PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT PREPARED AT THE DIRECTION OF COUNSEL
MEMORANDUM
FROM: Bernard Crawford, Responsible Partner, Labor & Employment, Calderwood & Harkness LLP Devon Archer, Lead Associate, Labor & Employment, Calderwood & Harkness LLP
TO: Dame Cordelia Ashworth, Independent Non-Executive Director and Chair, People & Culture Committee, Aurelius Global Media Group PLC Raymond Okoro, Independent Non-Executive Director and Chair, Audit & Risk Committee, Aurelius Global Media Group PLC
CC: Fiona Blackwood, General Counsel, Aurelius Global Media Group PLC (Board liaison to Calderwood & Harkness LLP)
DATE: May 4, 2023
RE: Investigation Scope, Methodology & Protocol — Allegations of Sexual Harassment and Retaliation Against Marcus Hale, President, Aurelius Pacific Studios Inc.
MATTER NO.: 1017-00005
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I. PURPOSE OF THIS MEMORANDUM
This memorandum sets forth the scope, methodology, privilege framework, witness plan, document collection plan, estimated timeline, and reporting protocol for the independent privileged workplace investigation authorized by the joint resolution of the People & Culture Committee and the Audit & Risk Committee of the Board of Directors of Aurelius Global Media Group PLC ("AGMG") on April 28, 2023. The investigation concerns allegations of sexual harassment and retaliation against Marcus Hale, President of Aurelius Pacific Studios Inc. ("APS"), a wholly owned subsidiary of AGMG.
Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") was formally retained on May 2, 2023 pursuant to an engagement letter executed by the Board of Directors of AGMG through Fiona Blackwood, General Counsel, who is serving as the Board's primary liaison to the Firm in connection with this matter. The engagement letter establishes that Calderwood & Harkness's client in this engagement is AGMG, acting through its Board of Directors and the two authorizing Board committees, and not any individual officer, director, or employee.
This memorandum is intended to serve as the operative charter for the investigation and to ensure alignment between the investigation team and the authorizing Board committees on all material aspects of the engagement. We respectfully request that Dame Cordelia Ashworth and Raymond Okoro, as Chairs of the authorizing committees, review this memorandum and confirm that it accurately reflects the intended scope and protocol for the investigation. Any proposed modifications to the scope, methodology, or protocol described herein should be communicated to Bernard Crawford through Fiona Blackwood at the earliest opportunity so that the investigation may proceed without delay.
The remainder of this memorandum is organized as follows: Section II provides relevant background information regarding the client, the subsidiary employer entity, the subject of the investigation, the complaint chronology, the nature of the allegations, and relevant prior complaint history. Section III defines the scope of the investigation, including the matters within scope, the governing legal standards, and the matters outside scope. Sections IV through VII address investigation methodology, the privilege framework, the recusal of CEO Elliot Vane, and coordination with external parties. Sections VIII through XIV cover interim protective measures, staffing, the estimated timeline, the reporting protocol, confidentiality and anti-retaliation protections, document retention, and immediate next steps.
II. BACKGROUND
A. The Client
Aurelius Global Media Group PLC ("AGMG") is a publicly traded media, entertainment, and e-commerce conglomerate incorporated in England and Wales. AGMG's shares are listed on the London Stock Exchange's AIM market, and the company has a current market capitalization of approximately £3.8 billion. For the fiscal year ended December 31, 2022, AGMG reported global revenue of approximately £2.94 billion (approximately $3.67 billion at applicable exchange rates). AGMG employs approximately 14,200 people globally, of whom approximately 4,600 are based in the United States.
AGMG's operations are organized into four global divisions: (i) filmed entertainment, encompassing theatrical film production and distribution; (ii) streaming and digital, encompassing the company's direct-to-consumer streaming platform and digital content operations; (iii) publishing, encompassing book and periodical publishing; and (iv) e-commerce, encompassing the company's consumer product and digital marketplace businesses.
AGMG's Board of Directors currently comprises eleven members, including executive and non-executive directors. The Board maintains several standing committees, including the People & Culture Committee, chaired by Dame Cordelia Ashworth, and the Audit & Risk Committee, chaired by Raymond Okoro, both of whom are independent non-executive directors. The Board's registered office is located at 45 Aldwych House, Kingsway, London WC2B 6AH, United Kingdom.
B. The US Subsidiary / Employer Entity
Aurelius Pacific Studios Inc. ("APS") is a Delaware corporation and a wholly owned subsidiary of AGMG. APS is headquartered at 3200 West Alameda Avenue, Suite 400, Burbank, California 91505, and maintains satellite offices in Atlanta, Georgia and New York, New York. APS serves as the operational entity for AGMG's US-based filmed entertainment and streaming content production activities, encompassing film development, production, post-production, and distribution operations within the United States.
For the fiscal year ended December 31, 2022, APS reported revenue of approximately $1.12 billion. APS employs approximately 2,300 individuals across its Burbank headquarters and satellite offices. As a California-headquartered employer, APS is subject to the California Fair Employment and Housing Act ("FEHA"), Cal. Gov. Code §§ 12940 et seq., and related California workplace regulations. APS is the direct employer of all US studio-division personnel, including the subject of this investigation, Marcus Hale, and the three complainants described below.
C. The Subject of the Investigation
The subject of the investigation is Marcus Hale, age 54, who has served as President of Aurelius Pacific Studios Inc. since January 2019. In that capacity, Hale is the most senior executive within the APS operating entity and reports directly to AGMG Chief Executive Officer Elliot Vane. Hale oversees all US film and streaming production operations, with a direct-report team of nine Senior Vice Presidents spanning development, production, physical production, post-production, talent relations, marketing, distribution, finance, and business affairs.
Hale's total annual compensation is approximately $4.7 million, comprising a base salary of $1.85 million, a target performance bonus of $1.39 million (75% of base salary), and annual equity awards valued at approximately $1.46 million. Hale's employment is governed by an employment agreement with APS executed on January 7, 2019 (the "Hale Employment Agreement"), which contains, inter alia, provisions relating to compensation, benefits, termination, and restrictive covenants, as well as change-of-control and termination-for-cause provisions (Section 9.2(b) of that agreement) that may bear on the remedial considerations following the investigation.
As of May 3, 2023, Hale has been placed on paid administrative leave by AGMG, acting through Fiona Blackwood and in consultation with the Board committees. Simultaneously, Hale's access to company email, the company's Meridian Solutions messaging platform, and all internal information systems has been suspended. Hale has been advised that the paid administrative leave is a precautionary measure pending the outcome of the investigation and is not a disciplinary action or determination of any kind.
Hale has retained personal counsel in connection with the investigation: Graham Thornfield, Founding Partner of Thornfield & Associates LLP, located at 10250 Constellation Boulevard, Suite 1950, Los Angeles, California 90067. On May 1, 2023, Thornfield notified Fiona Blackwood and Calderwood & Harkness in writing that he represents Hale in this matter and that all substantive communications with Hale should be directed through his office.
D. Complaint Chronology
The following chronology summarizes the key events leading to the retention of Calderwood & Harkness:
April 18, 2023: Jenna Morales, Vice President of Development at APS (age 38, employed by APS since March 2020), submitted a written complaint through the Meridian Compliance Solutions LLC Ethics & Compliance Hotline, which serves as AGMG's third-party confidential complaint intake mechanism. The complaint was assigned case reference number MCS-1014-00001. Morales's complaint was initially submitted on an anonymous basis. Meridian Compliance Solutions LLC ("Meridian") is a third-party hotline operator based at 233 South Wacker Drive, Suite 4100, Chicago, Illinois 60606. Meridian is engaged by AGMG under the supervision of Ingrid Holt, Chief Compliance Officer of AGMG. In her complaint, Morales alleged a pattern of sexual harassment by Marcus Hale occurring over a period of approximately six months.
April 19, 2023: Morales contacted the Meridian hotline a second time and self-identified, providing her name, position, and contact information. On the same day, Victor Gallegos, Vice President of Human Resources at APS (based in Burbank), received the complaint from Meridian in accordance with the hotline's escalation protocols. Gallegos promptly escalated the complaint to Fiona Blackwood, General Counsel of AGMG, and Patricia Sung, Chief People Officer of AGMG. This escalation was consistent with AGMG's internal protocols, which require complaints against senior executives at the vice president level and above to be reported to the General Counsel and the Chief People Officer.
April 20, 2023: Sandra Reeves of Nakamura Reeves LLP (515 South Flower Street, Suite 3600, Los Angeles, California 90071) sent a formal demand letter on behalf of Jenna Morales to APS, attention Victor Gallegos. The letter alleged violations of the California Fair Employment and Housing Act (FEHA), Cal. Gov. Code §§ 12940 et seq., asserted claims of sexual harassment (both quid pro quo and hostile work environment theories), and demanded that APS preserve all documents, electronic communications, and other materials relevant to Morales's employment, her interactions with Hale, and any prior complaints of harassment or misconduct involving Hale. The demand letter also reserved Morales's right to file a complaint with the California Civil Rights Department (formerly the Department of Fair Employment and Housing) and to pursue litigation. As of the date of this memorandum, no government agency charge or civil action has been filed by Morales.
April 24, 2023: Claire Ngo, Senior Director of Talent Relations at APS (age 33, employed by APS since June 2021), submitted a separate written complaint directly to Victor Gallegos in Burbank. Ngo's complaint corroborated certain aspects of Morales's allegations — particularly with respect to Hale's general pattern of behavior toward female subordinates — and set forth Ngo's own distinct allegations of sexual harassment and exclusionary conduct by Hale, as described in Section II.E.2 below. Ngo is not currently represented by outside counsel.
April 26, 2023: Darren Whitfield, Senior Vice President of Physical Production at APS (age 47, employed by APS since September 2017), voluntarily contacted Victor Gallegos to report concerns about what Whitfield characterized as retaliatory conduct by Hale. Specifically, Whitfield reported that after he raised concerns at a leadership team meeting about Hale's treatment of female employees, Hale reassigned two of Whitfield's highest-profile production projects to another SVP. The details of Whitfield's allegations are set forth in Section II.E.3 below. Whitfield is not currently represented by outside counsel.
April 28, 2023: Following emergency consultations among the independent non-executive directors and General Counsel Fiona Blackwood, the People & Culture Committee (chaired by Dame Cordelia Ashworth) and the Audit & Risk Committee (chaired by Raymond Okoro) held a joint session and adopted a resolution to retain independent outside counsel to conduct a privileged investigation into the allegations against Marcus Hale. As part of the resolution, the committees determined that CEO Elliot Vane should be formally recused from any oversight of or involvement in the investigation, given Vane's direct reporting relationship with Hale and the potential for conflicts of interest. The resolution authorized Fiona Blackwood to execute an engagement letter with Calderwood & Harkness LLP on behalf of the Board of Directors.
E. Nature of the Allegations
Based on the complaints received to date, the allegations against Marcus Hale fall into three principal categories, each summarized below. These summaries are based on the complainants' statements as provided through the Meridian hotline report, the Nakamura Reeves demand letter, and the written complaints submitted to Victor Gallegos. The accuracy of these allegations has not yet been determined and will be the subject of the investigation.
1. Sexual Harassment (Morales)
Jenna Morales alleges that Marcus Hale engaged in a pattern of repeated unwanted sexual advances and sexually explicit comments directed at her between approximately September 2022 and March 2023. Specifically, Morales alleges:
(a) During a production trip to Vancouver, British Columbia in October 2022, Hale invited Morales to his hotel room on at least two occasions, once after a group dinner and once after an evening production meeting. Morales alleges that the invitations were sexual in nature and that she declined both times.
(b) On three separate occasions — November 14, November 29, and December 8, 2022 — Hale sent Morales sexually suggestive text messages via his company-issued mobile phone to her company-issued mobile phone. Morales has represented through her counsel that she preserved these text messages.
(c) During a one-on-one meeting on January 11, 2023, in Hale's office at the APS Burbank headquarters, Hale made a comment about Morales's physical appearance that Morales characterized as sexually inappropriate and demeaning.
(d) At a company dinner on February 3, 2023 at a restaurant in Los Angeles (the specific venue to be confirmed), Hale placed his hand on Morales's lower back and then on her thigh while they were seated at the same table. Morales alleges that this physical contact was unwelcome and that she moved away from Hale. Morales further alleges that other employees were present at the dinner and may have witnessed the conduct.
Morales alleges that this conduct was unwelcome, that it created a hostile and intimidating work environment, and that it affected her ability to perform her job duties effectively. Through her counsel, Morales has also alleged that Hale's conduct constituted quid pro quo harassment, in that Hale's interest in her diminished when she rebuffed his advances, leading to her exclusion from certain development projects in early 2023.
2. Sexual Harassment (Ngo)
Claire Ngo alleges that Marcus Hale made sexually suggestive comments about her attire and asked her a personal question — specifically, "Are you seeing anyone?" — at a company off-site retreat held at the Monarch Valley Resort in Ojai, California on February 17–18, 2023. Ngo alleges that these comments were made in a semi-public setting during a cocktail reception and caused her significant discomfort.
Ngo further alleges that after she discussed the Ojai incident with a colleague (whose identity has not yet been disclosed), she was subsequently excluded from three key talent-relations strategy meetings in March and April 2023 — meetings that she would normally have been expected to attend in her capacity as Senior Director of Talent Relations. Ngo alleges that this exclusion was retaliatory, intended to marginalize her professionally, and that it was directed or orchestrated by Hale.
3. Retaliation (Whitfield)
Darren Whitfield alleges that after he raised concerns about Hale's treatment of female employees at a leadership team meeting on January 23, 2023, Hale retaliated against him by reassigning two of Whitfield's highest-profile production projects — identified by their internal codenames "Project Meridian" and "Project Halcyon," which had combined production budgets of approximately $187 million — to Senior Vice President of Production Cameron Briggs on February 6, 2023. Whitfield alleges that no legitimate business reason was provided for the reassignment, that the reassignment significantly diminished his responsibilities and professional standing, and that it was motivated by Hale's displeasure with Whitfield's advocacy on behalf of female colleagues. Whitfield further alleges that Hale made a comment to him in a private meeting on or about February 8, 2023 to the effect of, "You need to decide whose side you're on."
F. Prior Complaint History
In the course of the initial intake, Victor Gallegos confirmed to Fiona Blackwood that a prior informal complaint was made against Marcus Hale in July 2021 by Serena Whitcomb, a former Executive Assistant to Hale who was employed by APS from April 2019 through September 2021. Whitcomb alleged that Hale made inappropriate comments to her, the specific nature and content of which Gallegos did not document in writing at the time.
Gallegos states that the complaint was handled internally by Gallegos himself, without a formal investigation and without the engagement of outside counsel. Gallegos states that he issued a verbal counseling to Hale on August 2, 2021, advising Hale to maintain professional boundaries with subordinate employees. However, no written documentation of this verbal counseling was retained in Hale's personnel file, and no formal corrective action was taken. Gallegos did not escalate the Whitcomb complaint to AGMG's General Counsel or Chief People Officer, and the complaint was not reported to the Board or any Board committee.
The adequacy of APS's handling of the Whitcomb complaint is within the scope of this investigation, as it bears on the company's compliance with its obligation under FEHA to take reasonable steps to prevent and correct harassment, and on the question of whether the company had prior notice of a pattern of concerning behavior by Hale.
III. SCOPE OF INVESTIGATION
A. Matters Within Scope
The investigation will encompass the following matters:
1. All allegations of sexual harassment by Marcus Hale against Jenna Morales, as set forth in the April 18, 2023 hotline complaint (Meridian case reference MCS-1014-00001) and as further described in the demand letter from Sandra Reeves of Nakamura Reeves LLP dated April 20, 2023, including all incidents alleged to have occurred between approximately September 2022 and March 2023.
2. All allegations of sexual harassment by Marcus Hale against Claire Ngo, as set forth in Ngo's written complaint to Victor Gallegos dated April 24, 2023, including the alleged conduct at the Monarch Valley Resort in Ojai, California on February 17–18, 2023, and the subsequent exclusion from talent-relations strategy meetings in March and April 2023.
3. All allegations of retaliation by Marcus Hale against Darren Whitfield, as reported to Victor Gallegos on April 26, 2023, including the alleged reassignment of Project Meridian and Project Halcyon and any related retaliatory conduct.
4. Any additional allegations of harassment, discrimination, or retaliation by Marcus Hale that emerge during the course of witness interviews or document review. The investigation team will remain alert to evidence suggesting that Hale engaged in a broader pattern of misconduct beyond the specific incidents alleged by Morales, Ngo, and Whitfield. If additional allegations of significance emerge, Calderwood & Harkness will promptly notify the Board committees and, if necessary, seek authorization to expand the scope of the investigation.
5. The prior informal complaint against Hale by Serena Whitcomb in July 2021 and APS's handling of that complaint, including whether the company's response — verbal counseling without written documentation and without a formal investigation — was adequate under FEHA and company policy, and whether more robust corrective action at that time could have prevented subsequent misconduct.
6. A review of relevant company policies and an assessment of whether existing anti-harassment, anti-retaliation, and complaint-investigation procedures were followed in connection with the current complaints and the 2021 Whitcomb complaint, and whether those procedures are adequate under applicable law and industry best practices.
B. Governing Legal Standards
The investigation will be conducted with reference to the following legal standards and company policies:
California Fair Employment and Housing Act (FEHA): Cal. Gov. Code §§ 12940 et seq., including:
• Section 12940(j): Prohibition of harassment based on sex, including sexual harassment in the form of quid pro quo harassment and hostile work environment harassment;
• Section 12940(h): Prohibition of retaliation against employees who oppose practices prohibited by FEHA or who file complaints, testify, or assist in any proceeding under FEHA;
• Section 12940(k): Employer obligation to take all reasonable steps necessary to prevent discrimination and harassment from occurring, including the duty to conduct prompt, thorough, and fair investigations of complaints;
• Section 12940(j)(1): Individual liability for harassment;
• Applicable FEHA regulations promulgated by the California Civil Rights Department (formerly the Department of Fair Employment and Housing), including Cal. Code Regs. tit. 2, §§ 11019 et seq.
Employer Obligation to Investigate: Under FEHA and the governing regulations, an employer that receives a complaint of harassment or discrimination is obligated to conduct a fair, timely, and thorough investigation. The investigation must be conducted by qualified personnel, must be impartial, and must result in appropriate remedial action where allegations are substantiated. See Cotran v. Rollins Hudig Hall Int'l, Inc., 17 Cal.4th 93 (1998); Silva v. Lucky Stores, Inc., 65 Cal.App.4th 256 (1998).
AGMG Global Code of Conduct: Version 4.2, effective January 1, 2022, which sets forth the company's expectations for ethical conduct, including prohibitions on harassment, discrimination, and retaliation, and outlines reporting obligations for employees who witness or experience misconduct.
APS Employee Handbook, California Supplement: Revised March 15, 2022, including the following sections of particular relevance:
• Section 5.3: Anti-Harassment & Anti-Discrimination Policy, which prohibits all forms of harassment based on protected characteristics, including sexual harassment, and defines the company's expectations for appropriate workplace conduct;
• Section 5.7: Anti-Retaliation Policy, which prohibits adverse action against any employee who in good faith reports a concern, files a complaint, participates in an investigation, or exercises any right protected by law;
• Section 8.1: Complaint & Investigation Procedures, which outlines the procedures for reporting and investigating complaints of harassment, discrimination, and retaliation, including the use of the Meridian Compliance Solutions hotline and the escalation protocols for complaints involving senior executives.
AGMG Board Corporate Governance Guidelines: Section 12: Executive Conduct Standards, which sets forth the Board's expectations for the conduct of senior executives and the procedures for investigating allegations of misconduct against executive-level personnel.
C. Matters Outside Scope
The following matters are outside the scope of this investigation unless a nexus to the in-scope allegations is identified:
1. Employment performance assessments or compensation decisions unrelated to the allegations. The investigation will review performance evaluations and compensation decisions only insofar as they relate to the alleged harassment, retaliation, or discriminatory conduct. Routine business decisions that are unconnected to the allegations are not within scope.
2. Financial or accounting irregularities. Unless evidence of financial misconduct, misuse of corporate funds, or accounting irregularities emerges during the investigation in a manner connected to or arising from the in-scope allegations, the investigation will not extend to such matters. In the event that such evidence does emerge, Calderwood & Harkness will promptly notify the Board committees and seek authorization to expand the scope of the investigation or to refer the matter to appropriate specialists.
3. Claims or matters pending before any government agency or court. As of the date of this memorandum, no government agency charge or civil action has been filed in connection with the allegations. This investigation is an internal fact-finding exercise and does not constitute legal representation of any individual employee, including the complainants or the subject. Calderwood & Harkness represents AGMG and does not serve as counsel to any individual in connection with any potential government proceeding or litigation.
IV. INVESTIGATION METHODOLOGY
A. Witness Interviews
Calderwood & Harkness anticipates conducting interviews of approximately 25 to 30 individuals in connection with the investigation. These individuals fall into the following categories:
Complainants: The investigation team will conduct initial interviews of each of the three complainants — Jenna Morales, Claire Ngo, and Darren Whitfield — to obtain detailed accounts of their respective allegations, identify supporting witnesses and documents, and understand the timeline of events from each complainant's perspective. Follow-up interviews may be conducted as needed based on information gathered during the document review and other witness interviews.
Subject: Marcus Hale will be interviewed regarding each of the allegations. Hale's interview will be coordinated with his personal counsel, Graham Thornfield of Thornfield & Associates LLP, in accordance with the protocol described in Section VII.A below. Thornfield will be permitted to attend the interview and to consult privately with Hale during breaks; however, Calderwood & Harkness attorneys will conduct all questioning. Hale will also be afforded the opportunity to provide a written position statement, either in advance of or following his interview. Bernard Crawford will participate in the Hale interview alongside Devon Archer.
Current Employees: The investigation team will interview members of Hale's direct-report Senior Vice President team and other current APS employees identified through document review or witness referrals as having potentially relevant information. This category includes, but is not limited to, Cameron Briggs, SVP of Production, who received the two production projects reassigned from Whitfield and who may have relevant knowledge regarding the circumstances of that reassignment. The investigation team will also seek to interview employees who may have witnessed specific incidents described by the complainants — for example, attendees at the February 3, 2023 company dinner and participants in the February 17–18, 2023 off-site retreat at the Monarch Valley Resort.
Former Employees: The investigation team will seek to interview former APS employees who may have relevant knowledge, including Serena Whitcomb, the former Executive Assistant to Hale who made the July 2021 informal complaint. Because Whitcomb is no longer employed by APS, her participation in the investigation will be voluntary. Calderwood & Harkness will contact Whitcomb and request her cooperation, explaining the nature and purpose of the investigation. If Whitcomb has retained counsel, communications will be directed through her counsel.
Third-Party Contractors: Production contractors and other third parties who worked on relevant projects or attended relevant events (such as the Vancouver production trip in October 2022) may be contacted for interviews to the extent they are identified as possessing relevant information. As with former employees, their participation will be voluntary.
HR/Compliance Personnel: The investigation team will interview Victor Gallegos, VP of Human Resources at APS, regarding his handling of the current complaints and the 2021 Whitcomb complaint; Patricia Sung, Chief People Officer of AGMG, regarding the escalation of the current complaints and AGMG's oversight of APS's HR function; and other HR and compliance personnel involved in complaint intake, hotline management, and policy administration. Ingrid Holt, Chief Compliance Officer of AGMG, may also be interviewed regarding the Meridian hotline process.
All interviews will be conducted by Calderwood & Harkness attorneys. The primary interviewers will be Devon Archer and Nadia Petrov, both of the Firm's Labor & Employment group. Bernard Crawford will participate in key interviews, including the interview of Marcus Hale and interviews of other particularly significant witnesses. Interviews will generally be conducted in person at Calderwood & Harkness's Los Angeles office (or, where necessary, at APS's Burbank headquarters in a private and secure setting), with videoconference interviews available for witnesses located outside the greater Los Angeles area.
All interviews will commence with the Upjohn/corporate Miranda admonition (described in greater detail in Section V below), which will advise each witness that:
(i) Calderwood & Harkness represents Aurelius Global Media Group PLC and not the individual witness;
(ii) The interview is protected by the attorney-client privilege, but that privilege belongs to the company, not to the individual;
(iii) The company may choose to waive or not to waive the privilege at its discretion, including by disclosing the contents of the interview to third parties;
(iv) The witness should not discuss the substance of the interview with other employees or third parties, other than with the witness's own personal counsel (if any); and
(v) The company will not tolerate any retaliation against the witness for participating in the investigation in good faith.
Interviews will be memorialized in privileged interview memoranda prepared by the conducting attorneys. These memoranda will be marked as privileged and confidential and will be maintained in the Firm's secure investigation file. Consistent with best practices, no interviews will be audio- or video-recorded absent express written authorization from the Board committees, as recording may chill witness candor and create additional discovery risks.
B. Document Collection and Review
Forensic Collection: Calderwood & Harkness has retained Linden Forensics Group Inc. ("Linden Forensics"), located at 201 Mission Street, Suite 1400, San Francisco, California 94105, to perform forensic collection and processing of electronic data from relevant custodians and data sources. Linden Forensics is engaged as an agent of counsel in order to preserve the attorney-client privilege and work-product protections applicable to the investigation. The engagement with Linden Forensics is effective as of May 8, 2023, and is governed by a separate engagement letter and confidentiality agreement.
Custodians: Nine initial custodians have been identified for data collection: Marcus Hale, Jenna Morales, Claire Ngo, Darren Whitfield, Victor Gallegos, and four additional Senior Vice President witnesses whose identities will be specified upon completion of the initial custodian assessment. Additional custodians may be added as the investigation progresses and as new relevant individuals are identified through witness interviews and document review.
Data Sources: The following data sources will be subject to collection:
• Company email accounts (Outlook/Exchange hosted on AGMG's enterprise Exchange environment);
• Meridian Solutions messages (APS uses Meridian Solutions as a primary internal messaging platform; both direct messages and relevant channel messages will be collected);
• Text messages (SMS and Westmark Software) from company-issued mobile devices, and, where available and with the consent of the custodian, from personal mobile devices used for work-related communications;
• Shared network drives and cloud storage repositories (including Aldermere Systems sites and shared folders) maintained by relevant departments, including development, production, talent relations, and human resources;
• HR information systems, including the company's HRIS platform (Ashbury & Co.), for records relating to the subject and the complainants.
Date Range: The collection will cover the period from January 1, 2019 (the commencement of Hale's tenure as President of APS) to the present. This date range is designed to capture the entirety of Hale's employment at APS, including the period of the 2021 Whitcomb complaint, to allow the investigation team to assess whether there is evidence of a broader pattern of conduct.
Processing: Following collection, Linden Forensics will de-duplicate the collected data and process it for loading into the document review platform. Search-term filtering (using keywords and Boolean search strings developed by the Calderwood & Harkness investigation team) and date-range filtering will be applied to reduce the overall collection to a manageable review population. The search terms will be designed to capture communications relating to the alleged incidents, the complainants, relevant events and locations (e.g., the Vancouver trip, the Ojai retreat, the February dinner), and terms indicative of harassment, retaliation, or related conduct. The search-term protocol will be documented and preserved for the record.
Document Review: Attorney review of the processed document population will be conducted by the Calderwood & Harkness investigation team using a secure, cloud-based document review platform. The review team will consist of Devon Archer, Nadia Petrov, and contract review attorneys engaged by the Firm for first-level review. A detailed document review protocol will be established separately, addressing the following:
• Coding taxonomy: documents will be coded as relevant, not relevant, privileged, or "hot" (i.e., documents of particular significance to the investigation);
• Privilege-logging procedures: documents identified as potentially privileged (attorney-client communications, work product, etc.) will be logged in accordance with applicable standards;
• Quality control: Devon Archer will conduct periodic quality-control checks of first-level review coding to ensure consistency and accuracy;
• Escalation protocols: documents flagged as "hot" or otherwise significant will be escalated promptly to Devon Archer and Bernard Crawford for review and assessment.
HR Records: Personnel files, performance reviews, compensation records, and prior complaint files for Marcus Hale and each of the three complainants (Morales, Ngo, and Whitfield) will be collected directly from Victor Gallegos, VP of Human Resources at APS, and Patricia Sung, Chief People Officer of AGMG. These records will be reviewed for evidence bearing on the allegations, including any prior disciplinary actions, documented complaints, performance issues, or other relevant events.
Policy Documents: The following policy documents will be collected and reviewed:
• AGMG Global Code of Conduct, Version 4.2, effective January 1, 2022;
• APS Employee Handbook, California Supplement, revised March 15, 2022, including all relevant anti-harassment, anti-discrimination, anti-retaliation, and complaint-investigation policies;
• AGMG Board Corporate Governance Guidelines, including Section 12 (Executive Conduct Standards);
• Any supplemental training materials relating to harassment prevention, including records of mandatory California sexual harassment prevention training (AB 1825/SB 1343) completed by Hale and the complainants;
• Acknowledgment forms signed by Hale confirming receipt and understanding of applicable policies.
C. Review of Company Policies and Procedures
In addition to the fact-finding investigation described above, Calderwood & Harkness will conduct an assessment of whether the existing anti-harassment, anti-retaliation, and complaint-investigation policies at APS and AGMG comply with FEHA requirements and reflect industry best practices for a company of AGMG's size and complexity. This assessment will include:
• A review of the substantive content of the applicable policies (APS Employee Handbook, Sections 5.3, 5.7, and 8.1, and the AGMG Global Code of Conduct) to determine whether they adequately describe prohibited conduct, reporting channels, investigation procedures, and anti-retaliation protections;
• An assessment of the adequacy of the company's harassment prevention training program, including whether training has been provided to all required employees (including supervisory employees) within the time periods mandated by California law;
• An assessment of the adequacy of the complaint intake and escalation process through the Meridian Compliance Solutions LLC hotline, including whether the process ensures timely and appropriate escalation of complaints involving senior executives;
• An assessment of the adequacy of APS's handling of the prior Whitcomb complaint in July 2021, including whether the decision to address the complaint through an informal verbal counseling — without a formal investigation, written documentation, or escalation to AGMG leadership — was consistent with the company's policies and legal obligations; and
• Recommendations, as appropriate, for policy or procedural enhancements to strengthen the company's compliance posture going forward.
V. PRIVILEGE FRAMEWORK
A. Attorney-Client Privilege and Work Product
The investigation is being conducted at the direction of the Board of Directors of AGMG, through its People & Culture Committee and Audit & Risk Committee, for the primary purpose of obtaining legal advice regarding the company's response to the allegations against Marcus Hale, the company's potential legal exposure, and the appropriate remedial actions. As such, the investigation and all work product generated in connection therewith are protected by the attorney-client privilege and the work-product doctrine under both federal and California law.
The following categories of materials are privileged:
• All communications between Calderwood & Harkness and AGMG (including the Board committees and Fiona Blackwood) relating to the investigation;
• All witness interview memoranda prepared by Calderwood & Harkness attorneys;
• All internal analysis, legal research, and legal memoranda prepared by Calderwood & Harkness in connection with the investigation;
• All drafts and final versions of the investigation report;
• All communications with and materials received from Linden Forensics Group Inc. in its capacity as agent of counsel; and
• All other documents and communications generated by or at the direction of Calderwood & Harkness in connection with the investigation.
The attorney-client privilege belongs to AGMG, the corporate client. No individual witness, officer, director, or employee — including the subject, Marcus Hale — holds or may independently waive the privilege. The decision to assert, maintain, or waive the privilege rests solely with AGMG, acting through its Board of Directors and the authorized Board committees.
Upjohn warnings (so named for Upjohn Co. v. United States, 449 U.S. 383 (1981)) will be administered at the commencement of each witness interview in order to make clear the scope and ownership of the privilege, the identity of the client, and the witness's obligations regarding confidentiality. The Upjohn warning script to be used in this investigation has been prepared by Calderwood & Harkness and is attached to the investigation team's internal procedures manual. The warning will be delivered orally and confirmed with a written acknowledgment signed by each witness prior to the commencement of substantive questioning.
B. Cross-Border Privilege Considerations
Because AGMG is incorporated in England and Wales and is listed on the London Stock Exchange, while the investigation concerns conduct that occurred primarily in the United States, privilege must be maintained under both US and UK law. The treatment of legal professional privilege in England and Wales differs in certain respects from the attorney-client privilege under US law, and care must be taken to ensure that the investigation's privilege protections are preserved in both jurisdictions.
Calderwood & Harkness is coordinating with Pendleton & Warwick LLP, located at 20 Fenchurch Street, 8th Floor, London EC3M 3BY, United Kingdom, which serves as AGMG's regular UK outside corporate counsel. The two firms will work together to establish a joint privilege protocol addressing the following issues:
• The holders of privilege in each jurisdiction and the mechanisms by which privilege is asserted and maintained;
• Waiver risks in each jurisdiction, including the circumstances under which voluntary disclosure of privileged materials to third parties (e.g., regulators, insurers, or auditors) may result in a waiver of privilege, and the availability of common-interest or joint-defense protections;
• Protocols for sharing privileged investigation materials between US and UK counsel, including the use of common-interest agreements and appropriate confidentiality safeguards;
• Considerations relating to potential regulatory or litigation proceedings in either jurisdiction, including the implications of the investigation for any potential disclosure obligations under UK law (e.g., the UK Equality Act 2010, Financial Conduct Authority regulations, or AIM Rules for Companies).
A separate cross-border privilege protocol memorandum will be prepared jointly by Calderwood & Harkness and Pendleton & Warwick and circulated to the Board committees for review. That memorandum will be completed on or about May 12, 2023.
C. Privilege Log and Safeguards
Calderwood & Harkness will maintain a detailed privilege log for any materials that are withheld from production on the grounds of attorney-client privilege or work-product protection. The privilege log will identify each withheld document by date, author, recipient(s), subject matter, and the basis for the privilege assertion, in accordance with applicable legal standards.
All investigation materials — including electronic documents, interview memoranda, legal analysis, and correspondence — will be stored on Calderwood & Harkness's secure document management systems. All materials will be marked with appropriate privilege designations (e.g., "PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT — PREPARED AT THE DIRECTION OF COUNSEL"). Physical copies of investigation materials, to the extent any are created, will be maintained in locked files at Calderwood & Harkness's Los Angeles office.
Access to investigation materials will be strictly limited to the members of the Calderwood & Harkness investigation team and to authorized recipients at AGMG, specifically the members of the People & Culture Committee, the members of the Audit & Risk Committee, and Fiona Blackwood in her capacity as General Counsel and Board liaison. No investigation materials will be shared with CEO Elliot Vane, other AGMG management personnel, or any third party without the express authorization of the Board committees.
VI. RECUSAL OF CEO ELLIOT VANE
In accordance with the joint resolution of the People & Culture Committee and the Audit & Risk Committee dated April 28, 2023, Chief Executive Officer Elliot Vane has been formally recused from any oversight of or involvement in the investigation. This recusal was deemed necessary and appropriate given the following considerations:
• Vane has a direct reporting relationship with Marcus Hale, who serves as President of APS and reports to Vane in the ordinary course of AGMG's management structure;
• Vane's involvement in the investigation or its oversight could give rise to actual or perceived conflicts of interest, including the potential for allegations that the investigation was influenced by management considerations rather than conducted independently;
• The recusal is consistent with best practices for Board-directed investigations of senior executives and serves to protect the integrity and credibility of the investigation process.
The recusal means that Vane will not receive any updates on the status or progress of the investigation, will not have access to any investigation materials (including witness lists, document review findings, or drafts of the investigation report), and will not participate in any Board committee deliberations regarding the investigation or its outcomes.
Any questions from Vane regarding the investigation should be directed to Fiona Blackwood, who will manage the information barrier between Vane and the investigation. Blackwood will exercise her professional judgment in responding to Vane's inquiries, providing only such information as is necessary for the continued operation of the business (e.g., confirming that Hale remains on administrative leave) while withholding all substantive information regarding the investigation's findings, progress, or anticipated outcomes.
VII. COORDINATION WITH EXTERNAL PARTIES
A. Personal Counsel for Marcus Hale
As noted above, Marcus Hale has retained Graham Thornfield of Thornfield & Associates LLP as his personal counsel in connection with this investigation. Calderwood & Harkness acknowledges Hale's right to personal legal representation and will respect that right throughout the investigation.
All substantive communications with Hale regarding the investigation will be directed through or with notice to Graham Thornfield. Calderwood & Harkness will not communicate directly with Hale regarding substantive matters without Thornfield's knowledge and consent. Administrative communications (e.g., scheduling logistics) may be directed to Hale directly, with copies to Thornfield.
With respect to Hale's interview, Calderwood & Harkness will arrange the interview through Thornfield, providing reasonable advance notice of the interview date, time, and location and a general description of the topics to be covered. Thornfield will be permitted to attend the interview and to consult privately with Hale during reasonable breaks. However, Calderwood & Harkness attorneys will conduct all questioning during the interview. Thornfield will not be permitted to direct Hale's answers, coach Hale during questioning, or interpose objections, except that Thornfield may advise Hale to decline to answer a specific question if answering would, in Thornfield's judgment, implicate Hale's Fifth Amendment privilege against self-incrimination or other personal legal rights.
Hale will be afforded the opportunity to submit a written position statement addressing the allegations, either in advance of or following his interview. Any such statement will be reviewed and considered by the investigation team as part of its factual findings and credibility assessment.
B. Counsel for Jenna Morales
Jenna Morales is represented by Sandra Reeves of Nakamura Reeves LLP, located at 515 South Flower Street, Suite 3600, Los Angeles, California 90071. Calderwood & Harkness will communicate with Reeves regarding the investigation scope, Morales's participation in the investigation, and any logistical matters relating to Morales's interview.
Calderwood & Harkness will acknowledge the April 20, 2023 demand letter from Nakamura Reeves LLP and confirm that AGMG has retained independent outside counsel to conduct a thorough and impartial investigation of the allegations set forth in the demand letter and the Meridian hotline complaint. Calderwood & Harkness will further confirm that a litigation hold has been implemented and that AGMG takes the allegations seriously and is committed to a prompt and fair investigation.
To the extent Morales wishes to participate in an interview, the interview will be scheduled in coordination with Reeves, who will be permitted to attend the interview and consult with Morales during breaks. Calderwood & Harkness attorneys will conduct all questioning. Morales will also be invited to provide any additional documentary evidence or written statements she wishes to be considered as part of the investigation.
C. Insurance Carriers
Prompt notice of potential claims arising from the allegations will be provided to the following insurance carriers:
Northbridge Mutual Insurance Co.: Notice will be provided under the Employment Practices Liability Insurance ("EPLI") Policy, Policy No. NM-EPLI-2023-00417. The policy period is January 1, 2023 through December 31, 2023. The policy provides a per-claim limit of $10 million, an aggregate limit of $25 million, and a self-insured retention of $500,000. The notice will describe the nature of the allegations, the complainants, the subject, and the status of the investigation.
Castlemaine Underwriters Ltd.: Notice will be provided under the Directors & Officers Liability Insurance ("D&O") Policy, Policy No. CU-DO-2023-11283, which provides tower coverage with an aggregate limit of $50 million. The notice will describe the circumstances of the investigation and the potential for individual and corporate claims arising from the underlying allegations.
Insurance notice will be coordinated through Kessler & Dunn Insurance Brokers Ltd., AGMG's insurance broker of record, to ensure that all applicable policies are identified and that notice requirements are satisfied in a timely manner. Target date for issuance of the notice letters is May 5, 2023.
D. External Auditor
Greystone Advisors LLP, AGMG's external auditor, will be notified of the investigation in connection with potential financial reporting implications. In particular, the Hale Employment Agreement (dated January 7, 2019) contains change-of-control and termination-for-cause provisions (Section 9.2(b)) that may bear on compensation accruals and disclosures in AGMG's financial statements. If the investigation results in a determination that Hale's employment should be terminated for cause, the financial treatment of severance obligations, equity awards, and bonus accruals may differ materially from the treatment that would apply in the event of a termination without cause or a resignation. Greystone Advisors will be notified so that these contingencies can be evaluated and, if necessary, disclosed in accordance with applicable accounting standards and the requirements of the AIM Rules for Companies.
The notification to Greystone Advisors will be coordinated by Fiona Blackwood and will be limited to such information as is necessary for audit and financial reporting purposes. Care will be taken to avoid unnecessary disclosure of privileged investigation materials to the auditor. Calderwood & Harkness will advise on the scope and content of any disclosure to Greystone Advisors.
E. UK Corporate Counsel
Pendleton & Warwick LLP will be kept informed as needed regarding UK corporate governance obligations and cross-border privilege matters. In particular, Pendleton & Warwick will advise on:
• Any disclosure obligations arising under the AIM Rules for Companies, the UK Corporate Governance Code (to the extent voluntarily adopted by AGMG), or other applicable UK regulatory requirements;
• The treatment of legal professional privilege under English law as it relates to the investigation materials;
• Any implications of the investigation for AGMG's obligations under the UK Equality Act 2010 or other UK employment legislation, to the extent applicable; and
• Any corporate governance considerations arising from the recusal of CEO Elliot Vane and the Board committees' oversight of the investigation.
Communications with Pendleton & Warwick will be conducted under the joint privilege protocol described in Section V.B above.
VIII. INTERIM PROTECTIVE MEASURES
The following interim protective measures have been implemented in connection with the investigation:
Administrative Leave. Marcus Hale was placed on paid administrative leave effective May 3, 2023. Hale's access to company email (Outlook/Exchange), the company's Meridian Solutions messaging platform, and all internal information systems has been suspended. These measures were implemented to mitigate the risk of ongoing contact with complainants or potential witnesses, document spoliation or destruction, retaliation against complainants or cooperating witnesses, and potential interference with the investigation. Hale will remain on paid administrative leave for the duration of the investigation unless the Board committees determine that an alternative arrangement is appropriate.
Anti-Retaliation Monitoring. Victor Gallegos and the APS Human Resources team have been directed to monitor for any retaliatory conduct directed at the three complainants (Morales, Ngo, and Whitfield) or at any other employees who cooperate with the investigation. Any reports or indications of retaliation are to be immediately escalated to Calderwood & Harkness and to the Board committees through Fiona Blackwood. The investigation team has emphasized to Gallegos the critical importance of this monitoring function and the company's legal obligation under FEHA to protect complainants and witnesses from retaliation.
Litigation Hold. A litigation hold notice was issued on May 2, 2023, directed to all relevant custodians and departments at APS and AGMG. The litigation hold requires the preservation of all documents, electronic communications (including email, Meridian Solutions messages, and text messages), HR records, and other materials relating to the allegations and the investigation, covering the period from January 1, 2019 to the present. The litigation hold notice was prepared by Calderwood & Harkness and distributed by Fiona Blackwood through AGMG's legal department. Custodians are required to acknowledge receipt of the litigation hold notice in writing. Calderwood & Harkness will monitor compliance with the litigation hold throughout the course of the investigation.
IX. STAFFING
The Calderwood & Harkness investigation team will be staffed as follows:
Bernard Crawford — Responsible Partner, Labor & Employment, Calderwood & Harkness LLP. Mr. Crawford will serve as the overall investigation lead and the primary point of contact for the Board committees (through Fiona Blackwood). Mr. Crawford will participate in key witness interviews, including the interview of Marcus Hale, and will oversee the preparation and delivery of the final investigation report. Mr. Crawford has over 25 years of experience conducting sensitive workplace investigations for public and private companies, including multiple Board-directed investigations involving senior executive misconduct. Hourly rate: $1,350.
Renata Vasquez — Billing Partner, Labor & Employment, Calderwood & Harkness LLP. Ms. Vasquez will be available for consultation on complex legal issues arising during the investigation, including FEHA compliance, privilege questions, and remedial action considerations. Hourly rate: $1,275.
Devon Archer — Lead Associate, Labor & Employment, Calderwood & Harkness LLP. Mr. Archer will handle day-to-day investigation management, including coordinating witness interviews, supervising document review, conducting legal research, and drafting the investigation report. Mr. Archer will serve as primary interviewer for the majority of witness interviews. Hourly rate: $875.
Nadia Petrov — Working Associate, Labor & Employment, Calderwood & Harkness LLP. Ms. Petrov will assist with witness interviews, conduct document review, perform legal research, and provide analytical support throughout the investigation. Hourly rate: $725.
Contract Review Attorneys — Contract review attorneys will be engaged for first-level document review of the processed electronic data collection. Contract reviewers will be selected from Calderwood & Harkness's vetted panel of experienced document review attorneys and will execute confidentiality agreements prior to commencing work. Hourly rate: $480.
Paralegals — Paralegals will be utilized as needed for administrative and logistical support, including coordination of interview scheduling, management of the document review platform, privilege log maintenance, and preparation of the final report and appendices. Hourly rate: $415.
Calderwood & Harkness's Los Angeles office, located at 1999 Avenue of the Stars, Suite 2800, Los Angeles, California 90067, will serve as the primary base for investigation activities given its proximity to the APS headquarters in Burbank. Witness interviews will be conducted at the Firm's Los Angeles office unless an alternative location is more appropriate under the circumstances, and the Firm's secure conference facilities will be used for all in-person investigative activities.