1017-00005 · Aurelius Global Media Group · Engagement

conflict-check-memo.docx DOCUMENT Funds

24 / 38 ← → ✕

Contract analysis Extract to table

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — INTERNAL MEMORANDUM

CALDERWOOD & HARKNESS LLP

Conflict Check Memorandum

780 Seventh Avenue, 34th Floor New York, NY 10019

1999 Avenue of the Stars, Suite 2800 Los Angeles, CA 90067

Date: April 30, 2023

To: Bernard Crawford, Responsible Partner, Labor & Employment Practice Group Renata Vasquez, Billing Partner, Labor & Employment Practice Group

From: Devon Archer, Lead Associate, Labor & Employment Practice Group Nadia Petrov, Working Associate, Labor & Employment Practice Group

Re: Conflicts Clearance — Proposed Engagement by Aurelius Global Media Group PLC — Independent Workplace Investigation

Proposed Matter Number: 1017-00005

This memorandum is protected by the attorney-client privilege, the work product doctrine, and the attorney self-evaluative privilege. It is prepared for the sole purpose of assisting Calderwood & Harkness LLP in discharging its professional and ethical obligations in connection with a proposed new client engagement. This memorandum is not to be disclosed to any person outside the firm without the express written authorization of the Responsible Partner and the General Counsel of Calderwood & Harkness LLP.

1. PURPOSE OF MEMORANDUM

This memorandum confirms that the New Business / Conflicts Department of Calderwood & Harkness LLP ("the Firm" or "Calderwood & Harkness") has completed its comprehensive review of all known parties, entities, and individuals in connection with the proposed retention of the Firm by the Board of Directors of Aurelius Global Media Group PLC ("AGMG" or the "Company") to conduct an independent, privileged workplace investigation (the "Proposed Engagement"). The purpose of this memorandum is threefold:

First, this memorandum documents the scope and methodology of the conflicts search undertaken by the Firm's New Business / Conflicts Department, including identification of all parties, entities, and individuals submitted for clearance, the databases and records consulted, and the supplemental inquiries made to relevant practice groups and individual attorneys.

Second, this memorandum confirms that no disqualifying conflicts of interest have been identified with respect to the Proposed Engagement and that no ethical screens, informed-consent waivers, or other conflict-mitigation measures are required at this time. Accordingly, the Proposed Engagement may proceed subject to the approval of the Responsible Partner and the execution of a formal engagement letter.

Third, this memorandum memorializes certain ethical considerations and observations that bear on the conduct of the Proposed Engagement, including the necessity of delivering appropriate corporate-counsel (Upjohn) warnings, the protocols for communicating with represented persons, and cross-border privilege coordination between the United States and the United Kingdom.

The conflicts check was initiated on April 28, 2023, upon notification from Fiona Blackwood, General Counsel of AGMG, that the People & Culture Committee of the AGMG Board of Directors (chaired by Dame Cordelia Ashworth, Independent Non-Executive Director) and the Audit & Risk Committee of the AGMG Board of Directors (chaired by Raymond Okoro, Independent Non-Executive Director) had jointly resolved, by written resolution dated April 28, 2023, to retain independent outside counsel to conduct a privileged internal investigation into workplace misconduct allegations involving a senior executive of the Company's filmed entertainment subsidiary. Ms. Blackwood's initial contact was directed to Bernard Crawford, Partner, in the Firm's Los Angeles office, who had previously been introduced to Ms. Blackwood at a Practising Law Institute conference in February 2023 but had no prior professional engagement with AGMG or Ms. Blackwood. Mr. Crawford promptly notified the New Business / Conflicts Department, and the clearance process was initiated the same business day.

The searches and analysis described in this memorandum were conducted over the period of April 28 through April 30, 2023. All results are current as of the date of this memorandum.

2. DESCRIPTION OF PROPOSED ENGAGEMENT

2.1 Client Entity

The proposed client is Aurelius Global Media Group PLC ("AGMG"), a public limited company incorporated and registered in England and Wales under the Companies Act 2006 (Company Number 08234519). AGMG is listed on the London Stock Exchange Alternative Investment Market (AIM) under the ticker symbol "AGMG" and, as of the most recently available public filings, maintains a market capitalization of approximately £3.8 billion (approximately $4.75 billion at current exchange rates). The Company's registered office is located at 45 Aldwych House, Kingsway, London WC2B 6AH, United Kingdom.

AGMG is a diversified global media and entertainment conglomerate organized into four principal operating divisions: (i) filmed entertainment, (ii) streaming and digital media, (iii) publishing, and (iv) e-commerce. The Company employs approximately 14,200 persons globally, of whom approximately 4,600 are based in the United States. For the fiscal year ended December 31, 2022, AGMG reported consolidated global revenue of £2.94 billion (approximately $3.67 billion).

2.2 Subsidiary Involved in the Proposed Engagement

The workplace investigation will principally concern Aurelius Pacific Studios Inc. ("APS"), a Delaware corporation and wholly owned subsidiary of AGMG. APS is headquartered at 3200 West Alameda Avenue, Suite 400, Burbank, California 91505, and its registered agent for service of process in Delaware is c/o Capitol Registered Agents Inc., 1209 Orange Street, Wilmington, Delaware 19801. APS constitutes the principal U.S. operating entity of AGMG's filmed entertainment division. For the fiscal year ended December 31, 2022, APS reported revenue of approximately $1.12 billion and employed approximately 2,300 individuals, predominantly in the greater Los Angeles metropolitan area.

2.3 Nature of the Proposed Engagement

Calderwood & Harkness has been asked to conduct an independent, privileged workplace investigation into allegations of sexual harassment, retaliation, and hostile work environment directed against Marcus Hale, President of Aurelius Pacific Studios Inc. The investigation will encompass the review and assessment of all relevant facts and circumstances underlying the allegations, including but not limited to: (a) the initial written complaint filed by Jenna Morales, Vice President of Development at APS, on April 18, 2023; (b) the corroborating complaint filed by Claire Ngo, Senior Director of Talent Relations at APS, on April 24, 2023; (c) voluntary reports of retaliation concerns made by Darren Whitfield, SVP of Physical Production at APS, on April 26, 2023; and (d) any additional information, witness testimony, documentary evidence, or electronic data that may be identified during the course of the investigation.

The investigation will be conducted under the protection of the attorney-client privilege and the work product doctrine, with Calderwood & Harkness serving as independent outside counsel to the AGMG Board of Directors (acting through the joint authority of the People & Culture Committee and the Audit & Risk Committee). The Firm will prepare a confidential written report of its findings and recommendations for submission to the committee chairs.

2.4 Governing Law

The allegations at issue principally implicate the California Fair Employment and Housing Act, Cal. Gov. Code §§ 12940 et seq. ("FEHA"), and related California statutory and regulatory provisions governing workplace harassment, discrimination, and retaliation. To the extent relevant, the investigation may also consider applicable federal employment laws, including Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., and the APS employee handbook, workplace policies, and Code of Business Conduct and Ethics.

2.5 Board Authorization

The Proposed Engagement was authorized by a joint resolution of the People & Culture Committee and the Audit & Risk Committee of the AGMG Board of Directors, adopted in writing on April 28, 2023, pursuant to the committees' respective charters and the Company's Articles of Association. The joint resolution provides that independent outside counsel shall be retained to conduct a privileged investigation and report directly to the committee chairs. Chief Executive Officer Elliot Vane formally recused himself from all oversight of the investigation due to his direct reporting relationship with Marcus Hale and has executed a written recusal memorandum, a copy of which has been provided to the Firm by Ms. Blackwood.

2.6 Primary Board Liaison and Reporting Structure

The primary board liaison for the Proposed Engagement will be Fiona Blackwood, General Counsel of AGMG, based in the Company's London headquarters. Ms. Blackwood will serve as the administrative point of contact between the Firm and the board committees. However, Calderwood & Harkness's substantive reporting obligation will be directly to Dame Cordelia Ashworth, Chair of the People & Culture Committee, and Raymond Okoro, Chair of the Audit & Risk Committee. The Firm will not report to, or take direction from, any member of APS management, the CEO, or any individual who is a subject of or witness in the investigation, except through the committee chairs or as otherwise authorized in writing by the committee chairs.

3. PARTIES AND INDIVIDUALS SEARCHED

The following is a comprehensive list of all entities and individuals submitted to the Firm's New Business / Conflicts Department for conflicts clearance in connection with the Proposed Engagement. Each party was searched under all known name variations, abbreviations, "doing business as" names, and prior names as applicable.

3.1 Client-Side Entities

The following client-side entities were submitted for search:

(a) Aurelius Global Media Group PLC (including all known corporate aliases, abbreviations, and prior names, including "AGMG" and "Aurelius Global");

(b) Aurelius Pacific Studios Inc. (including "APS" and "Aurelius Pacific");

(c) All known direct and indirect subsidiaries, divisions, and affiliates of AGMG, as identified in the Company's most recent annual report and accounts filed with Companies House and AIM, including but not limited to entities within the four global operating divisions: filmed entertainment, streaming/digital media, publishing, and e-commerce;

(d) AGMG global employee count: approximately 14,200 employees worldwide, of whom approximately 4,600 are located in the United States;

(e) AGMG fiscal year 2022 consolidated global revenue: £2.94 billion (approximately $3.67 billion).

The subsidiary search was designed to capture any representation of or adverse involvement with any member of the AGMG corporate family, regardless of whether the specific entity at issue is directly involved in the Proposed Engagement.

3.2 Subject of Investigation

The following individual was submitted as the principal subject of the investigation:

Marcus Hale, age 54, President of Aurelius Pacific Studios Inc. Mr. Hale has served as President of APS since January 2019. His total annual compensation is approximately $4.7 million, comprising a base salary of $1.85 million, a target annual bonus of $1.39 million (with a maximum payout of 200% of target), and annual equity awards with a grant-date fair value of approximately $1.46 million, pursuant to an employment agreement executed on January 7, 2019. Mr. Hale reports directly to CEO Elliot Vane and has nine Senior Vice Presidents as direct reports. Prior to joining APS, Mr. Hale held senior executive positions at two other entertainment studios, which were also searched in the conflicts system.

3.3 Complainants. The following individuals were submitted as the named complainants in the matter:

(a) Jenna Morales, age 38, Vice President of Development, Aurelius Pacific Studios Inc. Ms. Morales has been employed by APS since March 2020. She is the primary complainant and filed an initial written complaint on April 18, 2023, via the third-party ethics hotline operated by Meridian Compliance Solutions LLC. The complaint was assigned case reference number MCS-1014-00001. Ms. Morales's complaint alleges sexual harassment and hostile work environment created by Marcus Hale, including unwanted sexual comments, inappropriate physical contact, and quid pro quo conditioning of project assignments on personal favors.

(b) Claire Ngo, age 33, Senior Director of Talent Relations, Aurelius Pacific Studios Inc. Ms. Ngo has been employed by APS since June 2021. Ms. Ngo filed a corroborating complaint on April 24, 2023, alleging that she witnessed and personally experienced similar conduct by Marcus Hale. Her complaint was filed through APS's internal human resources reporting channel and was escalated to the AGMG Board by Chief People Officer Patricia Sung.

(c) Darren Whitfield, age 47, Senior Vice President of Physical Production, Aurelius Pacific Studios Inc. Mr. Whitfield has been employed by APS since September 2017. On April 26, 2023, Mr. Whitfield voluntarily reported concerns of retaliation by Marcus Hale against employees who had raised workplace concerns, including allegations that Mr. Hale removed Ms. Morales from a high-profile project assignment after learning of her ethics hotline report.

3.4 AGMG Board Members and Officers

The following members of the AGMG Board of Directors and senior officers were submitted for search:

(a) Dame Cordelia Ashworth, Independent Non-Executive Director; Chair, People & Culture Committee;

(b) Raymond Okoro, Independent Non-Executive Director; Chair, Audit & Risk Committee;

(d) Fiona Blackwood, General Counsel;

(e) Patricia Sung, Chief People Officer;

(f) Ingrid Holt, Chief Compliance Officer;

(g) All remaining members of the AGMG Board of Directors (the Board consists of eleven members in total), each of whom was searched individually by full legal name and any known aliases or prior names.

3.5 Aurelius Pacific Studios Internal Personnel

The following additional APS personnel were submitted for search based on their anticipated involvement as witnesses or persons of interest in the investigation:

(a) Victor Gallegos, Vice President of Human Resources, Aurelius Pacific Studios Inc. (Burbank office). Mr. Gallegos is the most senior human resources official at APS and was responsible for initial intake and escalation of certain of the complaints described above.

(b) Cameron Briggs, Senior Vice President of Production, Aurelius Pacific Studios Inc. Mr. Briggs is one of Marcus Hale's direct reports and may be a witness to certain of the alleged conduct.

(c) Serena Whitcomb, former Executive Assistant to Marcus Hale. Ms. Whitcomb was employed by APS from April 2019 through September 2021. During her employment, Ms. Whitcomb filed an informal complaint in July 2021, the substance and disposition of which will be examined during the investigation. Ms. Whitcomb is no longer employed by APS or any AGMG affiliate.

3.6 Opposing / Adverse Counsel

The following law firms and individual attorneys were submitted for search as opposing or potentially adverse counsel:

(a) Thornfield & Associates LLP, a California limited liability partnership, with offices at 10250 Constellation Boulevard, Suite 1950, Los Angeles, California 90067. Thornfield & Associates is a boutique employment defense firm that has been retained as personal counsel for Marcus Hale in connection with the investigation and any related proceedings. The lead attorney is Graham Thornfield, Founding Partner. Mr. Thornfield has been in contact with Ms. Blackwood and has indicated that he will represent Mr. Hale in all matters arising from the investigation.

(b) Nakamura Reeves LLP, a California limited liability partnership, with offices at 515 South Flower Street, Suite 3600, Los Angeles, California 90071. Nakamura Reeves is a plaintiff-side employment litigation firm that has been retained by Jenna Morales as her personal counsel. The lead attorney is Sandra Reeves, Partner. On April 20, 2023, Nakamura Reeves sent a demand letter on behalf of Ms. Morales addressed to APS and AGMG, alleging violations of the California Fair Employment and Housing Act (Cal. Gov. Code §§ 12940 et seq.) and reserving all rights to pursue civil litigation, administrative complaints with the California Civil Rights Department (formerly DFEH), and claims for compensatory and punitive damages. A copy of this demand letter has been provided to the Firm by Ms. Blackwood and will be reviewed as part of the investigation.

3.7 Third-Party Advisors and Service Providers

The following third-party entities were submitted for search based on their known or anticipated involvement with the Proposed Engagement or their existing advisory relationships with AGMG:

(a) Meridian Compliance Solutions LLC, 233 South Wacker Drive, Suite 4100, Chicago, Illinois 60606. Meridian is an Illinois limited liability company that operates the third-party ethics and compliance hotline used by AGMG and its subsidiaries. The initial complaint by Jenna Morales was filed through the Meridian hotline system.

(b) Linden Forensics Group Inc., 201 Mission Street, Suite 1400, San Francisco, California 94105. Linden is a California corporation specializing in digital forensics, electronic discovery, and data preservation. Linden has been identified as a prospective vendor that may be engaged to assist with the collection and forensic analysis of electronic communications, devices, and data relevant to the investigation.

(c) Pendleton & Warwick LLP, 20 Fenchurch Street, 8th Floor, London EC3M 3BY, United Kingdom. Pendleton & Warwick is a limited liability partnership organized under the laws of England and Wales and serves as AGMG's regular UK outside corporate counsel. Coordination with Pendleton & Warwick may be necessary to address cross-border privilege issues and UK employment law considerations.

(d) Greystone Advisors LLP, a limited liability partnership organized under the laws of England and Wales, with offices in London and the United States. Greystone serves as AGMG's external auditor. The Audit & Risk Committee may require coordination between Greystone and the Firm regarding financial controls and reporting implications arising from the investigation.

(e) Kessler & Dunn Insurance Brokers Ltd., a private limited company incorporated in England and Wales. Kessler & Dunn serves as AGMG's insurance broker and may be involved in coordinating insurance coverage and notice obligations in connection with the investigation and any resulting claims.

(f) Northbridge Mutual Insurance Co., a Connecticut insurance company. Northbridge is AGMG's employment practices liability insurance ("EPLI") carrier under Policy No. NM-EPLI-2023-00417. Notice of the investigation and underlying claims may need to be provided to Northbridge under the terms of the EPLI policy.

(g) Castlemaine Underwriters Ltd., an insurance company incorporated in England and Wales. Castlemaine is AGMG's directors' and officers' ("D&O") liability insurance carrier under Policy No. CU-DO-2023-11283. Notice may also be required under the D&O policy depending on the nature and outcome of the investigation.

4. CONFLICTS DATABASE SEARCH METHODOLOGY

4.1 Search System and Parameters

All conflicts searches described in this memorandum were conducted using the Firm's global new-business intake and conflicts management system (the "Conflicts System"), which is the centralized, enterprise-wide database maintained by the Firm's New Business / Conflicts Department for the purpose of identifying and evaluating potential conflicts of interest in connection with prospective client engagements. The Conflicts System contains records of all current and former client representations, adverse-party designations, related-party and affiliated-entity records, co-counsel relationships, and personal financial interest and investment disclosures for all attorneys and professional staff of the Firm. The database is updated on a real-time basis as new matters are opened, existing matters are modified, and lateral hires submit their conflict disclosures.

Each entity and individual listed in Section 3 above was searched using all known permutations and variations of the name, including but not limited to: full legal name, trade names, "doing business as" names, abbreviations, acronyms, former names, and, for individuals, maiden names and known aliases. The searches were designed to capture both exact matches and partial matches that might indicate a potential conflict or relationship warranting further inquiry.

4.2 Scope of Searches

The following categories of records were searched for each entity and individual:

(a) Current and former client representations. The Conflicts System was searched to determine whether the Firm has ever represented, or currently represents, any entity or individual listed in Section 3 in any matter, in any office, in any practice group, and in any capacity (including advisory, transactional, litigation, regulatory, and pro bono representations).

(b) Adverse-party designations. The Conflicts System was searched to determine whether any entity or individual listed in Section 3 has ever been designated as an adverse party, opposing party, or party of interest in any matter in which the Firm has served or is serving as counsel.

(c) Related-party and affiliated-entity records. The Conflicts System was searched to identify any records of related parties, affiliates, parent companies, subsidiaries, or joint venture partners that might create a potential conflict through corporate affiliation or common ownership.

(d) Personal financial interest and investment disclosures. The personal financial interest and investment disclosures of all four proposed staffing attorneys — Bernard Crawford, Renata Vasquez, Devon Archer, and Nadia Petrov — were reviewed to determine whether any proposed staffing attorney holds a personal financial interest in AGMG (including publicly traded equity or debt securities), APS, or any other entity identified in Section 3, or maintains any personal or familial relationship with any individual identified in Section 3.

4.3 Lateral-Hire Conflict Disclosures

In addition to the foregoing, the Firm's records were cross-referenced against the lateral-hire conflict disclosures submitted by each of the four proposed staffing attorneys at the time of their respective commencement of employment with the Firm. These disclosures identify all clients, matters, adverse parties, and potentially conflicting relationships that each attorney brought with them from their prior firm(s). No conflicts or potentially relevant relationships were identified through this review.

4.4 Supplemental Manual Review

Recognizing that the Proposed Engagement involves the entertainment and media industries and that the Firm maintains active entertainment, media, and employment practices groups in both the Los Angeles and New York offices, a supplemental manual review was conducted. This review consisted of inquiries directed to the practice group leaders and designated conflicts liaisons in both the Los Angeles and New York offices' entertainment, media, and employment practices groups to identify any unrecorded informal relationships, referral arrangements, business development contacts, or other connections with any party or entity identified in Section 3 that might not be captured in the Conflicts System. No such relationships or connections were identified.

4.5 Dates of Search

All searches described above were conducted during the period of April 28 through April 30, 2023. The results reported in this memorandum are current as of the close of business on April 30, 2023.

5. RESULTS OF CONFLICTS SEARCH

The following sets forth the results of the conflicts search for each category of party and individual identified in Section 3.

5.1 Aurelius Global Media Group PLC and Affiliates

A comprehensive search of the Conflicts System returned no records indicating that the Firm has ever represented, or currently represents, Aurelius Global Media Group PLC or any of its direct or indirect subsidiaries, divisions, or affiliates, including Aurelius Pacific Studios Inc., in any matter, in any office, in any practice group, or in any capacity. Additionally, no records were identified indicating that AGMG or any of its subsidiaries has ever been designated as an adverse party, opposing party, or party of interest in any matter in which the Firm has served or is serving as counsel. The supplemental manual review of the entertainment, media, and employment practices groups in the Los Angeles and New York offices did not reveal any unrecorded relationships with AGMG or its affiliates.