• Dates of employment: September 5, 2017 through October 14, 2022
• Title: Senior Vice President of Original Content & Executive Producer
• Eligibility for rehire: Neutral
AMA

CALDERWOOD & HARKNESS LLP 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200

MEDIATION BRIEF OF DEFENDANT AND CROSS-COMPLAINANT AURELIUS MEDIA AMERICAS INC.

I. INTRODUCTION

III. PROCEDURAL HISTORY

IV. SUMMARY OF CLAIMS AND CROSS-CLAIMS

V. AMA'S POSITION ON THE MERITS

VI. DAMAGES ANALYSIS

VIII. MEDIATION HISTORY AND CURRENT POSTURE

IX. PROPOSED RESOLUTION

Record

Parties

Dates

Amounts