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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): October 6, 2023
AMC
ENTERTAINMENT HOLDINGS, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware |
|
001-33892 |
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26-0303916 |
(State
or Other Jurisdiction of |
|
(Commission
File Number) |
|
(I.R.S. Employer Identification |
Incorporation) |
|
|
|
Number) |
One AMC Way
11500 Ash Street, Leawood, KS 66211
(Address of Principal Executive Offices, including
Zip Code)
(913) 213-2000
(Registrant’s Telephone Number, including
Area Code)
Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Title
of each class |
|
Trading
Symbol |
|
Name
of each exchange on which registered |
Class A common stock |
|
AMC |
|
New York Stock Exchange |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ¨
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 8.01 Other Events
As previously reported, on
May 21, 2018, a stockholder derivative complaint, captioned Gantulga v. Aron, et al., Case No. 1:18-cv-02262-JAR-TJJ,
was filed in the U.S. District Court for the District of Kansas, transferred to the U.S. District Court for the Southern District of New
York, and re-captioned Gantulga v. Aron, et al., Case No. 1:18-cv-10007-ALC (the “Gantulga Action”). On
October 2, 2019, a stockholder derivative complaint, captioned Kenna v. Aron, et al., Case No. 1:19-cv-09148-ALC (the
“Kenna Action”), was filed in the U.S. District Court for the Southern District of New York. On March 20, 2020,
a stockholder derivative complaint, captioned Manuel v. Aron, et al., Case No. 1:20-cv-02456-ALC (the “Manuel
Action”), was filed in the U.S. District Court for the Southern District of New York. On April 7, 2020, a stockholder derivative
complaint, captioned Dinkevich v. Aron, et al., Case No. 1:20-cv-02870-ALC (the “Dinkevich Action”), was
filed in the U.S. District Court for the Southern District of New York. On September 23, 2021, a stockholder derivative complaint,
captioned Lyon v. Aron, et al., Case No. 1:21-cv-07940-ALC (the “Lyon Action”), was filed in the U.S. District
Court for the Southern District of New York. On March 21, 2023, the Court entered an Opinion and Order granting defendants’
motion to dismiss the Lyon Action. Specifically, the Court dismissed Plaintiff Lyon’s federal law claims and declined to
exercise supplemental jurisdiction over his remaining state law claims. Plaintiff Lyon contends that he was preparing to re-file a complaint
based on his state law claims in the Delaware Court of Chancery.
On June 14, 2023, the
parties to the Gantulga, Kenna, Manuel, Dinkevich, and Lyon Actions entered into a Stipulation of Settlement
(the “Stipulation”) to resolve those actions. On October 6, 2023, the Court preliminarily approved the proposed settlement
as being fair, reasonable, and adequate, and scheduled a telephonic hearing for December 18, 2023 at 11:00 a.m. eastern time,
to, among other things, consider whether to approve the proposed settlement.
Additional information concerning
the terms of the proposed settlement, the December 18, 2023 hearing, and the requirements for making any objections to the proposed
settlement can be found in the Stipulation and the Notice of Pendency and Proposed Settlement of Stockholder Derivative Matters, which
are attached hereto as Exhibits 99.1, 99.2, and available on the Company’s website, at https://investor.amctheatres.com/stock-information/Tax-Info/default.aspx.
Item 9.01 Financial Statements and Exhibits
| 104 | Cover Page Interactive Data File – The cover page interactive data file does not appear
in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
Date: October 16, 2023 |
AMC ENTERTAINMENT HOLDINGS, INC. |
|
|
|
|
By: |
/s/ Kevin M. Connor |
|
|
Name: Kevin M. Connor
Title: Senior Vice President, General
Counsel and Secretary |
Exhibit 99.1
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
NARANBOLD GANTULGA, derivatively
on behalf of AMC ENTERTAINMENT HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG R. RAMSEY, CHRIS
A. COX, LINCOLN ZHANG, JACK Q. GAO, MAOJUN ZENG, ANTHONY J. SAICH, LLOYD HILL, GARY F. LOCKE, HOWARD W. KOCH, JR., KATHLEEN M. PAWLUS,
and DALIAN WANDA GROUP CO.,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS, INC.,
Nominal
Defendant.
|
Case No. 1:18-cv-10007-ALC
|
[additional
caption on next page]
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
|
|
JENNIFER
KENNA, derivatively on behalf of AMC ENTERTAINMENT HOLDINGS, INC., |
Case
No. 1:19-cv-09148-ALC |
|
|
|
|
Plaintiff, |
|
|
|
v. |
|
|
|
ADAM
M. ARON, CRAIG R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q. GAO, MAOJUN ZENG, ANTHONY J. SAICH, LLOYD HILL, GARY F. LOCKE, HOWARD
W. KOCH, JR., KATHLEEN M. PAWLUS, and DALIAN WANDA GROUP CO., |
|
|
|
Defendants, |
|
|
|
and |
|
|
|
AMC
ENTERTAINMENT HOLDINGS, INC., |
|
|
|
Nominal
Defendant. |
|
|
|
[additional
caption on next page]
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
LORRA MANUEL, Derivatively on Behalf
of Nominal Defendant AMC ENTERTAINMENT HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG R. RAMSEY, CHRIS
A. COX, LINCOLN ZHANG, JACK Q. GAO, LLOYD L. HILL, HOWARD W. KOCH, JR., GARY F. LOCKE, KATHLEEN M. PAWLUS, ANTHONY J. SAICH, and
MAOJUN ZENG,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS, INC.,
Nominal
Defendant.
|
Case No. 1:20-cv-02456-ALC
|
[additional
caption on next page]
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
DAVID DINKEVICH and ANN CARTER,
derivatively on behalf of AMC ENTERTAINMENT HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG R. RAMSEY, CHRIS
A. COX, LINCOLN ZHANG, JACK Q. GAO, LLOYD L. HILL, HOWARD W. KOCH, JR., GARY F. LOCKE, KATHLEEN M. PAWLUS, ANTHONY J. SAICH, and
MAOJUN ZENG,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS, INC.,
Nominal
Defendant.
|
Case No. 1:20-cv-02870-ALC
|
STIPULATION OF SETTLEMENT
This Stipulation of Settlement, dated as of June 14, 2023 (the “Stipulation”),
is made and entered into by and among: (1) Plaintiff Naranbold Gantulga in the action captioned Gantulga v. Aron, et al., Case
No. 1:18-cv-10007-ALC (S.D.N.Y.) (the “Gantulga Action”), Plaintiff Jennifer Kenna in the action captioned Kenna
v. Aron, et al., Case No. 1:19-cv-09148-ALC (S.D.N.Y.) (the “Kenna Action”), Plaintiff Lorra Manuel in the action
captioned Manuel v. Aron, et al., Case No. 1:20-cv-02456-ALC (S.D.N.Y.) (the “Manuel Action”), Plaintiffs David
Dinkevich and Ann Carter in the action captioned Dinkevich, et al. v. Aron, et al., Case No. 1:20-cv-02870-ALC (S.D.N.Y.) (the
“Dinkevich Action”), and Plaintiff John R. Lyon (together with Plaintiffs Gantulga, Kenna, Manuel, Dinkevich, and
Carter, “Plaintiffs”) who filed the action captioned Lyon
v. Aron, et al., Case No. 1:21-cv-07940-ALC
(S.D.N.Y.) (the “Lyon Action”); (2) Defendants Adam M. Aron, Craig R. Ramsey, Chris A. Cox, Lincoln Zhang, Jack Q.
Gao, Maojun Zeng, Anthony J. Saich, Lloyd L. Hill, Gary F. Locke, Howard W. Koch, Jr., Kathleen M. Pawlus, Phillip Lader, Lee E. Wittlinger,
and Adam J. Sussman (collectively, the “Individual Defendants”); and (3) Nominal Defendant AMC Entertainment Holdings, Inc.
(“AMC” or the “Company,” and together with the Individual Defendants, “Defendants” and each a “Defendant,”
and together with Plaintiffs, the “Parties” and each a “Party”), by and through their respective undersigned
counsel.1
This Stipulation sets forth
all of the terms and conditions of the settlement and resolution of the Derivative Matters (as defined herein), and fully, finally, and
forever resolves, discharges, and settles any and all Released Claims (as defined herein) against the Released Persons (as defined herein),
upon approval by the United States District Court for the Southern District of New York (the “Court”) and subject to the
terms and conditions set forth herein.
All terms with initial capitalization not otherwise defined herein
shall have the meanings ascribed to them in Section 1 of this Stipulation.
1
Dalian Wanda Group Co. (“Wanda”) was named as a defendant in the Gantulga and Kenna
Actions, but was not served with process and did not become a party to either action. See, e.g., Murphy Bros. v. Michetti
Pipe Stringing, Inc., 526 U.S. 344, 350 (1999) (“one becomes a party officially . . . only upon service of a summons or other
authority-asserting measure”). Therefore, Wanda is not a party to this Stipulation, but is nevertheless released pursuant to the
terms hereof.
RECITALS
WHEREAS:
Overview of the Derivative Matters
I. Gantulga
Action
A.
On May 21, 2018, Plaintiff Gantulga commenced the Gantulga Action in the United States District
Court for the District of Kansas on behalf of AMC against Defendants Aron, Ramsey, Cox, Zhang, Gao, Zeng, Saich, Hill, Locke, Koch, and
Pawlus, asserting claims for violations of Section 14(a) of the Securities and Exchange Act of 1934 (the “Exchange Act”),
breach of fiduciary duty, and unjust enrichment. The Gantulga Action alleges that making a demand on AMC’s Board of Directors
(the “Board”) to institute the claims pled in the Gantulga Action would have been futile. The defendants in the Gantulga
Action maintain that demand would not have been futile.
B.
On August 27, 2018, the defendants in the Gantulga Action filed a motion to dismiss or, in
the alternative, to transfer the Gantulga Action to the Court.
C.
On September 10, 2018, Plaintiff Gantulga opposed the defendants’ motion.
D.
On September 17, 2018, Plaintiff Gantulga filed an Amended Complaint that named Wanda as a defendant
and mooted the pending motion.
E.
On October 12, 2018, the parties filed a joint motion to transfer the Gantulga Action to
the Court.
F.
On October 15, 2018, the United States District Court for the District of Kansas granted the parties’
joint motion to transfer the Gantulga Action to the Court.
G.
On November 8, 2018, Plaintiff Gantulga and the defendants in the Gantulga Action filed a
stipulation to stay the Gantulga Action, given the pendency of a related,
putative securities class action captioned
Hawaii Structural Ironworkers Pension Trust Fund v. AMC Entertainment Holdings, Inc., et al., Case No. 1:18-cv-00299-AJN (S.D.N.Y.)
(the “Securities Class Action”), which the Court granted on December 17, 2018.
H.
On March 30, 2020, the Court entered a stipulated protective order to govern discovery in the Gantulga
Action.
I.
On January 10, 2022, pursuant to the terms of the order staying the Gantulga Action, Plaintiff
Gantulga provided written notice to the defendants in the Gantulga Action that the stay would be lifted as of February 9, 2022.
J.
On April 10, 2022, the Gantulga Action was reassigned from Judge Alison J. Nathan to Judge
Andrew L. Carter, Jr.
II. Kenna
Action
K.
On October 2, 2019, Plaintiff Kenna commenced the Kenna Action in the Court on behalf of
AMC against Defendants Aron, Ramsey, Cox, Zhang, Gao, Zeng, Saich, Hill, Locke, Koch, and Pawlus, and Wanda, asserting claims for violations
of Section 14(a) of the Exchange Act, breach of fiduciary duty, and unjust enrichment. The Kenna Action alleges that making a
demand on the Board to institute the claims pled in the Kenna Action would have been futile. The defendants in the Kenna Action
maintain that demand would not have been futile.
L.
On October 15, 2019, Plaintiff Kenna filed a stipulation to stay the Kenna Action, given
the pendency of the Securities Class Action, which the Court granted on October 17, 2019.
M.
On March 26, 2020,
the Court entered a stipulated protective order to govern discovery in the Kenna Action.
N.
On April 20, 2020, Plaintiff Kenna filed an Amended Complaint asserting claims for violations of
Sections 10(b), 14(a), and 21D of the Exchange Act, breach of fiduciary duty, and unjust enrichment. The Amended Complaint included information
gleaned from documents the Company produced to Plaintiff Kenna pursuant to the order staying the Kenna Action.
O.
On January 10, 2022, pursuant to the terms of the order staying the Kenna Action, Plaintiff
Kenna provided written notice to the defendants in the Kenna Action that the stay would be lifted as of February 9, 2022.
P.
On April 10, 2022, the Kenna Action was reassigned from Judge Alison J. Nathan to Judge Andrew
L. Carter, Jr.
III. Manuel
Action
Q.
On March 20, 2020, Plaintiff Manuel commenced the Manuel Action in the Court on behalf of
AMC against Defendants Aron, Ramsey, Cox, Zhang, Gao, Zeng, Saich, Hill, Locke, Koch, and Pawlus, asserting claims for violations of
Sections 10(b), 21D, and 29(B) of the Exchange Act and breach of fiduciary duty. The Manuel Action alleges that making a demand
on the Board to institute the claims pled in the Manuel Action would have been futile. The defendants in the Manuel Action
maintain that demand would not have been futile.
R.
On May 12, 2020, Plaintiff Manuel and defendants in the Manuel Action filed a stipulation
to stay the Manuel Action, given the pendency of the Securities Class Action, which the Court granted on May 18, 2020. On June
25, 2020, the Court entered a stipulated protective order to govern discovery in the Manuel Action.
S.
On April 7, 2022, the Manuel Action was reassigned from Judge Alison J. Nathan to Judge Andrew
L. Carter, Jr.
IV. Dinkevich
Action
T.
On October 14, 2019, Plaintiff Dinkevich made a demand on AMC pursuant to 8 Del. C. §
220 to inspect certain of AMC’s non-public books and records (the “Dinkevich 220 Demand”).
U.
On March 27, 2020, AMC produced certain books and records to Plaintiff Dinkevich in response to
the Dinkevich 220 Demand. Plaintiff Dinkevich’s counsel, who also represents Plaintiff Carter, requested, and AMC agreed, that
Plaintiff Carter could also review the books and records produced in response to the Dinkevich 220 Demand.
V.
On April 7, 2020, Plaintiffs Dinkevich and Carter commenced the Dinkevich Action in the Court
on behalf of AMC against Defendants Aron, Ramsey, Cox, Zhang, Gao, Zeng, Saich, Hill, Locke, Koch, and Pawlus, asserting claims for violations
of Sections 10(b), 21D, and 29(B) of the Exchange Act, breach of fiduciary duty, and unjust enrichment. The Dinkevich Action,
which incorporated the non-public records produced by AMC in response to the Dinkevich 220 Demand, alleges that making a demand on the
Board to institute the claims pled in the Dinkevich Action would have been futile. The defendants in the Dinkevich Action
maintain that demand would not have been futile.
W.
On June 17, 2020, Plaintiffs Dinkevich and Carter and the defendants in the Dinkevich Action
filed a stipulation to stay the Dinkevich Action, given the pendency of the Securities Class Action, which the Court granted on
June 25, 2020.
X.
On August 4, 2020, the Court entered a stipulated protective order to govern discovery in the Dinkevich
Action.
Y.
On December 8, 2021, Plaintiffs Dinkevich and Carter provided written notice to defendants of their
intention to lift the stay in the Dinkevich Action, and on January 7, 2022, filed a notice with the Court to lift the stay.
Z. On January
11, 2022, the Court lifted the stay of the Dinkevich Action.
AA. On
April 10, 2022, the Dinkevich Action was reassigned from Judge Alison J. Nathan to Judge Andrew L. Carter, Jr.
V. The
Lyon Litigation Demand and Lyon Action
BB. On
February 3, 2020, Plaintiff Lyon made a demand on AMC pursuant to 8 Del. C. § 220 to inspect certain of AMC’s non-public
books and records (the “Lyon 220 Demand”).
CC. On
July 15, 2020, Plaintiff Lyon made a litigation demand on the Board (the “Lyon Litigation Demand”).
DD. On
September 30, 2020, Plaintiff Lyon was informed that the Board voted unanimously not to pursue the claims in the Lyon Litigation Demand
at that time.
EE. Between
October 12, 2020 and September 8, 2021, Plaintiff Lyon and counsel for a committee of the Board (“Committee”) exchanged correspondence
concerning developments in the Securities Class Action and the Board and Committee’s continued position not to pursue the claims
in the Lyon Litigation Demand.
FF. On
September 23, 2021, Plaintiff Lyon commenced the Lyon Action in this Court on behalf of AMC against Defendants Aron, Ramsey, Cox,
Zhang, Gao, Hill, Locke, Koch, Pawlus, Saich, Zeng, Lader, Wittlinger, and Sussman, asserting claims for contribution and indemnification
under Sections 10(b) and 21D of the Exchange Act, breach of fiduciary duty, waste of corporate assets, and unjust enrichment/constructive
trust. The Lyon Action alleged that the Board wrongfully refused the Lyon Litigation Demand. The defendants in the Lyon Action
maintained that the Board properly refused the Lyon Litigation Demand.
GG. On
January 14, 2022, the defendants in the Lyon Action filed a motion to dismiss the Lyon Action.
HH. On
April 7, 2022, the Lyon Action was reassigned from Judge Alison J. Nathan to Judge Andrew L. Carter, Jr.
II.
On March 21, 2023, the Court entered an Opinion and Order granting defendants’ motion to dismiss as to Plaintiff
Lyon’s contribution and indemnification claims under Sections 10(b) and 21D of the Exchange Act, which formed the basis for the
Court’s subject matter jurisdiction, because the settlement of the related Securities Class Action had received final approval
without a finding of liability. The Court further declined to exercise supplemental jurisdiction over Plaintiff Lyon’s remaining
state law claims, and thus did not reach the merits of those claims.
JJ. Plaintiff
Lyon was preparing to re-file a complaint based on his state law claims in the Delaware Court of Chancery at the time this Stipulation
was executed.
Settlement Negotiations
KK. On
November 18, 2020 and November 19, 2020, certain parties to the Derivative Matters participated in a mediation (the “Mediation”)
before David Geronemus, Esq. of JAMS (the “Mediator”). Prior to the Mediation, certain Plaintiffs submitted mediation statements
and settlement demands to the Mediator. The Mediation, however, did not result in a settlement. Thereafter, the Parties continued to
negotiate at arm’s-length and with the Mediator’s assistance, including by Plaintiffs sending a global settlement demand
to the Defendants on October 27, 2021 that included a comprehensive corporate governance reforms proposal. Ultimately, on June 21, 2022,
the Parties reached an agreement in principle on the material terms of the Settlement, including the corporate governance reforms AMC
would adopt as consideration for the Settlement, set forth in full in Exhibit A hereto (the “Reforms”).
LL. Only
after the Parties agreed in principle to the material terms of the proposed Settlement did they separately negotiate, at arm’s
length, and with substantial assistance
from the Mediator, the attorneys’ fees
and expenses that would be payable to Plaintiffs’ Counsel in recognition of the substantial benefits achieved for the benefit of
AMC and its stockholders through the Settlement. Following negotiations spanning more than six months, on January 10, 2023, the Parties
agreed to a sum of one million dollars ($1,000,000.00) in attorneys’ fees and expenses to be paid to Plaintiffs’ Counsel
by AMC’s director’s and officer’s insurance carriers, subject to Court approval.
Plaintiffs’ Claims and the Benefits
of the Settlement
MM Plaintiffs
believe that their derivative claims have merit, and Plaintiffs’ entry into this Stipulation is not intended to be and shall not
be construed as an admission or concession concerning the relative strength or merit of the claims alleged in the Derivative Matters.
However, Plaintiffs and Plaintiffs’ Counsel recognize and acknowledge the significant risk, expense, and length of continued proceedings
necessary to prosecute the derivative claims against the Individual Defendants through trial(s) and possible appeal(s). Plaintiffs’
Counsel also have taken into account the uncertain outcome and the risk of any litigation, especially in complex cases, like the Derivative
Matters, as well as the difficulties, risks, and delays inherent in such litigation. Plaintiffs’ Counsel are also mindful of the
inherent problems of establishing standing in derivative litigation, and the possible defenses to the claims alleged in the Derivative
Matters.
NN. Plaintiffs’
Counsel have conducted extensive investigations and analyses regarding the claims alleged in the Derivative Matters, including, inter
alia: (i) reviewing and analyzing AMC press releases, public statements, and filings with the United States Securities and Exchange
Commission (the “SEC”); (ii) preparing and finalizing Section 220 inspection demands, negotiating production of non-public
materials pursuant to Section 220, and reviewing and analyzing non-public documents produced in response to Section 220 inspection demands
and/or by agreement of the Parties; (iii) reviewing and analyzing securities analysts’ reports and
advisories and media reports about the Company;
(iv) reviewing and analyzing the pleadings in the Securities Class Action; (v) researching the applicable law with respect to the claims
alleged and the potential defenses thereto; (vi) preparing and finalizing the Lyon Litigation Demand, the initial complaints in the Derivative
Actions (as defined herein), and the amended complaints in the Gantulga and Kenna Actions; (vii) researching and evaluating
factual and legal issues relevant to the claims; (viii) fully briefing a motion to dismiss in the Lyon Action; (ix) briefing a
motion to dismiss or in the alternative to transfer the Gantulga Action; (x) conducting damages analyses and research into AMC’s
corporate governance structure in connection with settlement efforts; (xi) preparing comprehensive written settlement demands and modified
demands over the course of the Parties’ settlement negotiations; (xii) preparing mediation statements; (xiii) participating in
the two-day Mediation and multiple follow-on settlement negotiations; (xiv) engaging in settlement negotiations with Defendants’
Counsel directly and through the Mediator with numerous emails and conference calls regarding the specific facts, and perceived strengths
and weaknesses of the Derivative Matters, and other issues in an effort to facilitate negotiations; and (xv) negotiating the material
terms of the Settlement, and negotiating and drafting this Stipulation.
OO. Based
on Plaintiffs’ Counsel’s thorough review and analysis of the relevant facts, allegations, defenses, and controlling legal
principles, Plaintiffs’ Counsel believe that the Settlement set forth in this Stipulation is fair, reasonable, and adequate, and
confers substantial benefits upon AMC and its stockholders. Based upon Plaintiffs’ Counsel’s evaluation, Plaintiffs have
determined that the Settlement is in the best interests of AMC and its stockholders, and have agreed to settle the Derivative Matters
upon the terms of this Stipulation.
Defendants’ Denial of Wrongdoing
and Liability
PP. Defendants
have denied, and continue to deny, all allegations of wrongdoing, fault, liability, or damages with respect to the Released Plaintiff
Claims, including,
but not limited to, any allegations that Defendants
have committed any violations of the Exchange Act or other law, have breached any duty owed to AMC or its stockholders, have acted improperly
in any way, have any liability or owe any damages of any kind to AMC or its stockholders, and/or were unjustly enriched. Defendants maintain
that their conduct was at all times proper, in the best interests of AMC and its stockholders, and in compliance with applicable law.
Defendants also deny that AMC or its stockholders were harmed by any conduct of Defendants that was alleged or could have been alleged
in the Derivative Matters. Each of the Individual Defendants asserts that, at all relevant times, he or she acted in good faith and in
a manner believed to be in the best interests of AMC and all of its stockholders.
QQ. Nonetheless,
Defendants are entering into this Stipulation and the Settlement solely to eliminate the burden, expense, and uncertainties inherent
in further litigation, and without admitting the validity of any allegations made in the Derivative Matters or any liability with respect
thereto, having concluded that it is desirable for the Derivative Matters to be fully and finally settled and dismissed in the manner
and upon the terms and conditions set forth in this Stipulation. The Defendants have, therefore, determined that it is in the best interests
of AMC and its stockholders for the Derivative Matters to be settled in the manner and upon the terms and conditions set forth in this
Stipulation. For the avoidance of doubt, nothing in this Stipulation or the Settlement shall be construed as an admission by Defendants
of any wrongdoing, fault, liability, or damages whatsoever.
NOW, THEREFORE, IT IS
HEREBY STIPULATED AND AGREED, by and among the Parties, by and through their respective undersigned counsel and subject to the approval
of the Court, that, in consideration for the benefits flowing to the Parties from the Settlement, (i) all Released Plaintiff Claims shall
be completely, fully, finally, and forever compromised, settled,
released, discharged, extinguished, and dismissed
with prejudice as against all Released Defendant Persons, and (ii) all Released Defendant Claims shall be completely, fully, finally,
and forever compromised, settled, released, discharged, extinguished, and dismissed with prejudice as against all Released Plaintiff
Persons, upon and subject to the terms and conditions set forth below.
1. DEFINITIONS
As used in this Stipulation, and all exhibits attached hereto
and made a part hereof, the following capitalized terms have the meanings specified below:
1.1 “Defendants’
Counsel” means Weil, Gotshal & Manges LLP.
1.2 “Derivative
Actions” means the Gantulga Action, the Kenna Action, the Manuel Action, the Dinkevich Action, and
the Lyon Action.
1.3 “Derivative
Matters” means the Derivative Actions together with the Lyon Litigation Demand.
1.4 “Effective
Date” means the first date by which all of the events and conditions specified in Paragraph 8.1 of this Stipulation have been met
and have occurred or have been waived in writing.
1.5 “Fee
and Expense Award” means the sum of one million dollars ($1,000,000.00) in attorneys’ fees and expenses to be paid to Plaintiffs’
Counsel by AMC’s director’s and officer’s insurance carriers, as detailed in Section 4 of this Stipulation, subject
to approval by the Court, in full satisfaction of any and all claims for attorneys’ fees or expenses that have been, could be,
or could have been asserted by Plaintiffs’ Counsel or any other counsel in connection with the Derivative Matters.
1.6 “Final”
means, with respect to the Order and Final Judgment or any other Court order or judgment, that one of the following has occurred: (i)
the time for the filing or noticing of any motion for reconsideration, reargument, appeal, or review of the order or judgment has expired
without any such filing or notice; or (ii) the
order or judgment has been affirmed in all material respects on an appeal or after reconsideration or other review and is no longer subject
to review upon appeal, reconsideration, or other review, and the time for any petition for reconsideration, reargument, appeal, or review
of such order or judgment (or any order affirming it) has expired; provided, however, that any disputes, appeals, or proceedings relating
solely to the amount, payment, or allocation of attorneys’ fees and expenses shall have no effect on finality for purposes of determining
the date on which the Order and Final Judgment becomes Final, and shall not prevent, limit, or otherwise affect the Order and Final Judgment.
1.7 “Notice”
means the Notice of Pendency and Proposed Settlement of Stockholder Derivative Matters, Settlement Hearing, and Right to Appear, substantially
in the form of Exhibit C attached hereto.
1.8 “Notice
Costs” means all costs, fees, and expenses related to providing Notice of the Settlement to Company stockholders.
1.9 “Order
and Final Judgment” means the Order and Final Judgment to be entered by the Court in the Derivative Actions, substantially in the
form of Exhibit D attached hereto.
1.10 “Person”
means any natural person, individual, corporation, professional corporation, partnership, limited partnership, limited liability partnership,
limited liability company, association, affiliate, joint venture, joint stock company, investment fund, estate, legal representative,
trust, unincorporated association, entity, government, or any political subdivision or agency thereof, or any other type of business
or legal entity, and any spouse, heir, legatee, executor, administrator, predecessor, successor, representative, or assign of any of
the foregoing.
1.11 “Plaintiffs’
Counsel” means The Brown Law Firm, P.C., The Rosen Law Firm, P.A., Walters Renwick Richards Skeens & Vaughan, P.C., Schubert
Jonckheer & Kolbe LLP,
Newman Ferrara LLP, Shuman, Glenn & Stecker,
Cohen Milstein Sellers & Toll PLLC, Kaskela Law LLC, and Kahn Swick & Foti, LLC.
1.12 “Reforms”
means the corporate governance reforms set forth in Exhibit A attached hereto.
1.13 “Released
Claims” means, collectively, the Released Plaintiff Claims and the Released Defendant Claims.
1.14 “Released
Defendant Claims” means any and all manner of claims, demands, rights, liabilities, losses, obligations, duties, damages, costs,
debts, expenses, interest, penalties, sanctions, fees, attorneys’ fees, actions, potential actions, causes of action, suits, agreements,
judgments, decrees, matters, counterclaims, offsets, issues, and controversies of any kind, nature, or description whatsoever, whether
accrued or unaccrued, disclosed or undisclosed, apparent or not apparent, foreseen or unforeseen, matured or not matured, suspected or
unsuspected, liquidated or not liquidated, fixed or contingent, whether based on state, local, federal, statutory, regulatory, common,
or other law or rule, including known claims and Unknown Claims, which any Defendant ever had, now has, or may have against any of the
Released Plaintiff Persons that arise out of, are based upon, or relate to the institution, prosecution, or settlement of the claims
asserted in the Derivative Matters. For the avoidance of doubt, the Released Defendant Claims shall not include any claims to enforce
this Stipulation or the Settlement.
1.15 “Released
Defendant Persons” means all persons and entities named as a defendant in the Derivative Actions or that could have been named
as a defendant in the Derivative Matters, including, without limitation, the Company’s past and present officers and directors,
as well as any and all of the respective current and former employers, parent entities, controlling persons, owners, members, co-investors,
lenders, principals, affiliates, or subsidiaries of any of the
foregoing, and each and all of the respective
past or present officers, directors, managers, partners, limited partners, general partners, stockholders, representatives, employees,
attorneys, financial or investment advisors, consultants, accountants, investment bankers, commercial bankers, agents, heirs, executors,
trustees, personal representatives, estates, administrators, predecessors, successors, assigns, insurers, and reinsurers of any of the
foregoing.
1.16 “Released
Persons” means Released Plaintiff Persons and Released Defendant Persons, collectively, and, each individually, is a “Released
Person.”
1.17 “Released
Plaintiff Claims” means any and all manner of claims, demands, rights, liabilities, losses, obligations, duties, damages, costs,
debts, expenses, interest, penalties, sanctions, fees, attorneys’ fees, actions, potential actions, causes of action, suits, agreements,
judgments, decrees, matters, counterclaims, offsets, issues, and controversies of any kind, nature, or description whatsoever, whether
accrued or unaccrued, disclosed or undisclosed, apparent or not apparent, foreseen or unforeseen, matured or not matured, suspected or
unsuspected, liquidated or not liquidated, fixed or contingent, whether based on state, local, federal, statutory, regulatory, common,
or other law or rule, including known claims and Unknown Claims, that (a) were asserted in the Derivative Matters, or (b) Plaintiffs
(individually or derivatively on behalf of AMC) or AMC ever had, now have, or hereafter can, shall, or may have that, in full or in part,
concern, relate to, arise out of, or are in any way connected to the claims, allegations, transactions, facts, circumstances, events,
acts, disclosures, statements, representations, omissions, or failures to act alleged, set forth, referred to, or involved in the Derivative
Matters. For the avoidance of doubt, the Released Plaintiff Claims shall not include any claims to enforce this Stipulation or the Settlement.
1.18 “Released
Plaintiff Persons” means Plaintiffs and any and all of their respective current and former employers, parent entities, controlling
persons, owners, members, principals, affiliates, or subsidiaries, and each and all of their respective past or present officers, directors,
managers, partners, limited partners, general partners, stockholders, representatives, employees, attorneys, financial or investment
advisors, consultants, accountants, investment bankers, commercial bankers, agents, heirs, executors, trustees, personal representatives,
estates, administrators, predecessors, successors, assigns, insurers, and reinsurers.
1.19 “Releases”
means the releases set forth in Paragraphs 5.2-5.3 of this Stipulation.
1.20 “Scheduling
Order” means the Order to be entered by the Court in the Derivative Actions, substantially in the form of Exhibit B attached hereto,
providing for, among other things, the scheduling of the Settlement Hearing, the dissemination of Notice of the Settlement to Company
stockholders, and an injunction against the prosecution of any of the Released Plaintiff Claims or Released Defendant Claims, pending
further Order of the Court.
1.21 “Settlement”
means the settlement and compromise between Plaintiffs and Defendants on the terms and conditions as set forth in this Stipulation.
1.22 “Settlement
Hearing” means the hearing set by the Court to consider, among other things: (i) the Settlement and final approval of the Settlement;
(ii) the joint request of the Parties that the Order and Final Judgment be entered; and (iii) any objections to any of the foregoing.
1.23 “Unknown
Claims” means any claims that a Party does not know or suspect to exist in his, her, or its favor at the time of the release of
such claims, which, if known by him, her, or it, might have affected his, her, or its decision(s) with respect to the Settlement. With
respect to any and all Released Plaintiff Claims and Released Defendant Claims, the Parties stipulate and agree that, upon the Effective
Date of the Settlement, the Parties shall expressly waive any and all
provisions, rights, and benefits conferred by
any law of any state or territory of the United States, or principle of common law or foreign law, which is similar, comparable, or equivalent
to California Civil Code §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.
The Parties acknowledge that the foregoing waiver
was separately bargained for and a key element of the Settlement. The Parties may hereafter discover facts in addition to or different
from those that they now know or believe to be true with respect to the Released Claims, but, upon the Effective Date, the Parties shall
be deemed to have, and by operation of the Order and Final Judgment shall have, fully, finally, and forever settled and released any
and all Released Claims known or unknown, suspected or unsuspected, contingent or non-contingent, accrued or unaccrued, which now exist,
heretofore have existed, or may in the future exist, upon any theory of law or equity, from the beginning of time through the date of
execution of this Stipulation, without regard to the subsequent discovery or existence of such different or additional facts.
2. SETTLEMENT CONSIDERATION
2.1 In
consideration for the full and final release, settlement, dismissal, and discharge of any and all of the Released Claims against the
Released Persons, the Parties have agreed that AMC is required to implement the Reforms set forth in Exhibit A attached hereto.
2.2 The
Company and the Individual Defendants acknowledge and agree that Plaintiffs’ efforts were a substantial factor in the Company’s
decision to adopt, implement, and maintain the Reforms, which confer a substantial benefit on the Company and its stockholders.
3. SCHEDULING ORDER
AND NOTICE
3.1 Promptly
after execution of this Stipulation, the Parties shall submit this Stipulation, together with its exhibits, to the Court, and shall jointly
apply for entry of the Scheduling Order, substantially in the form of Exhibit B attached hereto, requesting, among other things, the
scheduling of the Settlement Hearing, the dissemination of Notice of the Settlement to Company stockholders, and an injunction against
the prosecution of any of the Released Plaintiff Claims or Released Defendant Claims, pending further order of the Court.
3.2 AMC
shall undertake the administrative responsibility for providing the Notice to its stockholders, and will pay all Notice Costs (which
may be reimbursed by AMC’s directors’ and officers’ insurance carriers). The Parties agree to jointly seek the scheduling
of the Settlement Hearing to take place no earlier than sixty (60) calendar days from provision of Notice to the Company’s stockholders.
Within ten (10) calendar days after the entry of the Scheduling Order, AMC shall: (1) post a copy of the Notice, substantially in the
form of Exhibit C attached hereto, and Stipulation and the exhibits thereto on the Company’s website, which will remain on the
website through the date of the Settlement Hearing; (2) file with the SEC a Current Report on Form 8-K briefly describing the Settlement
and stating where AMC stockholders can locate this Stipulation and the Notice on AMC’s website; and (3) issue the Notice via press
release on Business Wire. The Parties believe the Notice constitutes adequate and reasonable notice to AMC stockholders pursuant
to applicable law and due process. No later than twenty (20) calendar days following entry of the Scheduling Order, Defendants’
Counsel shall file with the Court an appropriate affidavit or declaration with respect to the provision of the Notice in the manner specified
in this Paragraph.
4. ATTORNEYS’
FEES AND REIMBURSEMENT OF EXPENSES
4.1 In
recognition of the fact that Plaintiffs’ efforts were a substantial factor in AMC’s decision to adopt, implement, and maintain
the Reforms, which confer a substantial benefit on AMC and its stockholders, AMC’s directors’ and officers’ insurance
carriers, subject to Court approval, shall pay Plaintiffs’ Counsel the one million dollar ($1,000,000.00) Fee and Expense Award,
in full satisfaction of any and all claims for attorneys’ fees or expenses that have been, could have been, or could be asserted
by Plaintiffs’ Counsel or any other counsel in connection with the Derivative Matters.
4.2 It
is not a condition of this Stipulation, the Settlement, or the Order and Final Judgment that the Court award any attorneys’ fees
or expenses to Plaintiffs’ Counsel. The Court may consider and rule upon the fairness, reasonableness, and adequacy of the Settlement
independently of the Fee and Expense Award. In the event that the Court does not award attorneys’ fees or expenses, or in the event
the Court makes an award in an amount that is less than the amount requested by Plaintiffs’ Counsel or is otherwise unsatisfactory
to Plaintiffs’ Counsel, or in the event that any such award is vacated or reduced on appeal, this Stipulation and the Settlement,
including the effectiveness of the Releases and other obligations of the Parties set forth in this Stipulation, nevertheless shall remain
in full force and effect.
4.3 Unless
the Settlement is terminated pursuant to the terms of this Stipulation, the Fee and Expense Award, or such other amount as may be awarded
by the Court, shall constitute final and complete payment for Plaintiffs’ Counsel’s attorneys’ fees and expenses that
have been, could have been, or will be incurred in connection with the Derivative Matters. The Fee and Expense Award shall be funded
to the escrow account of The Brown Law Firm, P.C. (the “Escrow Account”) by AMC’s directors’ and officers’
insurance carriers within forty-five (45) calendar days of the latter of the date that: (i) the Court enters the Scheduling Order; and
(ii) Plaintiffs’
Counsel provides Defendants’ Counsel with
wire transfer instructions for the Escrow Account and an executed Form W-9. Defendants shall have no responsibility for, nor bear any
risk or liability with respect to, the Escrow Account, its operation, or any taxes or expenses incurred in connection with the Escrow
Account. Plaintiffs’ Counsel shall be solely responsible for any administrative costs associated with the Escrow Account, as well
as the filing of all informational and other tax returns with the Internal Revenue Service, or any other state or local taxing authority,
as may be necessary or appropriate.
4.4 The
Fee and Expense Award shall remain in the Escrow Account until the entry of an order approving the Fee and Expense Award, at which
time the Fee and Expense Award shall be immediately releasable to Plaintiffs’ Counsel, notwithstanding the existence of any
timely filed objections thereto, or potential for appeal therefrom, or collateral attack on the Settlement or any part thereof. No
payment from the Escrow Account shall be permitted without the consent of all Plaintiffs’ Counsel. The Fee and Expense Award
shall be subject to the obligation of Plaintiffs’ Counsel to make appropriate refunds or repayments to AMC’s
directors’ and officers’ insurance carriers as appropriate, if the Settlement is terminated or if, as a result of any
appeal or further proceedings on remand or successful collateral attack, the Fee and Expense Award is reduced or reversed and such
order reducing or reversing the Fee and Expense Award has become Final. If the Fee and Expense Award is reduced following any
appeal, Plaintiffs’ Counsel will pay AMC’s directors’ and officers’ insurance carriers the amount by which
the Fee and Expense Award was reduced within twenty (20) calendar days of such order. Should the Court order the payment of
attorneys’ fees and expenses to Plaintiffs’ Counsel in an amount less than one million dollars ($1,000,000.00) prior to,
or at the time of, entry of the Order and Final Judgment, then only the Court-approved amount shall be released to Plaintiffs’
Counsel. Any amounts remaining in the
Escrow Account shall be returned to AMC’s
directors’ and officers’ insurance carriers within twenty (20) calendar days of: (a) receiving from Defendants’ Counsel
notice of any termination of the Settlement; or (b) entry of any Final order or judgment reducing or reversing the Fee and Expense Award.
4.5 Defendants,
including AMC, shall have no responsibility for, and no liability with respect to, the allocation of the attorneys’ fees and expenses
awarded to Plaintiffs’ Counsel or distribution of attorneys’ fees and expenses from the Escrow Account.
4.6 Plaintiffs’
Counsel shall allocate the Fee and Expense Award among themselves. Plaintiffs’ Counsel agree that any disputes regarding the allocation
of the Fee and Expense Award, including any disputes regarding reimbursement of expenses, among them shall be presented to and be mediated,
and, if necessary, finally decided and resolved, by the Mediator on the terms and subject to the processes and procedures set forth by
the Mediator. The Mediator’s fees and costs for any such mediation and/or arbitration shall be borne solely by Plaintiffs’
Counsel and allocated among Plaintiffs’ Counsel by agreement or as finally determined by the Mediator. Defendants shall have no
responsibility for, and no liability with respect to, the allocation of the attorneys’ fees and expenses awarded among Plaintiffs’
Counsel and/or to any other person who may assert some claim thereto. Any dispute regarding any allocation of fees or expenses among
Plaintiffs’ Counsel shall have no effect on the Settlement.
4.7 Plaintiffs’
Counsel may apply to the Court for a service award of up to two thousand dollars ($2,000.00) for each of Plaintiffs (“Service Awards”),
only to be paid upon Court approval, and to be paid from the Fee and Expense Award in recognition of Plaintiffs’ participation
and effort in the prosecution of the Derivative Matters. Defendants shall not oppose Plaintiffs’ Counsel’s application for
the Service Awards. The failure of the Court to approve any Service
Award, in whole or in part, shall have no effect
on the Settlement set forth in this Stipulation, and the effectiveness of the Releases and other obligations of the Parties set forth
in this Stipulation nevertheless shall remain in full force and effect.
5. RELEASES
5.1 The
obligations incurred pursuant to this Stipulation and the Settlement are in consideration of the full and final disposition of the Derivative
Matters as against Defendants and the Releases provided for herein.
5.2 Pursuant
to the Order and Final Judgment, without further action by anyone, upon the Effective Date of the Settlement, AMC, the Released Plaintiff
Persons (individually and derivatively on behalf of AMC), and each and every stockholder of AMC, derivatively on behalf of AMC, shall
and hereby completely, fully, finally, and forever release, relinquish, settle, and discharge his, her, or its right to assert any or
all of the Released Plaintiff Claims (including Unknown Claims) against any of the Released Defendant Persons, and shall be forever barred
and enjoined from commencing, asserting, instituting, or in any way participating in the commencement or prosecution of any action or
other proceeding, in any forum, involving any of the Released Plaintiff Claims against any of the Released Defendant Persons.
5.3 Pursuant
to the Order and Final Judgment, without further action by anyone, upon the Effective Date of the Settlement, AMC and the Released Defendant
Persons each shall and hereby completely, fully, finally, and forever release, relinquish, settle, and discharge his, her, or its right
to assert any or all of the Released Defendant Claims (including Unknown Claims) against any of the Released Plaintiff Persons, and shall
be forever barred and enjoined from commencing, asserting, instituting, or in any way participating in the commencement or prosecution
of any action or other proceeding, in any forum, involving any of the Released Defendant Claims against any of the Released Plaintiff
Persons.
5.4 As
of the Effective Date, the Parties shall be finally and forever bound by the Settlement and the Order and Final Judgment. The Order and
Final Judgment, including, without limitation, the Releases set forth in Paragraphs 5.2-5.3 above, shall have res judicata, collateral
estoppel, and all other preclusive effects in all pending and future lawsuits, arbitrations, or other suits, actions, or proceedings
involving any of the Released Defendant Persons and/or the Released Plaintiff Persons.
5.5 Notwithstanding
Paragraphs 5.2-5.3 above, nothing in the Order and Final Judgment shall bar any action by any of the Parties to enforce the terms of
this Stipulation or the Order and Final Judgment.
6.
TERMS OF THE ORDER AND FINAL JUDGMENT
6.1 If
the Settlement contemplated by this Stipulation is approved by the Court, Plaintiffs’ Counsel and Defendants’ Counsel shall
jointly request that the Court enter the Order and Final Judgment, substantially in the form of Exhibit D attached hereto.
7.
STAY OF PROCEEDINGS
7.1 The
Parties agree that the Derivative Actions are hereby stayed in their entirety, and that the Parties shall not initiate any proceedings
in the Derivative Actions or otherwise, except those related to the Settlement.
7.2 If
any action is filed in any state or federal court asserting any of the Released Claims prior to final approval of the Settlement, the
Parties shall use their reasonable best efforts to prevent, stay, or seek the dismissal of such action, and to oppose the entry of any
interim or final relief in favor of the plaintiff in such action against any of the Released Defendant Persons that challenges the Settlement
or otherwise involves any of the Released Plaintiff Claims.
8. CONDITIONS
OF SETTLEMENT; EFFECT OF DISAPPROVAL, CANCELLATION, OR TERMINATION
8.1 The Effective Date
of this Stipulation shall be deemed to occur upon the occurrence or waiver of all of the following events:
a.
Court approval of the Notice, substantially in the form of Exhibit C attached hereto, and the subsequent
dissemination of the Notice to AMC stockholders;
b.
the Court has approved the Settlement as described herein, following dissemination of the Notice
to AMC stockholders and a hearing, if any, and entered the Order and Final Judgment in all material respects in the form of Exhibit D
attached hereto, approving the Settlement, dismissing the Derivative Actions with prejudice, and entering the Releases, without awarding
costs to any party, except as provided herein; and
c.
the passing of the date upon which the Order and Final Judgment becomes Final.
8.2 This
Stipulation is expressly conditioned on and subject to the Court’s entry of the Order and Final Judgment in all material respects
and the Order and Final Judgment becoming Final.
8.3 If
any of the conditions specified above in Paragraph 8.1 are not met, then this Stipulation shall be canceled and terminated subject to
Paragraph 8.5, unless counsel for the Parties mutually agree in writing to proceed with this Stipulation and the Settlement.
8.4 Plaintiffs
(provided they unanimously agree amongst themselves) and Defendants (provided they unanimously agree amongst themselves) shall each have
the right to terminate the Settlement and this Stipulation by providing written notice of their election to do so (“Termination
Notice”) to the other Parties within thirty (30) calendar days of: (a) the Court’s refusal to enter the Scheduling Order
in any respect that materially alters the rights and obligations of the Parties with
respect to the Settlement; (b) the Court’s
refusal to approve the Settlement or any material part thereof; (c) the Court’s refusal to enter the Order and Final Judgment in
any material respect; or (d) the date upon which an order vacating, modifying, revising, or reversing the Order and Final Judgment becomes
Final. For the avoidance of doubt, the Releases provided for in the Settlement and the Order and Final Judgment are material terms. In
the event that the Settlement is terminated, the provisions of Paragraph 8.5 below shall apply. Any decision or proceeding, whether in
this Court or any appellate court, solely with respect to the Fee and Expense Award or any other application for an award of attorneys’
fees or expenses, however, shall not be considered material to the Settlement, shall not affect the finality of the Order and Final Judgment,
and shall not be grounds for termination of the Settlement.
8.5 If,
for any reason, the Effective Date of this Stipulation does not occur, including if the Parties exercise their right to terminate the
Settlement pursuant to Paragraph 8.4 above, or if this Stipulation is in any way canceled, terminated or fails to become Final in accordance
with its terms: (a) the Settlement and the terms and provisions of this Stipulation (other than those set forth in Paragraphs 4.4, 4.5,
8.1, 8.3, 8.5, 9.1, 10.3-10.5, 10.15, and 10.16, hereof) shall be canceled and have no further force and effect; (b) all Parties shall
be restored to their respective positions in the Derivative Matters as of the date of this Stipulation, and the Parties shall proceed
in all respects as if this Stipulation had not been entered; (c) all Releases delivered in connection with this Stipulation shall be
null and void, except as otherwise provided for in this Stipulation; (d) the Fee and Expense Award paid to Plaintiffs’ Counsel
shall be refunded and returned to AMC’s directors’ and officers’ insurance carriers within twenty (20) calendar days
of the cancellation or termination; and (e) statements made in connection with the Mediation and negotiation of the Settlement and this
Stipulation shall be without prejudice in any way to the positions of the Parties with respect to
the Derivative Matters, shall not be deemed or
construed to be an admission of fact or wrongdoing by any Party of any act, matter, or proposition, shall not entitle any Party to recover
any fees, costs, or expenses incurred in connection with the Derivative Matters, and shall not be used in any manner for any purpose
in any subsequent proceeding in the Derivative Matters or any other action or proceeding.
9. NO ADMISSION
OF WRONGDOING
9.1 Neither
this Stipulation, nor the fact or any terms of the Settlement, nor any negotiations or proceedings in connection therewith is or shall
be deemed to be evidence of, or a presumption, admission, or concession by any Party or any Released Person of any fault, liability,
or wrongdoing whatsoever, concerning the Derivative Matters or the facts and circumstances giving rise to the Derivative Matters. This
Stipulation is not a finding or evidence of the validity or invalidity of any claims or defenses in the Derivative Matters or any other
actions or proceedings, or of any wrongdoing by any Defendant or of any damages or injury to Plaintiff, AMC, or any AMC stockholder.
Neither this Stipulation, nor the negotiations leading to the execution of this Stipulation, nor any proceedings taken pursuant to or
in connection with this Stipulation, and/or approval of the Settlement (including any arguments proffered in connection therewith): (a)
shall be offered against any of the Released Persons as evidence of, or construed as, or deemed to be evidence of any presumption, concession,
proof, or admission by any of the Released Persons or with respect to the truth of any fact alleged by Plaintiffs or the validity of
any claim that was or could have been asserted in the Derivative Matters or in any other litigation, or the deficiency of any defense
that has been or could have been asserted in the Derivative Matters or in any other litigation, or of any liability, negligence, fault,
injury, acts, omissions, or other wrongdoing of any kind by any of the Released Persons, or in any way referred to for any other reason
as against any of the Released Persons, in any civil, criminal, or administrative action or
proceeding, other than such proceedings as may
be necessary to effectuate or enforce the Settlement; (b) shall be offered against any of the Released Persons as evidence of, or construed
as, or deemed to be evidence of any presumption, concession, proof, or admission by any of the Released Persons that any of their claims
or defenses are without merit, or that damage recoverable for the Derivative Matters would not have exceeded the Settlement consideration,
or with respect to any liability, negligence, fault, or wrongdoing of any kind, or in any way referred to for any other reason against
any of the Released Persons, in any civil, criminal, or administrative action or proceeding, other than such proceedings as may be necessary
to effectuate or enforce the Settlement; nor (c) shall otherwise be admissible, referred to, or used in any proceeding of any nature,
for any purpose whatsoever; provided, however, that this Stipulation and/or the Order and Final Judgment may be introduced in any proceeding,
whether in the Court or otherwise, as may be necessary to argue that this Stipulation and/or the Order and Final Judgment has res
judicata, collateral estoppel, or other issue or claim preclusion effect, or to otherwise consummate or enforce this Stipulation
and/or the Order and Final Judgment.
10. MISCELLANEOUS
PROVISIONS
10.1 The
Parties: (a) acknowledge that it is their intent to obtain final approval by the Court of the Settlement; (b) agree to act in good faith
and cooperate to take all reasonable and necessary steps to expeditiously implement the terms and conditions of this Stipulation; and
(c) agree to use their best efforts to promptly agree upon and execute all such other documentation as may be reasonably required to
obtain final approval of the Settlement by the Court.
10.2 The
Parties intend this Stipulation and the Settlement to be a final and complete resolution of all disputes asserted or which could be asserted
by Plaintiffs (individually or derivatively on behalf of AMC) or AMC against the Released Defendant Persons with respect to the Released
Plaintiff Claims. Accordingly, the Parties and their counsel agree not to assert in any
forum that any of the Derivative Matters was
brought or defended in bad faith, without a reasonable basis, or in violation of Rule 11 of the Federal Rules of Civil Procedure. The
Parties agree that the Settlement consideration and the other terms of the Settlement were negotiated at arm’s-length and in good
faith by the Parties, and reflect the Settlement that was reached voluntarily after negotiations and consultation with experienced legal
counsel, who were fully competent to assess the strengths and weaknesses of their respective clients’ claims or defenses.
10.3
The Parties agree to continue to preserve the confidentiality of documents pursuant to the stipulated
protective orders entered by the Court in the Derivative Actions.
10.4
Information or materials obtained in the Mediation remain confidential and may not be used or offered
in any proceeding for any purpose.
10.5 The
terms of the Settlement, as reflected in this Stipulation, may not be modified or amended, nor may any of the provisions herein be waived,
except by a writing signed on behalf of each of the Parties (or their successors-in-interest).
10.6
This Stipulation shall be deemed drafted equally by all Parties and will not be construed against
any Party as the drafter.
10.7 The
headings herein are used for the purpose of convenience only and are not meant to have legal effect.
10.8 The
waiver by any Party of any breach of this Stipulation by any other Party shall not be deemed a waiver of any other prior or subsequent
breach of this Stipulation.
10.9 No
representations, warranties, or inducements have been made to any of the Parties concerning this Stipulation or its exhibits other than
the representations, warranties, and covenants contained and memorialized in such documents.
10.10 The
exhibits to this Stipulation are material and integral parts hereof and are fully incorporated herein by this reference.
10.11 This
Stipulation and the exhibits attached hereto constitute the entire agreement among the Parties with respect to the subject matter hereof
and supersede all prior and contemporaneous oral and written agreements and discussions.
10.12 In
the event that there exists a conflict or inconsistency between the terms of this Stipulation and the terms of any exhibit hereto, the
terms of this Stipulation shall prevail.
10.13 This
Stipulation may be executed in one or more counterparts, including by signature transmitted by facsimile or e-mailed PDF files. Each
counterpart, when so executed, shall be deemed to be an original, and all such counterparts together shall constitute the same instrument.
10.14 This
Stipulation shall be binding upon and shall inure to the benefit of the Parties (and, in the case of the Releases, all of the Released
Persons) and their respective agents, heirs, executors, administrators, transferees, predecessors, predecessors-in-interest, affiliates,
successors, successors-in-interest, and assigns, including any corporation, partnership, or other entity into or with which any Party
hereto may merge, consolidate, or reorganize. The Parties acknowledge and agree, for the avoidance of doubt, that the Released Persons
are intended beneficiaries of this Stipulation and are entitled to enforce the Releases contemplated by the Settlement.
10.15 This
Stipulation shall be considered to have been negotiated, executed, and delivered, and to be wholly performed, in the State of New York,
and the rights and obligations of the Parties shall be construed and enforced in accordance with, and governed by, the internal,
substantive laws of the State of New York without giving effect to
that State’s choice of law principles.
10.16
The exclusive forum for the adjudication of any disputes arising under this Stipulation shall be
the Court. Without affecting the finality of the Order and Final Judgment entered in accordance with this Stipulation, each Party accepts
and consents that the Court shall retain jurisdiction to implement and enforce the terms of this Stipulation and the Order and Final
Judgment, and to consider any matters or disputes arising out of or relating to the Settlement, including the Fee and Expense Award,
and the Parties submit to the jurisdiction of the Court for purposes of implementing and enforcing the Settlement embodied in this Stipulation
and the Order and Final Judgment.
10.17
Each Plaintiff represents and warrants that he or she: (a) has been a continuous stockholder of
AMC at all times relevant to the allegations in the Derivative Matters; and (b) will remain an AMC stockholder through the Effective
Date. Plaintiffs and Plaintiffs’ Counsel represent that none of the claims or causes of action asserted in the Derivative Actions
or any claims that Plaintiffs could have asserted in the Derivative Matters, have been assigned, encumbered, or in any manner transferred,
in whole or in part.
10.18 All
counsel and any other person executing this Stipulation and any of the exhibits hereto, or any related Settlement documents, warrant
and represent that they have the full authority to do so and that they have the authority to take appropriate action required or permitted
to be taken pursuant to this Stipulation to effectuate its terms.
10.19
Pending the Effective Date or the termination of the Stipulation according to its terms, Plaintiffs
and all other AMC stockholders, and anyone who acts or purports to act on their behalf, are barred and enjoined from commencing, prosecuting,
instigating, or in any way
participating in the commencement or prosecution of any action asserting
any Released Claims against any of the Released Persons in any court or tribunal.
10.20
Any Party may give notice or service to another Party under this Stipulation. Such notice shall be in writing and shall be deemed
to have been duly given upon receipt of hand delivery or email transmission. Notice shall be provided as follows:
If to
Plaintiff Gantulga: |
THE BROWN LAW FIRM, P.C. |
|
Attn: Timothy Brown |
|
767 Third Avenue, Suite 2501 |
|
New York, New York 10017 |
|
E-mail: tbrown@thebrownlawfirm.net |
|
|
If to Plaintiff Kenna: |
THE ROSEN LAW FIRM, P.A. |
|
Attn: Phillip Kim |
|
275 Madison Avenue, 40th Floor |
|
New York, New York 10016 |
|
E-mail: pkim@rosenlegal.com |
|
|
If to Plaintiff Manuel: |
SCHUBERT JONCKHEER & KOLBE LLP |
|
Attn: Willem F. Jonckheer |
|
2001 Union Street, Suite 200 |
|
San Francisco, California 94123 |
|
Email: wjonckheer@sjk.law |
|
|
If to Plaintiffs
Dinkevich and/or Carter: |
SHUMAN, GLENN & STECKER |
|
Attn: Rusty E. Glenn |
|
600 17th Street, Suite 2800 South |
|
Denver, Colorado 80202 |
|
Email: rusty@shumanlawfirm.com |
|
|
If to Plaintiff Lyon: |
KAHN SWICK & FOTI, LLC |
|
Attn: Melinda A. Nicholson |
|
1100 Poydras Street – Suite 960 |
|
New Orleans, Louisiana 70163 |
|
Email: melinda.nicholson@ksfcounsel.com |
|
|
If to Defendants: |
WEIL, GOTSHAL & MANGES LLP |
|
Attn: John A. Neuwirth |
|
767 Fifth Avenue |
|
New York, New York 10153 |
|
Email: john.neuwirth@weil.com |
10.21
Without further order of the Court, the Parties may agree to reasonable extensions of time to carry
out any provisions of this Stipulation.
10.22
Except as otherwise provided herein, each Party shall bear its own costs.
10.23
Whether or not this Stipulation is approved by the Court and whether or not this Stipulation and
the Settlement is consummated, or the Effective Date occurs, the Parties and their counsel shall use their best efforts to keep all negotiations,
discussions, acts performed, agreements, drafts, documents, and proceedings in connection with this Stipulation confidential and all
such negotiations, discussions, acts performed, agreements, drafts, documents, and proceedings shall be inadmissible in any proceeding,
including in any U.S. federal or state court or other tribunal, in accordance with Rule 408 of the Federal Rules of Evidence, as if such
Rule applied in all respects in any such proceeding or forum.
IN WITNESS WHEREOF, the Parties
have caused the Stipulation to be executed by their duly authorized attorneys and dated June 14, 2023.
Dated: June 14, 2023 | |
THE BROWN LAW FIRM, P.C. |
| |
|
| |
By:
/s/ Timothy Brown |
| |
Timothy Brown |
| |
767 Third Avenue, Suite 2501 |
| |
New York, NY 10017 |
| |
Telephone: (516) 922-5427 |
| |
|
| |
Counsel for Plaintiff Gantulga |
| |
|
| |
|
Dated: June 14, 2023 | |
THE ROSEN LAW FIRM, P.A. |
| |
|
| |
By:
/s/ Phillip Kim |
| |
Phillip Kim |
| |
275 Madison Avenue, 40th Floor |
| |
New York, NY 10016 |
| |
Telephone: (212) 686-1060 |
| |
|
| |
Counsel for Plaintiffs Gantulga and Kenna |
Dated: June 14, 2023 | |
SCHUBERT JONCKHEER & KOLBE LLP |
| |
|
| |
By:
/s/ Robert C. Schubert |
| |
Robert C. Schubert |
| |
Willem F. Jonckheer |
| |
2001 Union St., Suite 200 |
| |
San Francisco, CA 94123 |
| |
Telephone: (415) 788-4220 |
| |
|
| |
NEWMAN FERRARA LLP |
| |
Jeffrey M. Norton |
| |
1250 Broadway, 27th Floor |
| |
New York, NY 10001 |
| |
Telephone: (212) 619-5400 |
| |
|
| |
Counsel for Plaintiff Manuel |
| |
|
| |
|
Dated: June 14, 2023 | |
SHUMAN, GLENN & STECKER |
| |
|
| |
By:
/s/ Rusty E. Glenn |
| |
Rusty E. Glenn |
| |
600 17th Street, Suite 2800 |
| |
South Denver, CO 80202 |
| |
Telephone: (303) 861-3003 |
| |
|
| |
Brett D. Stecker |
| |
326 W. Lancaster Avenue |
| |
Ardmore, PA 19003 |
| |
Telephone: (303) 861-3003 |
| |
|
| |
COHEN MILSTEIN SELLERS & TOLL PLLC |
| |
Richard A. Speirs |
| |
88 Pine Street, 14th Fl. |
| |
New York, NY 10005 |
| |
Telephone: (212) 838-7797 |
| |
|
| |
KASKELA LAW LLC |
| |
D. Seamus Kaskela |
| |
18 Campus Blvd., Suite 110 |
| |
Newtown Square, PA 19073 |
| |
Telephone: 484-258-1585 |
|
|
Counsel for Plaintiffs Dinkevich and Carter |
|
|
|
|
|
|
Dated: June 14, 2023 |
|
KAHN SWICK & FOTI, LLC |
|
|
|
|
|
By:
/s/ Melinda A. Nicholson |
|
|
Melinda A. Nicholson |
|
|
Nicolas Kravitz |
|
|
1100 Poydras Street, Suite 960 |
|
|
New Orleans, LA 70163 |
|
|
Telephone: (504) 455-1400 |
|
|
|
|
|
J. Ryan Lopatka |
|
|
250 Park Ave., Suite 2040 |
|
|
New York, NY 10177 |
|
|
Telephone: (212) 696-3730 |
|
|
|
|
|
Counsel for Plaintiff Lyon |
|
|
|
|
|
|
Dated: June 14, 2023 |
|
WEIL, GOTSHAL & MANGES LLP |
|
|
|
|
|
By:
/s/ John A. Neuwirth |
|
|
John A. Neuwirth |
|
|
Joshua S. Amsel |
|
|
Stefania D. Venezia
Matthew S. Connors |
|
|
767 Fifth Avenue |
|
|
New York, NY 10153 |
|
|
Tel: (212) 310-8000 |
|
|
|
|
|
Counsel for Nominal Defendant AMC Entertainment
Holdings, Inc. and Defendants Adam M. Aron, Craig R. Ramsey, Chris A. Cox,Lincoln Zhang, Jack Q. Gao, Lloyd L. Hill, Gary F. Locke,
Howard W. Koch, Jr., Kathleen M. Pawlus, Anthony J. Saich, Mao Jun Zeng, Philip Lader, Lee E. Wittlinger, and Adam J.
Sussman |
EXHIBIT A
CORPORATE GOVERNANCE
REFORMS
To
fully resolve the Dinkevich, Manuel, Gantulga, Kenna, and Lyon Actions, and the Lyon Litigation Demand
(collectively, the “Derivative Matters”), AMC Entertainment Holdings, Inc. (“AMC” or the “Company”)
agrees to adopt the following corporate governance reforms (the “Reforms”) and keep the Reforms in Sections II, III, and
IV in place for at least five (5) years unless, and only if, AMC’s Board of Directors (the “Board”) determines in a
good faith exercise of its business judgment that a policy, procedure, control, or agreement term is not in the Company’s best
interest or conflicts with any provision of any applicable law, including, without limitation, the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended, or any rules or regulations promulgated thereunder.1 If any of the Reforms
in Sections II, III, or IV is eliminated or modified before it has been in place for at least five (5) years, the Board shall, within
one hundred twenty (120) business days, adopt a replacement provision that, in the business judgment of the Board, accomplishes substantially
the same objective; provided, however, that no such replacement provision need be adopted if the Board determines in a good faith exercise
of its business judgment that a replacement provision is not in the Company’s best interest or conflicts with any provision of
any applicable law. Any changes that are made pursuant to the above shall be disclosed in a public filing with the U.S. Securities and
Exchange Commission (the “SEC”) or on the Company’s website.
The
Company and the Individual Defendants2 acknowledge and agree that Plaintiffs’ efforts were a substantial factor in the
Company’s decision to adopt, implement, and maintain the Reforms, which confer a substantial benefit on the Company and its stockholders.
I. APPOINTMENT
OF ONE NEW INDEPENDENT DIRECTOR
No later than six (6) months
following the Order and Final Judgment becoming Final, the Company shall appoint a new independent director, pursuant to the following
process.
The Nominating and Corporate
Governance Committee (the “Governance Committee”) shall identify and screen one or more individuals to recommend to the Board
to serve as an independent director of the Board. Once a candidate is identified, the Board shall, subject to its fiduciary duties, elect
the candidate to fill a director vacancy to serve until the next Annual Meeting of Stockholders to vote on the class of directors to
which the candidate is elected is held and the candidate can be nominated for election by the Company’s stockholders.
In discharging this role,
the Governance Committee is empowered to inquire into any matter it considers appropriate to carry out its responsibilities, with access
to all books, records,
1
Any capitalized terms used but not defined in this Exhibit A shall have the meanings given
to them in the Stipulation of Settlement, dated June 14, 2023.
2
The term “Individual Defendants” refers, collectively, to Adam M. Aron, Craig R. Ramsey, Chris A. Cox, Lincoln Zhang,
Jack Q. Gao, Lloyd L. Hill, Gary F. Locke, Howard W. Koch, Jr., Kathleen M. Pawlus, Anthony J. Saich, Maojun Zeng, Philip Lader, Lee
E. Wittlinger, and Adam J. Sussman.
facilities, and personnel of AMC, and, subject
to the direction of the Board, the Governance Committee is authorized and delegated the authority to act on behalf of the Board with
respect to any matter necessary or appropriate to the accomplishment of this role. The Governance Committee also has the power to retain
outside counsel, director search and recruitment consultants, and/or other advisors to assist it in carrying out this role. The Governance
Committee shall have the sole authority to retain, compensate, direct, oversee, and terminate any such outside counsel, director search
and recruitment consultants, and/or other advisors hired to assist the Governance Committee, who shall be accountable ultimately to the
Governance Committee. The Governance Committee shall set the compensation, and oversee the work, of any outside counsel, director search
and recruitment consultants, and/or other advisors retained by the Governance Committee. AMC shall provide adequate resources to support
the Governance Committee’s activities in connection with this role, including compensation of the Governance Committee’s
counsel, consultants, and/or other advisors.
| II. | IMPROVEMENTS TO THE NOMINATING
AND CORPORATE GOVERNANCE COMMITTEE CHARTER |
AMC shall adopt a resolution
to amend the Nominating and Corporate Governance Committee Charter (the “Governance Committee Charter”). The amended Governance
Committee Charter shall be posted on the Company’s website. The Governance Committee Charter shall be amended to include the following:
1.
The Governance Committee shall meet with each prospective new Board member prior to his or her nomination
to the Board, and then recommend whether such individual shall be nominated for membership to the Board. Such review shall require, inter
alia, a background check of each candidate;
2. Potential
disqualifying conflicts of interests to be considered shall include familial relationships with Company officers or directors, interlocking
directorships, substantial business, civic, and/or social relationships with other members of the Board, and business relationships with
the Company that could impair the prospective Board member’s ability to act independently from the other Board members or the Company;
3.
The Governance Committee shall work with the Audit Committee in fulfilling its duties related to
the Company’s corporate governance principles and oversight of the Company’s compliance with applicable laws and regulations;
and
4.
In accordance with its duties to develop principles of corporate governance and recommend such principles
to the Board, the Governance Committee shall ensure that any agreed upon corporate governance principles or guidelines are widely available
to the public, through the Company’s website or otherwise.
In discharging this role,
the Governance Committee is empowered to inquire into any matter it considers appropriate to carry out its responsibilities, with access
to all books, records, facilities, and personnel of AMC, and, subject to the direction of the Board, the Governance Committee is authorized
and delegated the authority to act on behalf of the Board with respect to any matter necessary or appropriate to the accomplishment of
this role. The Governance
Committee also has the power to retain outside
counsel, director search and recruitment consultants, and/or other advisors to assist it in carrying out this role. The Governance Committee
shall have the sole authority to retain, compensate, direct, oversee, and terminate outside counsel, director search and recruitment
consultants, and/or other advisors hired to assist the Governance Committee, who shall be accountable ultimately to the Governance Committee.
The Governance Committee shall set the compensation, and oversee the work, of any outside counsel, director search and recruitment consultants,
and/or other advisors retained by the Governance Committee. AMC shall provide adequate resources to support the Governance Committee’s
activities in connection with this role, including compensation of the Governance Committee’s counsel, consultants, and/or other
advisors.
III. IMPROVEMENTS
TO THE COMPENSATION COMMITTEE CHARTER
AMC shall adopt a resolution
to amend the Compensation Committee Charter. The amended Compensation Committee Charter shall be posted on the Company’s website.
The Compensation Committee Charter shall be amended to include the following:
1. In
determining, setting, or approving annual short-term compensation arrangements, the Compensation Committee shall take into account the
particular executive’s performance as it relates to both legal compliance and compliance with the Company’s internal policies
and procedures. This shall not affect payments or benefits that are required to be paid pursuant to the Company’s plans, policies,
or agreements; and
2. In
determining, setting, or approving termination benefits and/or separation pay to executive officers, the Compensation Committee shall
take into consideration the circumstances surrounding the particular executive officer’s departure from the Company and the executive’s
performance as it relates to both legal compliance and compliance with the Company’s internal policies and procedures. This shall
not affect payments or benefits that are required to be paid pursuant to the Company’s plans, policies, or agreements.
In
discharging this role, the Compensation Committee is empowered to inquire into any matter that it considers appropriate to carry out
its responsibilities, with access to all books, records, facilities, and personnel of the Company, and, subject to the direction of the
Board, the Compensation Committee is authorized and delegated the authority to act on behalf of the Board with respect to any matter
necessary or appropriate to the accomplishment of this role. The Compensation Committee also has the power to retain outside counsel,
compensation consultants, and/or other advisors to assist it in carrying out its activities in connection with this role. The Compensation
Committee shall have the sole authority to retain, compensate, direct, oversee, and terminate outside counsel, compensation consultants,
and/or other advisors hired to assist the Compensation Committee, who shall be accountable ultimately to the Compensation Committee.
The Compensation Committee shall set the compensation, and oversee the work, of any outside counsel, compensation consultants, and/or
other advisors retained by the Compensation Committee. AMC shall provide adequate resources to support the Compensation Committee’s
activities in connection
with this role, including compensation of the Compensation Committee’s counsel, consultants, and/or other advisors.3
IV. EMPLOYEE COMPLIANCE
TRAINING
The Company shall mandate
a Compliance Management Program to be headed by the Company’s Compliance Director. The training program shall cover all matters
of compliance with Company policies and relevant laws and regulations. Specifically, the Company shall mandate that the training program
include the following:
1.
The Compliance Director shall facilitate and oversee training for all members of the Company’s
theater support center accounting team who hold a title of manager or higher and who have responsibility for SEC reporting and/or establishing
the Company’s accounting policies concerning compliance with Generally Accepted Accounting Principles (GAAP) and other financial
reporting regulations and policies, including changes in the law;
2. All
such theater support center accounting employees shall receive training concerning the Company’s corporate governance policies
appropriate to his or her position (including, without limitation, the Code of Business Conduct and Ethics, the Governance Guidelines,
the Insider Trading Policy, and the Code of Compliance) and recent developments regarding the implementation of such policies;
3.
All such employee training shall be conducted in the employee’s first year of employment and,
thereafter, at least once every two (2) years;
4.
Upon completion of training, the employee receiving the training shall provide a certification as
to his or her receipt and understanding of his or her obligations under the Company’s policies; and
5.
The Compliance Director will keep a record of all certifications and shall promptly notify employees
who fail to provide certifications and their supervisors.
3 After
the Parties reached an agreement in principle on the material terms of the Settlement on June 21, 2022, but before the Parties executed
the formal Stipulation of Settlement, AMC appointed a new independent director, Denise “Dee” Clark, who joined the Board
effective January 1, 2023, and made the improvements to its Nominating and Corporate Governance Committee and Compensation Committee
Charters set forth in these Reforms.
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
NARANBOLD
GANTULGA, derivatively on behalf of AMC ENTERTAINMENT HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG
R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q. GAO, MAOJUN ZENG, ANTHONY J. SAICH, LLOYD HILL, GARY F. LOCKE, HOWARD W. KOCH, JR.,
KATHLEEN M. PAWLUS, and DALIAN WANDA GROUP CO.,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS,
INC.,
Nominal Defendant.
|
Case
No. 1:18-cv-10007-ALC
Exhibit B |
[additional
caption on next page]
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
JENNIFER
KENNA, derivatively on behalf of AMC ENTERTAINMENT HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG
R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q. GAO, MAOJUN ZENG, ANTHONY J. SAICH, LLOYD HILL, GARY F. LOCKE, HOWARD W. KOCH, JR.,
KATHLEEN M. PAWLUS, and DALIAN WANDA GROUP CO.,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS,
INC.,
Nominal Defendant.
|
Case
No. 1:19-cv-09148-ALC |
[additional
caption on next page]
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
LORRA
MANUEL, Derivatively on Behalf of Nominal Defendant AMC ENTERTAINMENT HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG
R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q. GAO, LLOYD L. HILL, HOWARD W. KOCH, JR., GARY F. LOCKE, KATHLEEN M. PAWLUS, ANTHONY
J. SAICH, and MAOJUN ZENG,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS,
INC.,
Nominal Defendant.
|
Case
No. 1:20-cv-02456-ALC |
[additional
caption on next page]
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
DAVID
DINKEVICH and ANN CARTER, derivatively on behalf of AMC ENTERTAINMENT HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG
R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q. GAO, LLOYD HILL, HOWARD W. KOCH, JR., GARY F. LOCKE, KATHLEEN M. PAWLUS, ANTHONY
J. SAICH, and MAOJUN ZENG,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS,
INC.,
Nominal Defendant.
|
Case
No. 1:20-cv-02870-ALC |
[PROPOSED] SCHEDULING
ORDER
WHEREAS, (1) Plaintiff Naranbold
Gantulga in the action captioned Gantulga v. Aron, et al., Case No. 1:18-cv-10007-ALC (S.D.N.Y.) (the “Gantulga Action”),
Plaintiff Jennifer Kenna in the action captioned Kenna v. Aron, et al., Case No. 1:19-cv-09148-ALC (S.D.N.Y.) (the “Kenna
Action”), Plaintiff Lorra Manuel in the action captioned Manuel v. Aron, et al., Case No. 1:20-cv-02456-ALC (S.D.N.Y.)
(the “Manuel Action”), Plaintiffs David Dinkevich and Ann Carter in the action captioned Dinkevich, et al. v. Aron,
et al., Case No. 1:20-cv-02870-ALC (S.D.N.Y.) (the “Dinkevich Action”), and Plaintiff John R. Lyon (together with
Plaintiffs Gantulga, Kenna, Manuel, Dinkevich, and Carter, “Plaintiffs”) in the action captioned Lyon v. Aron, et al.,
Case No. 1:21-cv-07940-ALC (S.D.N.Y.) (the “Lyon Action,” and together with the Gantulga, Kenna, Manuel,
and Dinkevich Actions, the “Derivative Actions”); (2) Defendants Adam M. Aron, Craig R. Ramsey, Chris A. Cox, Lincoln
Zhang, Jack Q. Gao, Maojun Zeng, Anthony J. Saich, Lloyd L. Hill, Gary F. Locke, Howard W. Koch, Jr., Kathleen M. Pawlus, Phillip Lader,
Lee E. Wittlinger, and Adam J. Sussman (collectively, the “Individual Defendants”); and (3) Nominal Defendant AMC Entertainment
Holdings, Inc. (“AMC” or the “Company,” and together with the Individual Defendants, “Defendants”
and each a “Defendant,” and together with Plaintiffs, the “Parties” and each a “Party”) have entered
into the Stipulation of Settlement, dated June 14, 2023 (the “Stipulation”), which (i) sets forth the terms and conditions
for the settlement and resolution of the Derivative Actions and the litigation demand Plaintiff Lyon made on the AMC Board of Directors
(collectively, the “Derivative Matters”), (ii) fully, finally, and forever resolves, discharges, and settles the Released
Plaintiff Claims against the Released Defendant Persons, and the Released Defendant Claims against the Released Plaintiff Persons, and
(iii) provides for dismissal of the Derivative Actions with prejudice;
WHEREAS, Plaintiffs have
made an unopposed motion, pursuant to Rule 23.1 of the Federal Rules of Civil Procedure, for an order: (i) preliminarily approving the
proposed settlement and compromise between Plaintiffs and Defendants on the terms and conditions set forth in the Stipulation (the “Settlement”);
(ii) approving the form and manner of the notice of the Settlement; and (iii) setting a date for the Settlement Hearing;
WHEREAS, the Court having:
(i) read and considered Plaintiffs’ Unopposed Motion for Preliminary Approval of Derivative Settlement, together with the accompanying
Memorandum of Points and Authorities; (ii) read and considered the Stipulation, as well as all of the exhibits attached thereto; and
(iii) heard and considered arguments by counsel for the Parties in favor of preliminary approval of the Settlement;
WHEREAS, the Court finds,
upon a preliminary evaluation, that the proposed Settlement falls within the range of possible approval criteria, as it provides a beneficial
result for AMC and AMC’s stockholders, and appears to be the product of serious, informed, non-collusive negotiations overseen
by an experienced mediator; and
WHEREAS, the Court also finds,
upon a preliminary evaluation, that AMC’s stockholders should be apprised of the Settlement through the proposed form and means
of notice, allowed to file objections, if any, thereto, and appear at the Settlement Hearing;
NOW, THEREFORE,
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED, this ________ day of ___________, 2023 as follows:
1. This Court, for purposes
of this order (the “Scheduling Order”), adopts the definitions set forth in the Stipulation.
2.
This Court preliminarily approves, subject to further consideration at the Settlement Hearing described
below, the Settlement as set forth in the Stipulation as being fair, reasonable, and adequate.
3.
A hearing shall be held on _______________, 2023 at ____ _.m., before the Honorable Andrew L. Carter,
Jr., at the U.S. District Court for the Southern District of New York, 40 Foley
Square, Courtroom 1306, New York, New York 10007 (the “Settlement Hearing”), or as may be undertaken via a remote proceeding
such as telephone or video conference (in the discretion of the Court without further notice to AMC stockholders) for the following purposes:
(a) to
determine whether the Settlement on the terms and conditions provided f or in the Stipulation is fair, reasonable, and adequate
to AMC, and should be approved by the Court;
(b) to
determine whether the Order and Final Judgment, substantially in the form attached as Exhibit D to the Stipulation, should be entered
dismissing the Derivative Actions with prejudice against Defendants, and fully and finally releasing all Released Claims against the
Released Persons;
(c) to
determine whether the agreed-to Fee and Expense Award, as well as the Service Awards, should be approved;
(d) to
consider any objections to the Settlement and/or the Fee and Expense Award; and
(e) to
consider any other matters that may properly be brought before the Court in connection with the Settlement.
4. Within ten (10) calendar days after the entry of this Scheduling Order, AMC shall: (a) post a copy of the Notice, substantially in the form attached as Exhibit C to the Stipulation, and
the Stipulation and exhibits thereto, on the
Company’s website, which will remain on the website through the date of the Settlement Hearing; (b) file with the SEC a Current
Report on Form 8-K briefly describing the Settlement and stating where AMC stockholders can locate the Stipulation and the Notice on
AMC’s website; and (c) issue the Notice via press release on Business Wire.
5.
AMC shall undertake the administrative responsibility for providing the Notice to its stockholders,
and will pay all costs, fees, and expenses related to providing Notice of the Settlement to stockholders (which may be reimbursed by
AMC’s directors’ and officers’ insurance carriers).
6.
No later than twenty (20) calendar days following entry of this Scheduling Order, Defendants’
Counsel shall file with the Court an appropriate affidavit or declaration with respect to the provision of the Notice in the manner specified
in Paragraph 4 of this Scheduling Order.
7.
The Court approves as to form and content, the Notice in the form attached as Exhibit C to the Stipulation.
The Court finds that the form, substance, and dissemination of information regarding the Settlement in the manner set out in this Scheduling
Order: (a) constitutes notice that is reasonably calculated, under the circumstances, to apprise AMC stockholders of the pendency of
the Derivative Matters, of the effect of the Settlement (including the releases to be provided thereunder), of Plaintiffs’ Counsel’s
Fee and Expense Award, of their right to object to the Settlement and/or the Fee and Expense Award, and of their right to appear at the
Settlement Hearing; (b) constitutes due, adequate, and sufficient notice to all persons and entities entitled to receive notice of the
Settlement; and (c) satisfies the requirements of Rule 23.1 of the Federal Rules of Civil Procedure, the United States Constitution (including
the Due Process Clause), and all other applicable laws and rules. The date and time of the Settlement Hearing shall be included in the
Notice before it is posted.
8.
Any AMC stockholder who or which continues to hold AMC shares as of the date of the Settlement Hearing
may appear and show cause, if he, she, or it has any reason why the Settlement embodied in the Stipulation should not be approved as
fair, reasonable, and adequate, why the Order and Final Judgment should not be entered, or why the Fee and Expense Award or the Service
Awards should not be awarded. However, unless otherwise directed by the Court for good cause shown, no AMC stockholder shall be heard
or entitled to contest the approval of the proposed Settlement, or, if approved, the Order and Final Judgment to be entered thereon,
unless that AMC stockholder has caused to be filed, and served on counsel listed in Paragraph 9, written objections stating all supporting
bases and reasons for the objection, and setting forth proof, including documentary evidence, of current ownership of AMC stock and ownership
of AMC stock as of June 14, 2023, the date the Stipulation was executed.
9.
Any AMC stockholder who desires to be heard at the Settlement Hearing or to contest the approval
of the terms and conditions of the Settlement, the Stipulation, the Order and Final Judgment, the Fee and Expense Award, and/or the Service
Awards must file the written objection(s) and corresponding materials with the Clerk of the Court, U.S. District Court for the Southern
District of New York, 40 Foley Square, New York, New York 10007, and serve such materials (either by hand delivery or by first class
mail) on each of the following counsel at the addresses set forth below, such that they are received no later than twenty-one (21) calendar
days prior to the Settlement Hearing, set for _______________________, 2023:
THE
BROWN LAW FIRM, P.C. |
SCHUBERT
JONCKHEER & KOLBE LLP |
Timothy
Brown |
Willem
F. Jonckheer |
767
Third Avenue, Suite 2501 |
2001
Union Street, Suite 200 |
New
York, NY 10017 |
San Francisco,
CA 94123 |
Tel:
(516) 922-5427 |
Tel:
(415) 788-4220 |
Fax:
(516) 344-6204 |
Fax:
(415) 788-0161 |
Email:
tbrown@thebrownlawfirm.net |
Email:
wjonckheer@sjk.law |
Counsel
for Plaintiff Naranbold Gantulga |
Counsel
for Plaintiff Lorra Manuel |
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THE
ROSEN LAW FIRM, P.A. |
SHUMAN,
GLENN & STECKER |
Phillip
Kim |
Brett
D. Stecker |
275
Madison Avenue, 40th Floor |
326 W.
Lancaster Avenue |
New
York, NY 10016 |
Ardmore,
PA 19003 |
Tel.:
(212) 686-1060 |
Tel.:
(303) 861-3003 |
Fax:
(212) 202-3827 |
Fax:
(303) 536-7849 |
Email:
pkim@rosenlegal.com |
Email:
brett@shumanlawfirm.com |
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Counsel
for Plaintiffs Jennifer Kenna and |
Counsel
for Plaintiff David Dinkevich and |
Naranbold
Gantulga |
Ann
Carter |
KAHN SWICK & FOTI, LLC |
Melinda Nicholson |
1100 Poydras Street – Suite 960 |
New Orleans, LA 70163 |
Tel.: (504) 455-1400 |
Fax: (504) 455-1498- |
Email: Melinda.Nicholson@ksfcounsel.com |
Counsel for Plaintiff
John R. Lyon III
Within twenty-four (24) hours of receiving any objection, Plaintiffs’
Counsel will forward it on to Defendants’ Counsel.
10. Any
objections, filings, and other submissions must: (a) state the name, address, and telephone number of the objector, and, if represented
by counsel, the name, address, and telephone number of his, her, or its counsel; (b) be signed by the objector; (c) state that the objection
is being filed with respect to the Derivative Matters; (d) set forth a specific, written statement of the objection(s), the nature of
the objection(s), and the specific reason(s) for the objection(s), including any legal and evidentiary support the objector wishes to
bring to the Court’s attention; (e) provide proof of ownership of AMC common stock as of June 14, 2023, including the number of
shares of AMC common stock held and the date of purchase or acquisition, and contain a statement that the objector continues to hold
shares of AMC common stock as of the date
of the filing of any such objection and will
continue to hold shares of AMC common stock as of the date of the Settlement Hearing; and (f) provide any and all documentation or evidence
in support of such objection. In addition, if intending to appear, and requesting to be heard, at the Settlement Hearing, he, she, or
it must, in addition to the requirements above, file with the Clerk of the Court and serve (either by hand delivery or by first class
mail) upon the above listed counsel a written notice of his, her, or its intention to appear at the Settlement Hearing, identifying therein
any witnesses he, she, or it intends to call at the Settlement Hearing and a statement as to the subjects of their testimony, and any
and all evidence that he, she, or it intends to present at the Settlement Hearing.
11.
Unless the Court orders otherwise, any person or entity who or which does not make his, her, or
its objection in the manner provided herein shall: (a) be deemed to have waived and forfeited his, her, or its right to object to any
aspect of the Settlement, the Stipulation, the Order and Final Judgment, the Fee and Expense Award, or the Service Awards; (b) be forever
barred and foreclosed from objecting to the fairness, reasonableness, or adequacy of the Settlement, the Stipulation, the Order and Final
Judgment to be entered approving the Settlement, the Fee and Expense Award, or the Service Awards; and (c) be deemed to have waived and
be forever barred and foreclosed from being heard, in this or any other suit, action, or proceeding (including, without limitation, any
right of appeal), with respect to any matters concerning the Settlement, the Stipulation, the Order and Final Judgment, the Fee and Expense
Award, or the Service Awards.
12.
Until otherwise ordered, all proceedings in the Derivative Actions are stayed in their entirety,
except those related to the Settlement. Pending a final determination as to whether the Settlement should be approved: (a) AMC, the Released
Plaintiff Persons (individually and
derivatively on behalf of AMC), and each and
every stockholder of AMC shall be barred and enjoined from commencing, asserting, instituting, or in any way participating in the commencement
or prosecution of any action or other proceeding, in any forum, involving any of the Released Plaintiff Claims against any of the Released
Defendant Persons; and (b) AMC and the Released Defendant Persons shall be barred and enjoined from commencing, asserting, instituting,
or in any way participating in the commencement or prosecution of any action or other proceeding, in any forum, involving any of the
Released Defendant Claims against any of the Released Plaintiff Persons.
13. Neither
this Order, the Stipulation, nor the fact or any terms of the Settlement, nor any negotiations or proceedings in connection therewith
is or shall be deemed to be evidence of, or a presumption, admission, or concession by any Party or any Released Person of any fault,
liability, or wrongdoing whatsoever, concerning the Derivative Matters or the facts and circumstances giving rise to the Derivative Matters.
This Order is not a finding or evidence of the validity or invalidity of any claims or defenses in the Derivative Matters or any other
actions or proceedings, or of any wrongdoing by any Defendant or of any damages or injury to Plaintiff, AMC, or any AMC stockholder.
Neither this Order, the Stipulation, nor the negotiations leading to the execution of the Stipulation, nor any proceedings taken pursuant
to or in connection with the Stipulation, and/or approval of the Settlement (including any arguments proffered in connection therewith):
(a) shall be offered against any of the Released Persons as evidence of, or construed as, or deemed to be evidence of any presumption,
concession, proof, or admission by any of the Released Persons or with respect to the truth of any fact alleged by Plaintiffs or the
validity of any claim that was or could have been asserted in the Derivative Actions or in any other litigation, or the deficiency of
any defense that has been or could have been asserted in the
Derivative Actions
or in any other litigation, or of any liability, negligence, fault, injury, acts, omissions, or other wrongdoing of any kind by any of
the Released Persons, or in any way referred to for any other reason as against any of the Released Persons, in any civil, criminal,
or administrative action or proceeding, other than such proceedings as may be necessary to effectuate or enforce the Settlement; (b)
shall be offered against any of the Released Persons as evidence of, or construed as, or deemed to be evidence of any presumption, concession,
proof, or admission by any of the Released Persons that any of their claims or defenses are without merit, or that damage recoverable
in the Derivative Matters would not have exceeded the Settlement consideration, or with respect to any liability, negligence, fault,
or wrongdoing of any kind, or in any way referred to for any other reason against any of the Released Persons, in any civil, criminal,
or administrative action or proceeding, other than such proceedings as may be necessary to effectuate or enforce the Settlement; nor
(c) shall otherwise be admissible, referred to, or used in any proceeding of any nature, for any purpose whatsoever; provided, however,
that this Scheduling Order, the Stipulation, and/or the Order and Final Judgment may be introduced in any proceeding, whether in this
Court or otherwise, as may be necessary to argue that this Scheduling Order, the Stipulation, and/or the Order and Final Judgment has
res judicata, collateral estoppel, or other issue or claim preclusion effect, or to otherwise enforce the Stipulation and/or the
Order and Final Judgment.
14. If
the Settlement is terminated as provided in the Stipulation or the Effective Date of the Settlement otherwise fails to occur: (a) this
Scheduling Order shall be vacated, rendered null and void, and be of no further force and effect (except as otherwise provided in the
Stipulation); (b) the rights of Plaintiffs, Defendants, AMC, and its stockholders, the Parties shall each revert to their respective
positions in the Derivative Matters as of the date of the Stipulation, and the Parties shall proceed in all respects as if the Stipulation
had not been entered into; (c) all
of the Parties’ respective claims and defenses
as to any issue in the Derivative Matters shall be preserved without prejudice in any way; (d) statements made in connection with the
Mediation and negotiation of the Settlement and the Stipulation shall be without prejudice in any way to the positions of the Parties
with respect to the Derivative Matters, shall not be deemed or construed to be an admission of fact or wrongdoing by any Party of any
act, matter, or proposition, shall not entitle any Party to recover any fees, costs, or expenses incurred in connection with the Derivative
Matters, and shall not be used in any manner for any purpose in any subsequent proceeding in the Derivative Matters or any other action
or proceeding; and (e) neither the existence of the Settlement or the Stipulation, nor any settlement communications, shall be admissible
as evidence or shall be referred to for any purpose in the Derivative Matters, or in any other suit, action, or proceeding.
15. Plaintiffs
shall file their motion for final approval of the Settlement at least twenty-eight (28) calendar days prior to the Settlement Hearing.
If there is any objection to the Settlement, Plaintiffs shall file a response to the objection(s) at least seven (7) calendar days prior
to the Settlement Hearing.
16. If
the Settlement is approved by the Court following the Settlement Hearing, the Parties will request that the Court enter the Order and
Final Judgment, substantially in the form attached as Exhibit D to the Stipulation. The effectiveness of the Order and Final Judgment
shall not be conditioned upon the approval by the Court of the Fee and Expense Award or the Service Awards, either at all or in any particular
amount.
17. This
Court may, for good cause, extend any of the deadlines set forth in this Scheduling Order without further notice to stockholders.
18. The
Court reserves the right to adjourn and reconvene the Settlement Hearing or any adjournment thereof, including the consideration of the
Fee and Expense Award, as well as the Service Awards, without further notice of any kind other than oral announcement at the Settlement
Hearing or any adjournment thereof. The Court further reserves the right to hold the Settlement Hearing telephonically or by videoconference
without further notice to AMC stockholders. Any AMC stockholder (or his, her, or its counsel) who wishes to appear at the Settlement
Hearing should consult the Court’s calendar and/or AMC’s website for any change in date, time, or format of the Settlement
Hearing. The Court may approve the Settlement and any of its terms, with such modifications as may be agreed to by the Parties, if appropriate,
without further notice to AMC’s stockholders. The Court retains jurisdiction to consider all further applications arising out of
or connected with the Settlement.
IT IS SO ORDERED.
DATED: _________________ |
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HONORABLE ANDREW L. CARTER, JR. |
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U.S. DISTRICT JUDGE |
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
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NARANBOLD GANTULGA, derivatively
on behalf of AMC ENTERTAINMENT HOLDINGS, INC., |
Case No. 1:18-cv-10007-ALC |
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Plaintiff, |
Exhibit C |
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v. |
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ADAM M. ARON, CRAIG R. RAMSEY, CHRIS A. COX,
LINCOLN ZHANG, JACK Q. GAO, MAOJUN ZENG, ANTHONY J. SAICH, LLOYD HILL, GARY F. LOCKE, HOWARD W. KOCH, JR., KATHLEEN M. PAWLUS, and
DALIAN WANDA GROUP CO., |
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Defendants, |
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and |
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AMC ENTERTAINMENT HOLDINGS, INC., |
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Nominal Defendant. |
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[additional
caption on next page]
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
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JENNIFER
KENNA, derivatively on behalf of AMC ENTERTAINMENT HOLDINGS, INC., |
Case
No. 1:19-cv-09148-ALC |
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Plaintiff, |
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v. |
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ADAM
M. ARON, CRAIG R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q. GAO, MAOJUN ZENG, ANTHONY J. SAICH, LLOYD HILL, GARY F. LOCKE, HOWARD
W. KOCH, JR., KATHLEEN M. PAWLUS, and DALIAN WANDA GROUP CO., |
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Defendants, |
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and |
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AMC
ENTERTAINMENT HOLDINGS, INC., |
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Nominal
Defendant. |
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[additional
caption on next page]
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
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LORRA
MANUEL, Derivatively on Behalf of Nominal Defendant AMC ENTERTAINMENT HOLDINGS, INC., |
Case
No. 1:20-cv-02456-ALC |
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Plaintiff, |
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v. |
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ADAM
M. ARON, CRAIG R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q. GAO, LLOYD L. HILL, HOWARD W. KOCH, JR., GARY F. LOCKE, KATHLEEN M.
PAWLUS, ANTHONY J. SAICH, and MAOJUN ZENG, |
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Defendants, |
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and |
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AMC
ENTERTAINMENT HOLDINGS, INC., |
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Nominal
Defendant. |
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[additional caption on next
page]
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
DAVID
DINKEVICH and ANN CARTER, derivatively on behalf of AMC ENTERTAINMENT HOLDINGS, INC., |
Case
No. 1:20-cv-02870-ALC |
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Plaintiff, |
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v. |
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ADAM
M. ARON, CRAIG R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q. GAO, LLOYD HILL, HOWARD W. KOCH, JR., GARY F. LOCKE, KATHLEEN M. PAWLUS,
ANTHONY J. SAICH, and MAOJUN ZENG, |
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Defendants, |
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and |
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AMC
ENTERTAINMENT HOLDINGS, INC., |
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Nominal
Defendant. |
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NOTICE OF PENDENCY AND
PROPOSED SETTLEMENT OF STOCKHOLDER
DERIVATIVE MATTERS
| TO: | ALL RECORD HOLDERS
AND BENEFICIAL OWNERS OF AMC ENTERTAINMENT HOLDINGS, INC. (“AMC” OR THE “COMPANY”)
COMMON STOCK (TICKER SYMBOL: AMC) AS OF JUNE 14, 2023. |
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS
ENTIRETY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT AND DISMISSAL WITH PREJUDICE OF STOCKHOLDER DERIVATIVE LITIGATION AND CONTAINS
IMPORTANT INFORMATION REGARDING YOUR RIGHTS.
IF THE COURT APPROVES THE SETTLEMENT OF THE DERIVATIVE
MATTERS, AMC STOCKHOLDERS WILL BE FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT AND DISMISSAL WITH PREJUDICE,
AND FROM PURSUING RELEASED CLAIMS.
THIS ACTION IS NOT A “CLASS ACTION.”
THUS, THERE IS NO COMMON FUND UPON WHICH YOU CAN MAKE A CLAIM FOR A MONETARY PAYMENT. THERE IS NO PROOF OF CLAIM FORM FOR STOCKHOLDERS
TO SUBMIT IN CONNECTION WITH THIS SETTLEMENT, AND STOCKHOLDERS ARE NOT REQUIRED TO TAKE ANY ACTION IN RESPONSE TO THIS NOTICE.
PLEASE TAKE NOTICE that this action is being
settled on the terms set forth in a Stipulation of Settlement, dated June 14, 2023 (the “Stipulation”).
The Stipulation was entered into by and
among: (1) Plaintiff Naranbold Gantulga in the action captioned Gantulga v. Aron, et al., Case No. 1:18-cv-10007-ALC
(S.D.N.Y.) (the “Gantulga Action”), Plaintiff Jennifer Kenna in the action captioned Kenna v. Aron, et
al., Case No. 1:19-cv-09148-ALC (S.D.N.Y.) (the “Kenna Action”), Plaintiff Lorra Manuel in the action
captioned Manuel v. Aron, et al., Case No. 1:20-cv-02456-ALC (S.D.N.Y.) (the “ Manuel Action”), Plaintiffs
David Dinkevich and Ann Carter in the action captioned Dinkevich, et al. v. Aron, et al., Case No. 1:20-cv-02870-ALC
(S.D.N.Y.) (the “Dinkevich Action”), and Plaintiff John R. Lyon (together with Plaintiffs Gantulga, Kenna,
Manuel, Dinkevich, and Carter, “Plaintiffs”) in the action captioned Lyon v. Aron, et al., Case No.
1:21-cv-07940-ALC (S.D.N.Y.) (the “Lyon Action,” and together with the Gantulga, Kenna, Manuel,
and Dinkevich Actions, the “Derivative Actions”); (2) Defendants Adam M. Aron,
Craig R. Ramsey, Chris A. Cox, Lincoln Zhang, Jack Q. Gao, Maojun Zeng, Anthony J. Saich, Lloyd L. Hill, Gary F. Locke, Howard W.
Koch, Jr., Kathleen M. Pawlus, Phillip Lader, Lee E. Wittlinger, and Adam J. Sussman (collectively, the “Individual
Defendants”); and (3) Nominal Defendant AMC Entertainment Holdings, Inc. (“AMC” or the “Company,” and
together with the Individual Defendants, “Defendants” and each a “Defendant,” and together with Plaintiffs,
the “Parties” and each a “Party”).1
1 Dalian
Wanda Group Co. (“Wanda”) was named as a defendant in the Gantulga and Kenna Actions, but was not served with
process and did not become a party to either action. See, e.g., Murphy Bros. v. Michetti Pipe Stringing, Inc., 526 U.S.
344, 350 (1999) (“one becomes a party officially . . . only upon service of a summons or other authority-asserting measure”).
Therefore, Wanda is not a party to the Stipulation, but is nevertheless released pursuant to the terms of the Stipulation.
Unless otherwise defined in this Notice, all
capitalized terms used herein shall have the meanings set forth in the Stipulation.
WHAT
IS THE PURPOSE OF THIS NOTICE? |
| 1. | The
purpose of this Notice is to inform AMC stockholders of: |
| • | the
existence of the Derivative Actions in the United States District Court for the Southern
District of New York (the “Court”), which were brought on behalf of and for the
benefit of AMC, as well as the existence of the litigation demand Plaintiff Lyon made on
the AMC Board of Directors (the “Lyon Litigation Demand”); |
| • | the
proposed settlement (the “Settlement”) between Plaintiffs and Defendants reached
to resolve the Derivative Actions and the Lyon Litigation Demand (collectively, the “Derivative
Matters”), subject to Court approval, as provided in the Stipulation; |
| • | the
hearing to be held by the Court on _________ __, 2023 to consider the fairness, reasonableness,
and adequacy of the Settlement and dismissal of the Derivative Actions with prejudice; |
| • | Plaintiffs’
Counsel’s application to the Court for an award of attorneys’ fees and expenses
(the “Fee and Expense Award”); and |
| • | Plaintiffs’
Counsel’s application to the Court for service awards to the Plaintiffs (the “Service
Awards”). |
2.
This Notice explains the Derivative Matters and the terms of the Settlement, and describes what
steps you may take in relation to the Settlement. This Notice is not an expression of any opinion by the Court about the truth or merits
of Plaintiffs’ claims or Defendants’ defenses. This Notice is solely to advise you of the Settlement of the Derivative Matters
and of your rights in connection with the Settlement.
3.
The Stipulation and the Settlement, subject to the approval of the Court, are intended by the Parties
to completely, fully, finally, and forever release, relinquish, settle, and discharge the Released Claims and result in the complete
dismissal of the Derivative Actions with prejudice, upon the terms and subject to the conditions set forth in the Stipulation. The Settlement
is the product good faith and arm’s-length settlement negotiations conducted over the course of more than a year and overseen by
an experienced mediator. The Settlement requires AMC to adopt
certain corporate governance reforms (the “Reforms”),
as outlined in Exhibit A to the Stipulation and summarized below.
4.
This Notice is a summary only and does not describe all of the details of the Stipulation. For full details of the matters discussed
in this Notice, please see the full Stipulation and its exhibits posted on AMC’s website, [to be inserted once Scheduling Order
is entered], contact Plaintiffs’ Counsel at the addresses listed below, or inspect the full Stipulation filed with the Court.
WHAT
ARE THE DERIVATIVE MATTERS ABOUT? |
WHAT
HAS HAPPENED SO FAR? |
THE FOLLOWING DESCRIPTION OF THE DERIVATIVE MATTERS
AND THE SETTLEMENT HAS BEEN PREPARED BY COUNSEL FOR THE PARTIES. THE COURT HAS MADE NO FINDINGS WITH RESPECT TO SUCH MATTERS, AND THIS
NOTICE DOES NOT CONSTITUTE FINDINGS OF THE COURT AND SHOULD NOT BE UNDERSTOOD AS AN EXPRESSION OR STATEMENT OR OPINION OF THE COURT AS
TO THE MERITS OF ANY OF THE PARTIES’ CLAIMS OR DEFENSES.
5.
The Derivative Matters are brought on behalf of AMC and assert claims based on the allegations in a related, putative securities
class action captioned Hawaii Structural Ironworkers Pension Trust Fund v. AMC Entertainment Holdings, Inc., et al., Case No.
1:18-cv-00299-AJN (S.D.N.Y.) (the “Securities Class Action”). The Securities Class Action asserted claims against AMC, certain
of AMC’s officers and directors, and the underwriters of AMC’s February 8, 2017 secondary public offering (the “Secondary
Public Offering”) based on alleged material misstatements and omissions in the registration statement for the secondary public
offering and certain other public disclosures. The Derivative Matters assert that Defendants violated the federal securities laws and/or
breached their fiduciary duties by making or permitting the Company to allegedly make materially false statements or omissions about
AMC’s business, operations, and prospects following three acquisitions. In an effort to deleverage after the acquisitions, Plaintiffs
contend that Defendants caused AMC to disseminate allegedly false and misleading statements in connection with the Secondary Public Offering
and certain other public disclosures. The Derivative Matters assert that on August 1, 2017, AMC issued a press release announcing disappointing
financial results for the period ended June 30, 2017, which Plaintiffs contend revealed that previously issued positive statements about
the acquisitions were false.
6.
On November 1, 2021, the parties to the Securities Class Action signed a stipulation of settlement to resolve the Securities Class
Action for $18.0 million. AMC and the other defendants in the Securities Class Action agreed to the settlement and the payment of the
settlement amount to eliminate the distraction, burden, expense, and uncertainty of further litigation. AMC and the other defendants
continue to expressly deny any liability or wrongdoing with respect to the matters alleged in the Securities Class Action. On February
14, 2022, the court in the Securities Class Action issued a final judgment approving the settlement and dismissing the Securities Class
Action.
Gantulga Action
7.
On May 21, 2018, Plaintiff Gantulga commenced the Gantulga Action in the United States District
Court for the District of Kansas on behalf of AMC against Defendants Aron, Ramsey, Cox, Zhang, Gao, Zeng, Saich, Hill, Locke, Koch, and
Pawlus, asserting claims for violations of Section 14(a) of the Securities and Exchange Act of 1934 (the “Exchange Act”),
breach of fiduciary duty, and unjust enrichment. The Gantulga Action alleges that making a demand on AMC’s Board of Directors
(the “Board”) to institute the claims pled in the Gantulga Action would have been futile. The defendants in the Gantulga
Action maintain that demand would not have been futile.
8.
On August 27, 2018, the defendants in the Gantulga Action filed a motion to dismiss or, in
the alternative, to transfer the Gantulga Action to the Court.
9.
On September 10, 2018, Plaintiff Gantulga opposed the defendants’ motion.
10.
On September 17, 2018, Plaintiff Gantulga filed an Amended Complaint that named Wanda as a defendant
and mooted the pending motion.
11.
On October 12, 2018, the parties filed a joint motion to transfer the Gantulga Action to
the Court.
12.
On October 15, 2018, the United States District Court for the District of Kansas granted the parties’
joint motion to transfer the Gantulga Action to the Court.
13.
On November 8, 2018, Plaintiff Gantulga and the defendants in the Gantulga Action filed a
stipulation to stay the Gantulga Action, given the pendency of the Securities Class Action, which the Court granted on December
17, 2018.
14.
On March 30, 2020, the Court entered a stipulated protective order to govern discovery in the Gantulga
Action.
15.
On January 10, 2022, pursuant to the terms of the order staying the Gantulga Action, Plaintiff
Gantulga provided written notice to the defendants in the Gantulga Action that the stay would be lifted as of February 9, 2022.
16.
On April 10, 2022, the Gantulga Action was reassigned from Judge Alison J. Nathan to Judge
Andrew L. Carter, Jr.
Kenna Action
17.
On October 2, 2019, Plaintiff Kenna commenced the Kenna Action in the Court on behalf of AMC against Defendants Aron, Ramsey,
Cox, Zhang, Gao, Zeng, Saich, Hill, Locke, Koch, and Pawlus, and Wanda, asserting claims for violations of Section 14(a) of the Exchange
Act, breach of fiduciary duty, and unjust enrichment. The Kenna Action alleges that making a demand on the Board to institute
the claims pled in the Kenna Action would have been futile. The defendants in the Kenna Action maintain that demand would
not have been futile.
18.
On October 15, 2019, Plaintiff Kenna and the defendants in the Kenna Action filed a stipulation
to stay the Kenna Action, given the pendency of the Securities Class Action, which the Court granted on October 17, 2019.
19.
On March 26, 2020, the Court entered a stipulated protective order to govern discovery in the Kenna
Action.
20.
On April 20, 2020, Plaintiff Kenna filed an Amended Complaint asserting claims for violations of
Sections 10(b), 14(a), and 21D of the Exchange Act, breach of fiduciary duty, and unjust enrichment. The Amended Complaint included information
gleaned from documents the Company produced to Plaintiff Kenna pursuant to the order staying the Kenna Action.
21.
On January 10, 2022, pursuant to the terms of the order staying the Kenna Action, Plaintiff
Kenna provided written notice to the defendants in the Kenna Action that the stay would be lifted as of February 9, 2022.
22.
On April 10, 2022, the Kenna Action was reassigned from Judge Alison J. Nathan to Judge Andrew
L. Carter, Jr.
Manuel Action
23.
On March 20, 2020, Plaintiff Manuel commenced the Manuel Action in the Court on behalf of
AMC against Defendants Aron, Ramsey, Cox, Zhang, Gao, Zeng, Saich, Hill, Locke, Koch, and Pawlus, asserting claims for violations of
Sections 10(b), 21D, and 29(B) of the Exchange Act and breach of fiduciary duty. The Manuel Action alleges that making a demand
on the Board to institute the claims pled in the Manuel Action would have been futile. The defendants in the Manuel Action
maintain that demand would not have been futile.
24.
On May 12, 2020, Plaintiff Manuel and defendants in the Manuel Action filed a stipulation
to stay the Manuel Action, given the pendency of the Securities Class Action, which the Court granted on May 18, 2020.
25.
On June 25, 2020, the Court entered a stipulated protective order to govern discovery in the Manuel
Action.
26.
On April 7, 2022, the Manuel Action was reassigned from Judge Alison J. Nathan to Judge Andrew
L. Carter, Jr.
Dinkevich Action
27.
On October 14, 2019, Plaintiff Dinkevich made a demand on AMC pursuant to 8 Del. C. §
220 to inspect certain of AMC’s non-public books and records (the “Dinkevich 220 Demand”).
28.
On March 27, 2020, AMC produced certain books and records to Plaintiff Dinkevich in response to
the Dinkevich 220 Demand. Plaintiff Dinkevich’s counsel, who also represents Plaintiff Carter, requested, and AMC agreed, that
Plaintiff Carter could also review the books and records produced in response to the Dinkevich 220 Demand.
29.
On April 7, 2020, Plaintiffs Dinkevich and Carter commenced the Dinkevich Action in the Court
on behalf of AMC against Defendants Aron, Ramsey, Cox, Zhang, Gao, Zeng, Saich, Hill, Locke, Koch, and Pawlus, asserting claims for violations
of Sections 10(b), 21D, and 29(B) of the Exchange Act, breach of fiduciary duty, and unjust enrichment. The Dinkevich Action,
which incorporated the non-public records produced by AMC in response to the Dinkevich 220 Demand, alleges that making a demand on the
Board to institute the claims pled in the Dinkevich Action would have been futile. The defendants in the Dinkevich Action
maintain that demand would not have been futile.
30.
On June 17, 2020, Plaintiffs Dinkevich and Carter and the defendants in the Dinkevich Action
filed a stipulation to stay the Dinkevich Action, given the pendency of the Securities Class Action, which the Court granted on
June 25, 2020.
31.
On August 4, 2020, the Court entered a stipulated protective order to govern discovery in the Dinkevich
Action.
32.
On December 8, 2021, Plaintiffs Dinkevich and Carter provided written notice to defendants of their
intention to lift the stay in the Dinkevich Action, and on January 7, 2022, filed a notice with the Court to lift the stay.
33.
On January 11, 2022, the Court lifted the stay of the Dinkevich Action.
34.
On April 10, 2022, the Dinkevich Action was reassigned from Judge Alison J. Nathan to Judge
Andrew L. Carter, Jr.
The Lyon Litigation Demand and the Lyon Action
35.
On February 3, 2020, Plaintiff Lyon made a demand on AMC pursuant to 8 Del. C. § 220 to
inspect certain of AMC’s non-public books and records (the “Lyon 220 Demand”).
36.
On July 15, 2020, Plaintiff Lyon made a litigation demand on the Board.
37.
On September 30, 2020, Plaintiff Lyon was informed that the Board voted unanimously not to pursue
the claims in his litigation demand at that time.
38.
On September 23, 2021, Plaintiff Lyon commenced the Lyon Action in this Court on behalf of
AMC against Defendants Aron, Ramsey, Cox, Zhang, Gao, Hill, Locke, Koch, Pawlus, Saich, Zeng, Lader, Wittlinger, and Sussman, asserting
claims for contribution and indemnification under Sections 10(b) and 21D of the Exchange Act, breach of fiduciary duty, waste of corporate
assets, and unjust enrichment/constructive trust. The Lyon Action alleges that the Board wrongfully refused Plaintiff Lyon’s
litigation demand. The defendants in the Lyon Action maintain that the Board properly refused Plaintiff Lyon’s litigation
demand.
39.
On January 14, 2022, the defendants in the Lyon Action filed a motion to dismiss the Lyon
Action.
40.
On April 7, 2022, the Lyon Action was reassigned from Judge Alison J. Nathan to Judge Andrew
L. Carter, Jr.
41.
On March 21, 2023, the Court entered an Opinion and Order granting defendants’ motion to dismiss
as to Plaintiff Lyon’s contribution and indemnification claims under Sections 10(b) and 21D of the Exchange Act, which formed the
basis for the Court’s subject matter jurisdiction, because the settlement of the related Securities Class Action had received final
approval without a finding of liability. The Court further declined to exercise supplemental jurisdiction over Plaintiff Lyon’s
remaining state law claims, and thus did not reach the merits of those claims.
42.
Plaintiff Lyon was preparing to re-file a complaint based on his state law claims in the Delaware
Court of Chancery at the time the Stipulation was executed.
Settlement and Settlement Hearing
43.
On November 18, 2020 and November 19, 2020, certain parties to the Derivative Matters participated
in a mediation (the “Mediation”) before David Geronemus, Esq. of JAMS (the “Mediator”). Prior to the Mediation,
certain Plaintiffs submitted mediation statements and settlement demands to the Mediator. The Mediation, however, did not result in a
settlement. Thereafter, the Parties continued to negotiate at arm’s-length and with the Mediator’s assistance, including
by Plaintiffs sending a global settlement demand to the Defendants on October 27, 2021 that included a comprehensive corporate governance
reforms proposal. Ultimately, on June 21, 2022, the Parties reached an agreement in principle on the material terms of the Settlement,
including the Reforms that AMC would adopt as consideration for the Settlement, set forth in full in Exhibit A to the Stipulation.
44.
On ____________, 2023, the Court entered the Scheduling Order in connection with the Settlement,
which, among other things, authorized this Notice and scheduled the Settlement Hearing to consider whether to grant final approval of
the Settlement.
WHAT
ARE THE PRINCIPAL TERMS OF THE SETTLEMENT? |
45.
In consideration of the full settlement, satisfaction, compromise, and release of the Released Plaintiff Claims (defined in Paragraph
50 below) against the Released Defendant Persons (defined in Paragraph 50 below) and the Released Defendant Claims (defined in Paragraph
50 below) against the Released Plaintiff Persons (defined in Paragraph 50 below), and the dismissal with prejudice of the Derivative
Actions, the Parties have agreed to the Reforms set forth in Exhibit A to the Stipulation. The Reforms provide that, among other things,
AMC is required to: (i) appoint one new independent director to its Board; (ii) make improvements to its Nominating and Corporate Governance
Committee Charter relating to the screening of prospective director nominees; (iii) make improvements to its Compensation Committee Charter
by obligating the committee to consider legal compliance and compliance with AMC’s internal policies in making decisions relating
to short-term compensation, termination benefits, and separation pay; and (iv) increase compliance training for certain AMC accounting
personnel. After the Parties reached an agreement in principle on the material terms of the Settlement on June 21, 2022, but before the
Parties executed the formal Stipulation of Settlement, AMC appointed a new independent director, Denise “Dee” Clark, who
joined the Board effective January 1, 2023, and made the improvements
to its Nominating and Corporate Governance Committee and Compensation
Committee Charters set forth in the Reforms.
WHAT
ARE THE PARTIES’ REASONS FOR THE SETTLEMENT? |
46.
Plaintiffs believe that their derivative claims have merit, and Plaintiffs’ entry into the Settlement is not intended to be and
shall not be construed as an admission or concession concerning the relative strength or merit of the claims alleged in the Derivative
Matters. However, Plaintiffs and Plaintiffs’ Counsel recognize and acknowledge the significant risk, expense, and length of continued
proceedings necessary to prosecute the derivative claims against the Individual Defendants through trial(s) and possible appeal(s). Plaintiffs’
Counsel also have taken into account the uncertain outcome and the risk of any litigation, especially in complex cases like the Derivative
Matters, as well as the difficulties, significant risks, and delays inherent in such litigation. Plaintiffs’ Counsel are also mindful
of the inherent problems of establishing standing in derivative litigation, and the possible defenses to the claims alleged in the Derivative
Matters.
47. In
consideration of these matters, Plaintiffs and Plaintiffs’ Counsel have determined that it is in the best interests of AMC and
its current stockholders that the Derivative Matters be fully and finally settled in the manner and upon the terms and conditions set
forth in the Stipulation, and that these terms and conditions are fair, reasonable, and adequate.
48.
Defendants have denied, and continue to deny, all allegations of wrongdoing, fault, liability, or damages with respect to the Released
Plaintiff Claims, including, but not limited to, any allegations that Defendants have committed any violations of the Exchange Act or
other law, have breached any duty owed to AMC or its stockholders, have acted improperly in any way, have any liability or owe any damages
of any kind to AMC or its stockholders, and/or were unjustly enriched. Defendants maintain that their conduct was at all times proper,
in the best interests of AMC and its stockholders, and in compliance with applicable law. Defendants also deny that AMC or its stockholders
were harmed by any conduct of Defendants that was alleged or could have been alleged in the Derivative Matters. Each of the Individual
Defendants asserts that, at all relevant times, he or she acted in good faith and in a manner believed to be in the best interests of
AMC and all of its stockholders. Nonetheless, Defendants are entering into the Settlement solely to eliminate the burden, expense, and
uncertainties inherent in further litigation, and without admitting the validity of any allegations made in the Derivative Matters or
any liability with respect thereto, having concluded that it is desirable for the Derivative Matters to be fully and finally settled
and dismissed in the manner and upon the terms and conditions set forth in the Stipulation.
49. For
the avoidance of doubt, nothing in the Stipulation or the Settlement shall be construed as an admission by Defendants of any wrongdoing,
fault, liability, or damages whatsoever.
WHAT
WILL HAPPEN IF THE SETTLEMENT IS APPROVED? |
WHAT
CLAIMS WILL THE SETTLEMENT RELEASE? |
50.
If the Settlement is approved, the Court will enter the Order and Final Judgment. Pursuant to the Order and Final Judgment, upon the
Effective Date of the Settlement, the Derivative Actions will be dismissed with prejudice and the following releases will occur:
Release of Claims
by Plaintiffs: AMC, the Released Plaintiff Persons (individually and derivatively on behalf of AMC), and each and every stockholder
of AMC, derivatively on behalf of AMC, shall completely, fully, finally, and forever release, relinquish, settle, and discharge his,
her, or its right to assert any or all of the Released Plaintiff Claims (including Unknown Claims) against any of the Released Defendant
Persons, and shall be forever barred and enjoined from commencing, asserting, instituting, or in any way participating in the commencement
or prosecution of any action or other proceeding, in any forum, involving any of the Released Plaintiff Claims against any of the Released
Defendant Persons.
Release of Claims
by Defendants: AMC and the Released Defendant Persons each shall completely, fully, finally, and forever release, relinquish, settle,
and discharge his, her, or its right to assert any or all of the Released Defendant Claims (including Unknown Claims) against any of
the Released Plaintiff Persons, and shall be forever barred and enjoined from commencing, asserting, instituting, or in any way participating
in the commencement or prosecution of any action or other proceeding, in any forum, involving any of the Released Defendant Claims against
any of the Released Plaintiff Persons.
“Released
Defendant Claims” means any and all manner of claims, demands, rights, liabilities, losses, obligations, duties, damages, costs,
debts, expenses, interest, penalties, sanctions, fees, attorneys’ fees, actions, potential actions, causes of action, suits, agreements,
judgments, decrees, matters, counterclaims, offsets, issues, and controversies of any kind, nature, or description whatsoever, whether
accrued or unaccrued, disclosed or undisclosed, apparent or not apparent, foreseen or unforeseen, matured or not matured, suspected or
unsuspected, liquidated or not liquidated, fixed or contingent, whether based on state, local, federal, statutory, regulatory, common,
or other law or rule, including known claims and Unknown Claims, which any Defendant ever had, now has, or may have against any of the
Released Plaintiff Persons that arise out of, are based upon, or relate to the institution, prosecution, or settlement of the claims
asserted in the Derivative Matters. For the avoidance of doubt, the Released Defendant Claims shall not include any claims to enforce
the Stipulation or the Settlement.
“Released
Defendant Persons” means all persons and entities named as a defendant in the Derivative Actions or that could have been named
as a defendant in the Derivative Matters, including, without limitation, the Company’s past and present officers and directors,
as well as any and all of the respective current and former employers, parent entities, controlling persons, owners, members, co-investors,
lenders, principals, affiliates, or subsidiaries of any of the foregoing, and each and all of the respective past or present officers,
directors, managers, partners, limited partners, general partners, stockholders, representatives, employees, attorneys, financial or
investment advisors, consultants, accountants, investment bankers, commercial bankers, agents,
heirs, executors,
trustees, personal representatives, estates, administrators, predecessors, successors, assigns, insurers, and reinsurers of any of the
foregoing.
“Released
Plaintiff Claims” means any and all manner of claims, demands, rights, liabilities, losses, obligations, duties, damages, costs,
debts, expenses, interest, penalties, sanctions, fees, attorneys’ fees, actions, potential actions, causes of action, suits, agreements,
judgments, decrees, matters, counterclaims, offsets, issues, and controversies of any kind, nature, or description whatsoever, whether
accrued or unaccrued, disclosed or undisclosed, apparent or not apparent, foreseen or unforeseen, matured or not matured, suspected or
unsuspected, liquidated or not liquidated, fixed or contingent, whether based on state, local, federal, statutory, regulatory, common,
or other law or rule, including known claims and Unknown Claims, that (a) were asserted in the Derivative Matters, or (b) Plaintiffs
(individually or derivatively on behalf of AMC) or AMC ever had, now have, or hereafter can, shall, or may have that, in full or in part,
concern, relate to, arise out of, or are in any way connected to the claims, allegations, transactions, facts, circumstances, events,
acts, disclosures, statements, representations, omissions, or failures to act alleged, set forth, referred to, or involved in the Derivative
Matters. For the avoidance of doubt, the Released Plaintiff Claims shall not include any claims to enforce the Stipulation or the Settlement.
“Released
Plaintiff Persons” means Plaintiffs and any and all of their respective current and former employers, parent entities, controlling
persons, owners, members, principals, affiliates, or subsidiaries, and each and all of their respective past or present officers, directors,
managers, partners, limited partners, general partners, stockholders, representatives, employees, attorneys, financial or investment
advisors, consultants, accountants, investment bankers, commercial bankers, agents, heirs, executors, trustees, personal representatives,
estates, administrators, predecessors, successors, assigns, insurers, and reinsurers.
“Unknown
Claims” means any claims that a Party does not know or suspect to exist in his, her, or its favor at the time of the release of
such claims, which, if known by him, her, or it, might have affected his, her, or its decision(s) with respect to the Settlement. With
respect to any and all Released Plaintiff Claims and Released Defendant Claims, the Parties stipulate and agree that, upon the Effective
Date of the Settlement, the Parties shall expressly waive any and all provisions, rights, and benefits conferred by any law of any state
or territory of the United States, or principle of common law or foreign law, which is similar, comparable, or equivalent to California
Civil Code §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. | |
The Parties acknowledge
that the foregoing waiver was separately bargained for and a key element of the Settlement. The Parties may hereafter discover facts
in addition to or different from those that they now know or believe to be true with respect to the Released Claims, but, upon the
Effective Date,
the Parties shall be deemed to have, and by operation of the Order and Final Judgment shall have, fully, finally, and forever settled
and released any and all Released Claims known or unknown, suspected or unsuspected, contingent or non-contingent, accrued or unaccrued,
which now exist, heretofore have existed, or may in the future exist, upon any theory of law or equity, from the beginning of time through
the date of execution of the Stipulation, without regard to the subsequent discovery or existence of such different or additional facts.
51.
The Effective Date of the Settlement will be the first date upon which the following conditions of the Settlement have been met or waived:
(i) Court approval of this Notice, and subsequent dissemination of this Notice; (ii) the Court has approved the Settlement, following
dissemination of the Notice to AMC stockholders and a hearing, and entered the Order and Final Judgment, approving the Settlement, dismissing
the Derivative Actions with prejudice, and entering the Releases, without awarding costs to any party, except as provided in the Settlement;
and (iii) the passing of the date upon which the Order and Final Judgment becomes Final.
HOW
WILL PLAINTIFFS’ COUNSEL BE PAID? |
52. Plaintiffs’
Counsel have not received any payment for their services in pursuing the claims asserted in the Derivative Matters, nor have Plaintiff’s
Counsel been reimbursed for their out-of-pocket expenses. Plaintiffs’ Counsel will apply to the Court for a Fee and Expense Award.
The Parties have agreed to a Fee and Expense Award, which AMC’s directors’ and officers’ insurance carriers shall pay
to Plaintiffs’ Counsel of one million dollars ($1,000,000.00), in full satisfaction of any and all claims for attorneys’
fees or expenses that have been, could have been, or could be asserted by Plaintiffs’ Counsel or any other counsel in connection
with the Derivative Matters.
53. It
is not a condition of the Stipulation, the Settlement, or the Order and Final Judgment that the Court award any attorneys’ fees
or expenses to Plaintiffs’ Counsel. The Court may consider and rule upon the fairness, reasonableness, and adequacy of the Settlement
independently of the Fee and Expense Award. In the event that the Court does not award attorneys’ fees or expenses, or in the event
the Court makes an award in an amount that is less than the amount requested by Plaintiffs’ Counsel or is otherwise unsatisfactory
to Plaintiffs’ Counsel, or in the event that any such award is vacated or reduced on appeal, the Settlement, including the effectiveness
of the Releases and other obligations of the Parties, nevertheless shall remain in full force and effect.
54.
Plaintiffs’ Counsel may apply to the Court for Service Awards of up to two thousand dollars ($2,000.00) for each of Plaintiffs,
only to be paid upon Court approval, and to be paid from the Fee and Expense Award in recognition of Plaintiffs’ participation
and effort in the prosecution of the Derivative Matters. Defendants shall not oppose Plaintiffs’ Counsel’s application for
the Service Awards. The failure of the Court to approve any Service Award, in whole or in part, shall have no effect on the Settlement,
and the effectiveness of the Releases and other obligations of the Parties set forth in the Stipulation nevertheless shall remain in
full force and effect.
WHEN
AND WHERE WILL THE SETTLEMENT HEARING BE HELD? |
DO
I HAVE THE RIGHT TO APPEAR AT THE SETTLEMENT HEARING? |
MAY
I OBJECT TO THE SETTLEMENT AND SPEAK AT THE HEARING IF I DO |
NOT
LIKE THE SETTLEMENT? |
55. On
_________ __, 2023, the Court entered an order preliminarily approving the Stipulation and the Settlement contemplated therein (the “Scheduling
Order”) and providing for notice of the Settlement to be made to AMC stockholders. The Scheduling Order further provides that the
Court will hold a hearing (the “Settlement Hearing”) on ________ __, 2023 at __:__ _.m. before the Honorable Andrew L. Carter,
Jr., at the U.S. District Court for the Southern District of New York, 40 Foley Square, Courtroom 1306, New York, New York 10007, for
the following purposes: (a) to determine whether the Settlement on the terms and conditions provided for in the Stipulation is fair,
reasonable, and adequate to AMC and its stockholders, and should be approved by the Court; (b) to determine whether the Order and Final
Judgment, substantially in the form attached as Exhibit D to the Stipulation, should be entered, dismissing the Derivative Actions with
prejudice against Defendants, and fully and finally releasing all Released Claims against the Released Persons; (c) to determine whether
the agreed-to Fee and Expense Award, as well as the Service Awards, should be approved; (d) to consider any objections to the Settlement,
the Fee and Expense Award, and/or the Service Awards; and (e) to consider any other matters that may properly be brought before the Court
in connection with the Settlement. AMC stockholders do not need to attend the Settlement Hearing.
56.
The Court may, in its discretion, change the date and/or time of the Settlement Hearing without further notice to you. The Court reserves
the right to adjourn and reconvene the Settlement Hearing or any adjournment thereof, including the consideration of the Fee and Expense
Award, as well as the Service Awards, without further notice of any kind other than oral announcement at the Settlement Hearing or any
adjournment thereof. The Court further reserves the right to hold the Settlement Hearing telephonically or by videoconference without
further notice to AMC stockholders. Any AMC stockholder (or his, her, or its counsel) who wishes to appear at (or otherwise attend) the
Settlement Hearing should consult the Court’s calendar and/or AMC’s website, [to be inserted once Scheduling Order is entered],
for any change in date, time, or format of the Settlement Hearing. The Court may approve the Settlement and any of its terms, with such
modifications as may be agreed to by the Parties, if appropriate, without further notice to AMC’s stockholders. You may also confirm
the date and time of the Settlement Hearing by contacting Plaintiffs’ Counsel as indicated in Paragraph 58 below.
57.
Any AMC stockholder who or which continues to own AMC shares as of June 14, 2023, the date of the Settlement Hearing, who wishes to object
to the fairness, reasonableness, or adequacy of the Settlement as set forth in the Stipulation, or to the Fee and Expense Award and/or
or Service Awards, may file with the Court a written objection.
58.
An objector must, at least twenty-one (21) calendar days prior to the Settlement Hearing, file with the Clerk of the Court and serve
(either by hand delivery or by first class mail) upon the below listed counsel a written objection to the Settlement, which must: (a)
state the name, address, and telephone number of the objector, and, if represented by counsel, the name, address,
and telephone
number of his, her, or its counsel; (b) be signed by the objector; (c) state that the objection is being filed with respect to the Derivative
Matters; (d) set forth a specific, written statement of the objection(s), the nature of the objection(s), and the specific reason(s)
for the objection(s), including any legal and evidentiary support the objector wishes to bring to the Court’s attention; (e) provide
proof of ownership of AMC common stock as of June 14, 2023, including the number of shares of AMC common stock held and the date of purchase
or acquisition, and contain a statement that the objector continues to hold shares of AMC common stock as of the date of the filing of
any such objection and will continue to hold shares of AMC common stock as of the date of the Settlement Hearing; and (f) provide any
and all documentation or evidence in support of such objection. In addition, if intending to appear and requesting to be heard at the
Settlement Hearing, he, she, or it must, in addition to the requirements of above, file with the Clerk of the Court and serve (either
by hand delivery or by first class mail) upon the below listed counsel a written notice of his, her, or its intention to appear at the
Settlement Hearing, identifying therein any witnesses he, she, or it intends to call at the Settlement Hearing and a statement as to
the subjects of their testimony, and any and all evidence that he, she, or it intends to present at the Settlement Hearing. Any objector
who does not timely file and serve a notice of intention to appear in accordance with this paragraph shall be foreclosed from raising
any objection to the Settlement and shall not be permitted to appear at the Settlement Hearing, except for good cause shown.
IF
YOU MAKE A WRITTEN OBJECTION, IT MUST BE RECEIVED BY THE CLERK OF THE COURT NO LATER THAN ________ __, 2023. The Clerk’s address
is:
Clerk
of the Court,
U.S.
District Court for the Southern District of New York,
40
Foley Square
New
York, NY 10007
YOU
ALSO MUST DELIVER COPIES OF THE MATERIALS TO PLAINTIFFS’ COUNSEL SO THEY ARE RECEIVED NO LATER THAN ________ __, 2023. Plaintiffs’
Counsel’s addresses are:
THE
BROWN LAW FIRM, P.C. |
SCHUBERT
JONCKHEER & KOLBE LLP |
Timothy
Brown |
Willem
F. Jonckheer |
767 Third
Avenue, Suite 2501 |
2001
Union Street, Suite 200 |
New York,
NY 10017 |
San Francisco,
CA 94123 |
Tel:
(516) 922-5427 |
Tel:
(415) 788-4220 |
Fax:
(516) 344-6204 |
Fax:
(415) 788-0161 |
Email:
tbrown@thebrownlawfirm.net |
Email:
wjonckheer@sjk.law |
|
|
Counsel
for Plaintiff Naranbold Gantulga |
Counsel
for Plaintiff Lorra Manuel |
|
|
THE ROSEN
LAW FIRM, P.A. |
SHUMAN,
GLENN & STECKER |
Phillip
Kim |
Brett
D. Stecker |
275 Madison
Avenue, 40th Floor |
326 W.
Lancaster Avenue |
New York,
NY 10016 |
Ardmore,
PA 19003 |
Tel.:
(212) 686-1060 |
Tel.:
(303) 861-3003 |
Fax:
(212) 202-3827 |
Fax:
(303) 536-7849 |
Email:
pkim@rosenlegal.com |
Email:
brett@shumanlawfirm.com |
|
|
Counsel
for Plaintiffs Jennifer Kenna and |
Counsel
for Plaintiff David Dinkevich and |
Naranbold
Gantulga |
Ann
Carter |
KAHN
SWICK & FOTI, LLC
Melinda
Nicholson
1100
Poydras Street – Suite 960
New
Orleans, LA 70163
Tel.:
(504) 455-1400
Fax:
(504) 455-1498-
Email:
Melinda.Nicholson@ksfcounsel.com
Counsel
for Plaintiff John R. Lyon III
59. An
objector may file an objection on his, her, or its own or through an attorney hired at his, her, or its own expense. If an objector hires
an attorney to represent him, her, or it for the purposes of making such objection, the attorney must serve (either by hand delivery
or by first class mail) a notice of appearance on the counsel listed above and file such notice with the Court no later than twenty-one
(21) calendar days before the Settlement Hearing. Any AMC stockholder who does not timely file and serve a written objection complying
with the above terms shall be deemed to have waived, and shall be foreclosed from raising, any objection to the Settlement, and any untimely
objection shall be barred.
60.
Unless the Court orders otherwise, any person or entity who or which does not make his, her, or its objection in the manner set forth
above will be: (i) deemed to have waived and forfeited his, her, or its right to object to any aspect of the Settlement, the Order and
Final Judgment, the Fee and Expense Award, or the Service Awards; (ii) forever barred and foreclosed from objecting to the fairness,
reasonableness, or adequacy of the Settlement, the Stipulation, the Order and Final Judgment to be entered approving the Settlement,
the Fee and Expense Award, or the Service Awards; and (iii) deemed to have waived and be forever barred and foreclosed from being heard,
in this or any other suit, action, or proceeding (including, without limitation, any right of appeal), with respect to any matters concerning
the Settlement, the Stipulation, the Order and Final Judgment, the Fee and Expense Award, or the Service Awards.
AMC
STOCKHOLDERS AS OF JUNE 14, 2023 WHO HAVE NO OBJECTION
TO THE SETTLEMENT DO NOT NEED TO APPEAR AT THE SETTLEMENT
HEARING OR TAKE ANY OTHER ACTION.
WHAT
IS THE EFFECT OF THE SETTLEMENT? |
61.
Pending the Court’s determination as to final approval of the Settlement, (i) all proceedings in the Derivative Actions, other
than proceedings as may be necessary to carry out the terms and conditions of the Stipulation, have been stayed until otherwise ordered
by the Court; (ii) Plaintiffs (individually or derivatively on behalf of AMC), and all other AMC stockholders (derivatively on behalf
of AMC) are barred and enjoined from commencing, asserting, instituting, or in any way participating in the commencement or prosecution
of any action or other proceeding,
in any forum, involving
any of the Released Claims against any of the Released Persons; and (iii) Defendants are barred and enjoined from commencing, asserting,
instituting, or in any way participating in the commencement or prosecution of any action or other proceeding, in any forum, involving
any of the Released Claims against any of the Released Persons.
62.
As of the Effective Date, the Parties shall be finally and forever bound by the Settlement and the Order and Final Judgment. The Order
and Final Judgment, including, without limitation, the releases set forth above, shall have res judicata, collateral estoppel,
and all other preclusive effects in all pending and future lawsuits, arbitrations, or other suits, actions, or proceedings involving
any of the Released Persons.
WHO
SHOULD I CONTACT IF I HAVE QUESTIONS? |
63.
This Notice does not purport to be a comprehensive description of the Derivative Matters, the allegations related thereto, the terms
of the Settlement, or the Settlement Hearing. This Notice is a summary description of the Derivative Matters, the complaints in the Derivative
Actions, the terms of the Settlement, and the Settlement Hearing. For a more detailed statement of the matters involved in the Derivative
Matters, reference is made to the Stipulation and its exhibits, copies of which may be reviewed and downloaded at (to be inserted once
Scheduling Order is entered).
64.
You may obtain further information by contacting Plaintiffs’ Counsel at: (i) Timothy Brown, The Brown Law Firm, P.C., 767 Third
Avenue, Suite 2501, New York, NY 10017, Tel: (516) 922-5427, Email: tbrown@thebrownlawfirm.net; (ii) Phillip Kim, The Rosen Law Firm,
P.A., 275 Madison Avenue, 40th Floor, New York, NY 10016, Tel: (212) 686-1060, Email: pkim@rosenlegal.com; (iii) Willem F. Jonckheer,
Schubert Jonckheer & Kolbe LLP, 2001 Union Street, Suite 200, San Francisco, CA 94123, Tel: (415) 788-4220, Email: wjonckheer@sjk.law;
(iv) Brett D. Stecker, Shuman, Glenn & Stecker, 326 W. Lancaster Avenue, Ardmore, PA 19003, Tel: (303) 861-3003, Email: brett@shumanlawfirm.com;
or (v) Melinda Nicholson, Kahn Swick & Foti, LLC, 1100 Poydras Street – Suite 960, New Orleans, LA 70163, Tel: (504) 455-1400,
Email: Melinda.Nicholson@ksfcounsel.com.
Please
Do Not Call the Court or Defendants with Questions About the Settlement.
Dated: ____________, 2023
|
By the Order of the Court |
|
United States District Court |
|
for the Southern District of New York |
UNITED
STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
NARANBOLD
GANTULGA, derivatively on behalf of AMC ENTERTAINMENT HOLDINGS, INC., |
Case
No. 1:18-cv-10007-ALC |
|
|
Plaintiff, |
Exhibit D |
|
|
v. |
|
|
|
ADAM
M. ARON, CRAIG R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q. GAO, MAOJUN ZENG, ANTHONY J. SAICH, LLOYD HILL, GARY F. LOCKE, HOWARD
W. KOCH, JR., KATHLEEN M. PAWLUS, and DALIAN WANDA GROUP CO., |
|
|
|
Defendants, |
|
|
|
and |
|
|
|
AMC
ENTERTAINMENT HOLDINGS, INC., |
|
|
|
Nominal
Defendant. |
|
|
|
[additional
caption on next page]
UNITED
STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
JENNIFER
KENNA, derivatively on behalf of AMC ENTERTAINMENT HOLDINGS, INC., |
Case
No. 1:19-cv-09148-ALC |
|
|
|
Plaintiff, |
|
|
|
v. |
|
|
|
ADAM
M. ARON, CRAIG R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q. GAO, MAOJUN ZENG, ANTHONY
J. SAICH, LLOYD HILL, GARY F. LOCKE, HOWARD W. KOCH, JR., KATHLEEN M. PAWLUS, and DALIAN
WANDA GROUP CO., |
|
|
|
Defendants, |
|
|
|
and |
|
|
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AMC
ENTERTAINMENT HOLDINGS, INC., |
|
|
|
Nominal
Defendant. |
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[additional
caption on next page]
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
LORRA MANUEL, Derivatively on Behalf
of Nominal Defendant AMC ENTERTAINMENT HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG R. RAMSEY, CHRIS
A. COX, LINCOLN ZHANG, JACK Q. GAO, LLOYD L. HILL, HOWARD W. KOCH, JR., GARY F. LOCKE, KATHLEEN M. PAWLUS, ANTHONY J. SAICH, and
MAOJUN ZENG,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS, INC.,
Nominal
Defendant.
|
Case No. 1:20-cv-02456-ALC
|
[additional caption on next
page]
UNITED STATES DISTRICT
COURT
SOUTHERN DISTRICT OF
NEW YORK
DAVID DINKEVICH and ANN CARTER,
derivatively on behalf of AMC ENTERTAINMENT HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG R. RAMSEY,
CHRIS A. COX, LINCOLN ZHANG, JACK
Q. GAO, LLOYD HILL, HOWARD W.
KOCH, JR., GARY F. LOCKE, KATHLEEN
M. PAWLUS, ANTHONY J. SAICH, and
MAOJUN ZENG,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS, INC.,
Nominal
Defendant.
|
Case No. 1:20-cv-02870-ALC
|
[PROPOSED] ORDER AND
FINAL JUDGMENT
WHEREAS, (1) Plaintiff Naranbold
Gantulga in the action captioned Gantulga v. Aron, et al., Case No. 1:18-cv-10007-ALC (S.D.N.Y.) (the “Gantulga Action”),
Plaintiff Jennifer Kenna in the action captioned Kenna v. Aron, et al., Case No. 1:19-cv-09148-ALC (S.D.N.Y.) (the “Kenna
Action”), Plaintiff Lorra Manuel in the action captioned Manuel v. Aron, et al., Case No. 1:20-cv-02456-ALC (S.D.N.Y.)
(the “Manuel Action”), Plaintiffs David Dinkevich and Ann Carter in the action captioned Dinkevich, et al. v. Aron,
et al., Case No. 1:20-cv-02870-ALC (S.D.N.Y.) (the “Dinkevich Action”), and Plaintiff John R. Lyon (together with
Plaintiffs Gantulga, Kenna, Manuel, Dinkevich, and Carter, “Plaintiffs”) in the action captioned Lyon v. Aron, et al.,
Case No. 1:21-cv-07940-ALC (S.D.N.Y.) (the “Lyon Action,” and together with the Gantulga, Kenna, Manuel,
and Dinkevich Actions, the “Derivative Actions”); (2) Defendants Adam M. Aron, Craig R. Ramsey, Chris A. Cox, Lincoln
Zhang, Jack Q. Gao, Maojun Zeng, Anthony J. Saich, Lloyd L. Hill, Gary F. Locke, Howard W. Koch, Jr., Kathleen M. Pawlus, Phillip Lader,
Lee E. Wittlinger, and Adam J. Sussman (collectively, the “Individual Defendants”); and (3) Nominal Defendant AMC Entertainment
Holdings, Inc. (“AMC” or the “Company,” and together with the Individual Defendants, “Defendants”
and each a “Defendant,” and together with Plaintiffs, the “Parties” and each a “Party”), have entered
into the Stipulation of Settlement, dated June 14, 2023 (the “Stipulation”), which (i) sets forth all of the terms and conditions
of the settlement and resolution of the Derivative Actions and the litigation demand Plaintiff Lyon made on the AMC Board of Directors
(collectively, the “Derivative Matters”), (ii) fully, finally, and forever resolves, discharges, and settles the Released
Plaintiff Claims against the Released Defendant Persons, and the Released Defendant Claims against the Released Plaintiff Persons, and
(iii) provides for a dismissal of the Derivative Actions with prejudice;
WHEREAS, by Order dated _________
__, 2023 (the “Scheduling Order”), this Court: (a) ordered that notice of the Settlement be provided to AMC stockholders;
(b) provided AMC stockholders with the opportunity to object to the Settlement, Plaintiffs’ Counsel’s Fee and Expense Award,
and/or the Service Awards; and (c) scheduled a hearing regarding final approval of the Settlement;
WHEREAS, the Court conducted
a hearing on _________ __, 2023 (the “Settlement Hearing”) to consider, among other things: (a) whether the Settlement on
the terms and conditions provided for in the Stipulation is fair, reasonable, and adequate to AMC, and should be approved by the Court;
(b) whether an Order and Final Judgment should be entered dismissing the Derivative Actions with prejudice against Defendants; (c) whether
Plaintiffs’ Counsel’s Fee and Expense Award and the Service Awards should be approved; (d) any objections to the Settlement,
the Fee and Expense Award, and/or the Service Awards; and (e) any other matters properly brought before the Court in connection with
the Settlement; and
WHEREAS, it appearing that
due notice of the hearing has been given in accordance with the Scheduling Order; the Parties having appeared by their respective attorneys
of record; the Court having heard and considered evidence in support of the Settlement; the attorneys for the respective Parties having
been heard; an opportunity to be heard having been given to all other persons or entities requesting to be heard in accordance with the
Scheduling Order; and the entire matter of the Settlement having been heard and considered by the Court;
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED, this ___ day
of _____________, 2023, as follows:
1. Unless otherwise defined
in this Order and Final Judgment, all capitalized terms used herein shall have the same meanings as set forth in the Stipulation.
2.
This Court has jurisdiction over the subject matter of the Derivative Actions and all matters relating
to the Settlement, as well as personal jurisdiction over all of the Parties for the purposes of enforcement of the Parties’ obligations
under the Stipulation. It is further determined that Plaintiffs (individually and derivatively on behalf of AMC), Defendants, AMC, and
all AMC stockholders, as well as their heirs, executors, successors, and assigns, are bound by this Order and Final Judgment.
3.
This Order and Final Judgment incorporates and makes a part hereof: (a) the Stipulation, which was
filed with the Court on _______ __, 2023; and (b) the Notice, which was filed with the Court on ________ ___, 2023.
4.
Based on the record in the Derivative Matters, each of the provisions of Rule 23.1 of the Federal
Rules of Civil Procedure has been satisfied, and the Derivative Matters have been properly maintained according to Rule 23.1. Plaintiffs
have continuously held stock in AMC since the time of the conduct complained of in the Derivative Matters, and otherwise have standing
to prosecute the Derivative Matters derivatively on behalf of AMC; the Derivative Actions were properly instituted as derivative actions
on behalf of AMC; and Plaintiffs and Plaintiffs’ Counsel have adequately represented the interests of AMC both in terms of litigating
the Derivative Matters and for purposes of entering into and implementing the Settlement.
5.
The Court finds that the form of the Notice of the Settlement and the means of dissemination of
the Notice of the Settlement: (a) was implemented in accordance with the Scheduling Order; (b) constituted notice that was reasonably
calculated, under the circumstances, to apprise AMC stockholders of: (i) the pendency of the Derivative Matters; (ii) the effect of the
Settlement (including the Releases to be provided thereunder); (iii) Plaintiffs’ Counsel’s Fee and Expense Award and the
Service Awards; (iv) their right to object to the Settlement, Plaintiffs’
Counsel’s
Fee and Expense Award, and/or the Service Awards; and (v) their right to appear at the Settlement Hearing; (c) constituted due, adequate,
and sufficient notice to all Persons entitled to receive notice of the Settlement; and (d) satisfied the requirements of Rule 23.1, the
United States Constitution (including the Due Process Clause), and all other applicable law and rules.
6.
Pursuant to, and in accordance with, Rule 23.1, the Court hereby fully and finally approves the Settlement set forth in the Stipulation
in all respects (including without limitation: the Reforms; the Releases, including the release of the Released Plaintiff Claims as against
the Released Defendant Persons and the release of the Released Defendant Claims as against the Released Plaintiff Persons; and the dismissal
with prejudice of the claims asserted against Defendants in the Derivative Actions), and finds that the Settlement is in all respects,
fair, reasonable, and adequate to AMC and its stockholders. The Parties are directed to implement, perform, and consummate the Settlement
in accordance with the terms and provisions contained in the Stipulation.
7.
The Derivative Actions and all claims contained therein, as well as all of the Released Claims against the Released Persons, are dismissed
with prejudice. The Parties are to bear their own costs, except as otherwise provided in the Stipulation.
8. The
terms of the Stipulation and of this Order and Final Judgment shall be forever binding on Plaintiffs (individually and derivatively on
behalf of AMC), Defendants, AMC, AMC stockholders, the Released Persons, and their respective successors and assigns.
9.
The Releases set forth in Paragraphs 5.2 and 5.3 of the Stipulation, together with the definitions contained in Section 1 of the Stipulation
relating thereto, are expressly incorporated herein in all respects. The Releases are effective as of the Effective Date. Accordingly,
this Court orders that:
a.
Without further action by anyone, and subject to Paragraph 11 below, upon the Effective Date of the Settlement, AMC, the Released Plaintiff
Persons (individually and derivatively on behalf of AMC), and each and every stockholder of AMC (individually and derivatively on behalf
of AMC) shall and hereby completely, fully, finally, and forever release, relinquish, settle, and discharge his, her, or its right to
assert any or all of the Released Plaintiff Claims (including Unknown Claims) against any of the Released Defendant Persons, and shall
be forever barred and enjoined from commencing, asserting, instituting, or in any way participating in the commencement or prosecution
of any action or other proceeding, in any forum, involving any of the Released Plaintiff Claims against any of the Released Defendant
Persons.
b.
Without further action by anyone, and subject to Paragraph 11 below, upon the Effective Date of the Settlement, AMC and the Released
Defendant Persons each shall and hereby completely, fully, finally, and forever release, relinquish, settle, and discharge his, her,
or its right to assert any or all of the Released Defendant Claims (including Unknown Claims) against any of the Released Plaintiff Persons,
and shall be forever barred and enjoined from commencing, asserting, instituting, or in any way participating in the commencement or
prosecution of any action or other proceeding, in any forum, involving any of the Released Defendant Claims against any of the Released
Plaintiff Persons.
c.
“Released Defendant Claims” means any and all manner of claims, demands, rights, liabilities, losses, obligations, duties,
damages, costs, debts, expenses, interest, penalties, sanctions, fees, attorneys’ fees, actions, potential actions, causes of action,
suits, agreements, judgments, decrees, matters, counterclaims, offsets, issues, and controversies of any kind, nature, or description
whatsoever, whether accrued or unaccrued, disclosed or undisclosed, apparent or not apparent, foreseen or unforeseen, matured or not
matured, suspected or
unsuspected,
liquidated or not liquidated, fixed or contingent, whether based on state, local, federal, statutory, regulatory, common, or other law
or rule, including known claims and Unknown Claims, which any Defendant ever had, now has, or may have against any of the Released Plaintiff
Persons that arise out of, are based upon, or relate to the institution, prosecution, or settlement of the claims asserted in the Derivative
Matters. For the avoidance of doubt, the Released Defendant Claims shall not include any claims to enforce the Stipulation or the Settlement.
d.
“Released Defendant Persons” means all persons and entities named as a defendant in the Derivative Actions or that could
have been named as a defendant in the Derivative Actions, including, without limitation, the Company’s past and present officers
and directors, as well as any and all of the respective current and former employers, parent entities, controlling persons, owners, members,
co-investors, lenders, principals, affiliates, or subsidiaries of any of the foregoing, and each and all of the respective past or present
officers, directors, managers, partners, limited partners, general partners, stockholders, representatives, employees, attorneys, financial
or investment advisors, consultants, accountants, investment bankers, commercial bankers, agents, heirs, executors, trustees, personal
representatives, estates, administrators, predecessors, successors, assigns, insurers, and reinsurers of any of the foregoing.
e.
“Released Plaintiff Claims” means any and all manner of claims, demands, rights, liabilities, losses, obligations, duties,
damages, costs, debts, expenses, interest, penalties, sanctions, fees, attorneys’ fees, actions, potential actions, causes of action,
suits, agreements, judgments, decrees, matters, counterclaims, offsets, issues, and controversies of any kind, nature, or description
whatsoever, whether accrued or unaccrued, disclosed or undisclosed, apparent or not apparent, foreseen or unforeseen, matured or not
matured, suspected or unsuspected, liquidated or not liquidated, fixed or contingent, whether based on state, local, federal, statutory,
regulatory,
common, or other law or rule, including known
claims and Unknown Claims, that (a) were asserted in the Derivative Matters, or (b) Plaintiffs (individually or derivatively on behalf
of AMC) or AMC ever had, now have, or hereafter can, shall, or may have that, in full or in part, concern, relate to, arise out of, or
are in any way connected to the claims, allegations, transactions, facts, circumstances, events, acts, disclosures, statements, representations,
omissions, or failures to act alleged, set forth, referred to, or involved in the Derivative Matters. For the avoidance of doubt, the
Released Plaintiff Claims shall not include any claims to enforce the Stipulation or the Settlement.
f. “Released Plaintiff
Persons” means Plaintiffs and any and all of their respective current and former employers, parent entities, controlling persons,
owners, members, principals, affiliates, or subsidiaries, and each and all of their respective past or present officers, directors, managers,
partners, limited partners, general partners, stockholders, representatives, employees, attorneys, financial or investment advisors,
consultants, accountants, investment bankers, commercial bankers, agents, heirs, executors, trustees, personal representatives, estates,
administrators, predecessors, successors, assigns, insurers, and reinsurers.
g. “Unknown Claims”
means any claims that a Party does not know or suspect to exist in his, her, or its favor at the time of the release of such claims,
which, if known by him, her, or it, might have affected his, her, or its decision(s) with respect to the Settlement. With respect to
any and all Released Plaintiff Claims and Released Defendant Claims, the Parties stipulate and agree that, upon the Effective Date of
the Settlement, the Parties shall expressly waive any and all provisions, rights, and benefits conferred by any law of any state or territory
of the United States, or principle of common law or foreign law, which is similar, comparable, or equivalent to California Civil Code
§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.
The Parties acknowledge
that the foregoing waiver was separately bargained for and a key element of the Settlement. The Parties may hereafter discover facts
in addition to or different from those that they now know or believe to be true with respect to the Released Claims, but, upon the Effective
Date, the Parties shall be deemed to have, and by operation of this Order and Final Judgment shall have, fully, finally, and forever
settled and released any and all Released Claims known or unknown, suspected or unsuspected, contingent or non-contingent, accrued or
unaccrued, which now exist, heretofore have existed, or may in the future exist, upon any theory of law or equity, from the beginning
of time through the date of execution of the Stipulation, without regard to the subsequent discovery or existence of such different or
additional facts.
10.
As of the Effective Date, the Parties shall be finally and forever bound by the Settlement and this Order and Final Judgment. This Order
and Final Judgment, including, without limitation, the Releases set forth in Paragraph 9 above, shall have res judicata, collateral
estoppel, and all other preclusive effects in all pending and future lawsuits, arbitrations, or other suits, actions, or proceedings
involving any of the Released Defendant Persons and/or the Released Plaintiff Persons.
11.
Notwithstanding Paragraphs 9 and 10 above, nothing in this Order and Final Judgment shall bar any action by any of the Parties to enforce
the terms of the Stipulation or this Order and Final Judgment.
12.
Neither this Order and Final Judgment, nor the Stipulation, nor the fact or any terms of the Settlement, nor any negotiations or proceedings
in connection therewith is or shall be
deemed to be
evidence of, or a presumption, admission, or concession by any Party or any Released Person of any fault, liability, or wrongdoing whatsoever,
concerning the Derivative Matters or the facts and circumstances giving rise to the Derivative Matters. This Order and Final Judgment
and the Stipulation are not a finding or evidence of the validity or invalidity of any claims or defenses in the Derivative Matters or
any other actions or proceedings, or of any wrongdoing by any Defendant or of any damages or injury to Plaintiffs, AMC, or any AMC stockholder.
Neither this Order and Final Judgment, nor the Stipulation, nor the negotiations leading to the execution of the Stipulation, nor any
proceedings taken pursuant to or in connection with the Stipulation and/or approval of the Settlement (including any arguments proffered
in connection therewith): (a) shall be offered against any of the Released Persons as evidence of, or construed as, or deemed to be evidence
of any presumption, concession, proof, or admission by any of the Released Persons or with respect to the truth of any fact alleged by
Plaintiffs or the validity of any claim that was or could have been asserted in the Derivative Matters or in any other litigation or
proceeding, or the deficiency of any defense that has been or could have been asserted in the Derivative Matters or in any other litigation
or proceeding, or of any liability, negligence, fault, injury, acts, omissions, or other wrongdoing of any kind by any of the Released
Persons, or in any way referred to for any other reason as against any of the Released Persons, in any civil, criminal, or administrative
action or proceeding, other than such proceedings as may be necessary to effectuate or enforce the Settlement; (b) shall be offered against
any of the Released Persons as evidence of, or construed as, or deemed to be evidence of any presumption, concession, proof, or admission
by any of the Released Persons that any of their claims or defenses are without merit, or that damage recoverable in the Derivative Matters
would not have exceeded the Settlement consideration, or with respect to any liability, negligence, fault, or wrongdoing of any kind,
or in any way referred to for any
other reason against
any of the Released Persons, in any civil, criminal, or administrative action or proceeding, other than such proceedings as may be necessary
to effectuate or enforce the Settlement; nor (c) shall otherwise be admissible, referred to, or used in any proceeding of any nature,
for any purpose whatsoever; provided, however, that the Stipulation and/or this Order and Final Judgment may be introduced in any proceeding,
whether in this Court or otherwise, as may be necessary to argue that the Stipulation and/or this Order and Final Judgment has res
judicata, collateral estoppel, or other issue or claim preclusion effect, or to otherwise enforce the Stipulation and/or this Order
and Final Judgment.
13.
The Court hereby approves the sum of $______________ for the payment of Plaintiffs’ Counsel’s Fee and Expense Award, and
finds that the Fee and Expense Award is fair and reasonable. No other fees, costs, or expenses may be awarded to Plaintiffs’ Counsel
in connection with the Settlement. The Fee and Expense Award shall be distributed in accordance with the terms of the Stipulation. Defendants
shall have no responsibility for, and no liability with respect to, the allocation of the attorneys’ fees and expenses awarded
among Plaintiffs’ Counsel and/or to any other person who may assert some claim thereto. Any dispute regarding any allocation of
fees or expenses among Plaintiffs’ Counsel shall have no effect on the Settlement. No proceeding or court order with respect to
the Fee and Expense Award shall in any way disturb or affect this Order and Final Judgment (including precluding it from being Final
or otherwise being entitled to preclusive effect), and any such proceedings or court order shall be considered separate from this Order
and Final Judgment.
14.
The Court hereby approves the Service Awards of $___________ for each of Plaintiffs to be paid from Plaintiffs’ Counsel’s
Fee and Expense Award in recognition of Plaintiffs’ participation and effort in the prosecution of the Derivative Matters. The
failure of the Court to
approve any Service Award, in whole or in part,
shall have no effect on the Settlement set forth in the Stipulation, and the effectiveness of the Releases and other obligations of the
Parties set forth in the Stipulation nevertheless shall remain in full force and effect.
15.
Without affecting the finality of this Order and Final Judgment in any way, this Court shall retain
continuing and exclusive jurisdiction over the Parties and all AMC stockholders for purposes of the administration, interpretation, implementation,
and enforcement of the Parties’ obligations under the Stipulation.
16.
Without further approval from the Court, the Parties are hereby authorized to agree to and adopt
such amendments or modifications of the Stipulation or any exhibits attached thereto to effectuate the Settlement that: (a) are not materially
inconsistent with this Order and Final Judgment; and (b) do not materially limit the rights of AMC and its stockholders in connection
with the Settlement. Without further order of the Court, the Parties may agree to reasonable extensions of time to carry out any provisions
of the Stipulation or the Settlement.
17.
During the course of the litigation, all parties and their respective counsel at all times complied
with the requirements of Rule 11 of the Federal Rules of Civil Procedure.
18.
This Order and Final Judgment is a final judgment, and the Court finds that no just reason exists
for delay in entering this Order and Final Judgment in accordance with the Stipulation. Accordingly, the Clerk is hereby expressly directed
to immediately enter this final judgment in the Derivative Actions forthwith in accordance with Rule 58 of the Federal Rules of Civil
Procedure.
IT IS SO ORDERED.
DATED: _______________ |
|
|
HONORABLE ANDREW L. CARTER, JR.
U.S. DISTRICT JUDGE |
Exhibit 99.2
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
NARANBOLD GANTULGA, derivatively on behalf of AMC ENTERTAINMENT HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q.
GAO, MAOJUN ZENG, ANTHONY J. SAICH, LLOYD HILL, GARY F. LOCKE, HOWARD W. KOCH, JR., KATHLEEN M. PAWLUS, and DALIAN WANDA GROUP CO.,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS, INC.,
Nominal Defendant.
|
Case No. 1:18-cv-10007-ALC
|
[additional caption on next page]
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
JENNIFER KENNA, derivatively on behalf of AMC ENTERTAINMENT HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q.
GAO, MAOJUN ZENG, ANTHONY J. SAICH, LLOYD HILL, GARY F. LOCKE, HOWARD W. KOCH, JR., KATHLEEN M. PAWLUS, and DALIAN WANDA GROUP CO.,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS, INC.,
Nominal Defendant.
|
Case No. 1:19-cv-09148-ALC
|
[additional caption on next page]
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
LORRA MANUEL, Derivatively on Behalf of Nominal Defendant AMC ENTERTAINMENT
HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q.
GAO, LLOYD L. HILL, HOWARD W. KOCH, JR., GARY F. LOCKE, KATHLEEN M. PAWLUS, ANTHONY J. SAICH, and MAOJUN ZENG,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS, INC.,
Nominal Defendant.
|
Case No. 1:20-cv-02456-ALC
|
[additional caption on next page]
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
DAVID DINKEVICH and ANN CARTER, derivatively on behalf of AMC ENTERTAINMENT
HOLDINGS, INC.,
Plaintiff,
v.
ADAM M. ARON, CRAIG R. RAMSEY, CHRIS A. COX, LINCOLN ZHANG, JACK Q.
GAO, LLOYD HILL, HOWARD W. KOCH, JR., GARY F. LOCKE, KATHLEEN M. PAWLUS, ANTHONY J. SAICH, and MAOJUN ZENG,
Defendants,
and
AMC ENTERTAINMENT HOLDINGS, INC.,
Nominal Defendant.
|
Case No. 1:20-cv-02870-ALC
|
NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF
STOCKHOLDER
DERIVATIVE MATTERS
| TO: | ALL RECORD HOLDERS AND BENEFICIAL OWNERS OF AMC ENTERTAINMENT HOLDINGS, INC. (“AMC”
OR THE “COMPANY”) COMMON STOCK (TICKER SYMBOL: AMC) AS OF JUNE 14, 2023. |
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY.
THIS NOTICE RELATES TO A PROPOSED SETTLEMENT AND DISMISSAL WITH PREJUDICE OF STOCKHOLDER DERIVATIVE LITIGATION AND CONTAINS IMPORTANT
INFORMATION REGARDING YOUR RIGHTS.
IF THE COURT APPROVES THE SETTLEMENT OF THE DERIVATIVE
MATTERS, AMC STOCKHOLDERS WILL BE FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT AND DISMISSAL WITH PREJUDICE,
AND FROM PURSUING RELEASED CLAIMS.
THIS ACTION IS NOT A “CLASS ACTION.”
THUS, THERE IS NO COMMON FUND UPON WHICH YOU CAN MAKE A CLAIM FOR A MONETARY PAYMENT. THERE IS NO PROOF OF CLAIM FORM FOR STOCKHOLDERS
TO SUBMIT IN CONNECTION WITH THIS SETTLEMENT, AND STOCKHOLDERS ARE NOT REQUIRED TO TAKE ANY ACTION IN RESPONSE TO THIS NOTICE.
PLEASE TAKE NOTICE that this action is being settled
on the terms set forth in a Stipulation of Settlement, dated June 14, 2023 (the “Stipulation”).
The Stipulation was entered into by and among:
(1) Plaintiff Naranbold Gantulga in the action captioned Gantulga v. Aron, et al., Case No. 1:18-cv-10007-ALC (S.D.N.Y.)
(the “Gantulga Action”), Plaintiff Jennifer Kenna in the action captioned Kenna v. Aron, et al., Case No. 1:19-cv-09148-ALC
(S.D.N.Y.) (the “Kenna Action”), Plaintiff Lorra Manuel in the action captioned Manuel v. Aron, et al., Case
No. 1:20-cv-02456-ALC (S.D.N.Y.) (the “Manuel Action”), Plaintiffs David Dinkevich and Ann Carter in the action
captioned Dinkevich, et al. v. Aron, et al., Case No. 1:20-cv-02870-ALC (S.D.N.Y.) (the “Dinkevich Action”),
and Plaintiff John R. Lyon (together with Plaintiffs Gantulga, Kenna, Manuel, Dinkevich, and Carter, “Plaintiffs”) in the
action captioned Lyon v. Aron, et al., Case No. 1:21-cv-07940-ALC (S.D.N.Y.) (the “Lyon Action,” and together
with the Gantulga, Kenna, Manuel, and Dinkevich Actions, the “Derivative Actions”); (2) Defendants
Adam M. Aron, Craig R. Ramsey, Chris A. Cox, Lincoln Zhang, Jack Q. Gao, Maojun Zeng, Anthony J. Saich, Lloyd L. Hill, Gary F. Locke,
Howard W. Koch, Jr., Kathleen M. Pawlus, Phillip Lader, Lee E. Wittlinger, and Adam J. Sussman (collectively, the “Individual
Defendants”); and (3) Nominal Defendant AMC Entertainment Holdings, Inc. (“AMC” or the “Company,”
and together with the Individual Defendants, “Defendants” and each a “Defendant,” and together with Plaintiffs,
the “Parties” and each a “Party”).1
1
Dalian Wanda Group Co. (“Wanda”) was named as a defendant in the Gantulga and
Kenna Actions, but was not served with process and did not become a party to either action. See, e.g., Murphy Bros.
v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 (1999) (“one becomes a party officially . . . only upon service of a summons
or other authority-asserting measure”). Therefore, Wanda is not a party to the Stipulation, but is nevertheless released pursuant
to the terms of the Stipulation.
Unless otherwise defined in this Notice,
all capitalized terms used herein shall have the meanings set forth in the Stipulation.
WHAT IS THE PURPOSE OF THIS NOTICE? |
1. The
purpose of this Notice is to inform AMC stockholders of:
| · | the existence of the Derivative Actions in the United States District Court for the Southern District
of New York (the “Court”), which were brought on behalf of and for the benefit of AMC, as well as the existence of the litigation
demand Plaintiff Lyon made on the AMC Board of Directors (the “Lyon Litigation Demand”); |
| · | the proposed settlement (the “Settlement”) between Plaintiffs and Defendants reached to resolve
the Derivative Actions and the Lyon Litigation Demand (collectively, the “Derivative Matters”), subject to Court approval,
as provided in the Stipulation; |
| · | the telephonic hearing to be held by the Court on December 18, 2023 at 11:00 a.m. eastern to
consider the fairness, reasonableness, and adequacy of the Settlement and dismissal of the Derivative Actions with prejudice; |
| · | Plaintiffs’ Counsel’s application to the Court for an award of attorneys’ fees and expenses
(the “Fee and Expense Award”); and |
| · | Plaintiffs’ Counsel’s application to the Court for service awards to the Plaintiffs (the “Service
Awards”). |
2. This
Notice explains the Derivative Matters and the terms of the Settlement, and describes what steps you may take in relation to the Settlement.
This Notice is not an expression of any opinion by the Court about the truth or merits of Plaintiffs’ claims or Defendants’
defenses. This Notice is solely to advise you of the Settlement of the Derivative Matters and of your rights in connection with the Settlement.
3. The
Stipulation and the Settlement, subject to the approval of the Court, are intended by the Parties to completely, fully, finally, and forever
release, relinquish, settle, and discharge the Released Claims and result in the complete dismissal of the Derivative Actions with prejudice,
upon the terms and subject to the conditions set forth in the Stipulation. The Settlement is the product good faith and arm’s-length
settlement negotiations conducted over the course of more than a year and overseen by an experienced mediator. The Settlement requires
AMC to adopt
certain corporate governance reforms (the “Reforms”),
as outlined in Exhibit A to the Stipulation and summarized below.
4. This
Notice is a summary only and does not describe all of the details of the Stipulation. For full details of the matters discussed in this
Notice, please see the full Stipulation and its exhibits posted on AMC’s website, https://investor.amctheatres.com/stock-information/Tax-Info/default.aspx,
contact Plaintiffs’ Counsel at the addresses listed below, or inspect the full Stipulation filed with the Court.
WHAT ARE THE DERIVATIVE Matters
ABOUT?
WHAT HAS HAPPENED SO FAR? |
THE FOLLOWING DESCRIPTION
OF THE DERIVATIVE Matters AND THE SETTLEMENT HAS BEEN PREPARED BY COUNSEL FOR THE PARTIES.
THE COURT HAS MADE NO FINDINGS WITH RESPECT TO SUCH MATTERS, AND THIS NOTICE DOES NOT CONSTITUTE FINDINGS OF THE COURT AND SHOULD NOT
BE UNDERSTOOD AS AN EXPRESSION OR STATEMENT OR OPINION OF THE COURT AS TO THE MERITS OF ANY OF THE PARTIES’ CLAIMS OR DEFENSES.
5. The
Derivative Matters are brought on behalf of AMC and assert claims based on the allegations in a related, putative securities class action
captioned Hawaii Structural Ironworkers Pension Trust Fund v. AMC Entertainment Holdings, Inc., et al., Case No. 1:18-cv-00299-AJN
(S.D.N.Y.) (the “Securities Class Action”). The Securities Class Action asserted claims against AMC, certain of
AMC’s officers and directors, and the underwriters of AMC’s February 8, 2017 secondary public offering (the “Secondary
Public Offering”) based on alleged material misstatements and omissions in the registration statement for the secondary public offering
and certain other public disclosures. The Derivative Matters assert that Defendants violated the federal securities laws and/or breached
their fiduciary duties by making or permitting the Company to allegedly make materially false statements or omissions about AMC’s
business, operations, and prospects following three acquisitions. In an effort to deleverage after the acquisitions, Plaintiffs contend
that Defendants caused AMC to disseminate allegedly false and misleading statements in connection with the Secondary Public Offering and
certain other public disclosures. The Derivative Matters assert that on August 1, 2017, AMC issued a press release announcing disappointing
financial results for the period ended June 30, 2017, which Plaintiffs contend revealed that previously issued positive statements
about the acquisitions were false.
6. On
November 1, 2021, the parties to the Securities Class Action signed a stipulation of settlement to resolve the Securities Class Action
for $18.0 million. AMC and the other defendants in the Securities Class Action agreed to the settlement and the payment of the settlement
amount to eliminate the distraction, burden, expense, and uncertainty of further litigation. AMC and the other defendants continue to
expressly deny any liability or wrongdoing with respect to the matters alleged in the Securities Class Action. On February 14,
2022, the court in the Securities Class Action issued a final judgment approving the settlement and dismissing the Securities Class Action.
Gantulga
Action
7. On
May 21, 2018, Plaintiff Gantulga commenced the Gantulga Action in the United States District Court for the District of Kansas
on behalf of AMC against Defendants Aron, Ramsey, Cox, Zhang, Gao, Zeng, Saich, Hill, Locke, Koch, and Pawlus, asserting claims for violations
of Section 14(a) of the Securities and Exchange Act of 1934 (the “Exchange Act”), breach of fiduciary duty, and
unjust enrichment. The Gantulga Action alleges that making a demand on AMC’s Board of Directors (the “Board”)
to institute the claims pled in the Gantulga Action would have been futile. The defendants in the Gantulga Action maintain
that demand would not have been futile.
8. On
August 27, 2018, the defendants in the Gantulga Action filed a motion to dismiss or, in the alternative, to transfer the Gantulga
Action to the Court.
9. On
September 10, 2018, Plaintiff Gantulga opposed the defendants’ motion.
10. On
September 17, 2018, Plaintiff Gantulga filed an Amended Complaint that named Wanda as a defendant and mooted the pending motion.
11. On
October 12, 2018, the parties filed a joint motion to transfer the Gantulga Action to the Court.
12. On
October 15, 2018, the United States District Court for the District of Kansas granted the parties’ joint motion to transfer
the Gantulga Action to the Court.
13. On
November 8, 2018, Plaintiff Gantulga and the defendants in the Gantulga Action filed a stipulation to stay the Gantulga
Action, given the pendency of the Securities Class Action, which the Court granted on December 17, 2018.
14. On
March 30, 2020, the Court entered a stipulated protective order to govern discovery in the Gantulga Action.
15. On
January 10, 2022, pursuant to the terms of the order staying the Gantulga Action, Plaintiff Gantulga provided written notice
to the defendants in the Gantulga Action that the stay would be lifted as of February 9, 2022.
16. On
April 10, 2022, the Gantulga Action was reassigned from Judge Alison J. Nathan to Judge Andrew L. Carter, Jr.
Kenna
Action
17. On
October 2, 2019, Plaintiff Kenna commenced the Kenna Action in the Court on behalf of AMC against Defendants Aron, Ramsey,
Cox, Zhang, Gao, Zeng, Saich, Hill, Locke, Koch, and Pawlus, and Wanda, asserting claims for violations of Section 14(a) of
the Exchange Act, breach of fiduciary duty, and unjust enrichment. The Kenna Action alleges that making a demand on the Board to
institute the claims pled in the Kenna Action would have been futile. The defendants in the Kenna Action maintain that demand
would not have been futile.
18. On
October 15, 2019, Plaintiff Kenna and the defendants in the Kenna Action filed a stipulation to stay the Kenna Action,
given the pendency of the Securities Class Action, which the Court granted on October 17, 2019.
19. On
March 26, 2020, the Court entered a stipulated protective order to govern discovery in the Kenna Action.
20. On
April 20, 2020, Plaintiff Kenna filed an Amended Complaint asserting claims for violations of Sections 10(b), 14(a), and 21D of the
Exchange Act, breach of fiduciary duty, and unjust enrichment. The Amended Complaint included information gleaned from documents the Company
produced to Plaintiff Kenna pursuant to the order staying the Kenna Action.
21. On
January 10, 2022, pursuant to the terms of the order staying the Kenna Action, Plaintiff Kenna provided written notice to
the defendants in the Kenna Action that the stay would be lifted as of February 9, 2022.
22. On
April 10, 2022, the Kenna Action was reassigned from Judge Alison J. Nathan to Judge Andrew L. Carter, Jr.
Manuel
Action
23. On
March 20, 2020, Plaintiff Manuel commenced the Manuel Action in the Court on behalf of AMC against Defendants Aron, Ramsey,
Cox, Zhang, Gao, Zeng, Saich, Hill, Locke, Koch, and Pawlus, asserting claims for violations of Sections 10(b), 21D, and 29(B) of
the Exchange Act and breach of fiduciary duty. The Manuel Action alleges that making a demand on the Board to institute the claims
pled in the Manuel Action would have been futile. The defendants in the Manuel Action maintain that demand would not have
been futile.
24. On
May 12, 2020, Plaintiff Manuel and defendants in the Manuel Action filed a stipulation to stay the Manuel Action, given
the pendency of the Securities Class Action, which the Court granted on May 18, 2020.
25. On
June 25, 2020, the Court entered a stipulated protective order to govern discovery in the Manuel Action.
26. On
April 7, 2022, the Manuel Action was reassigned from Judge Alison J. Nathan to Judge Andrew L. Carter, Jr.
Dinkevich
Action
27. On
October 14, 2019, Plaintiff Dinkevich made a demand on AMC pursuant to 8 Del. C. § 220 to inspect certain of AMC’s
non-public books and records (the “Dinkevich 220 Demand”).
28. On
March 27, 2020, AMC produced certain books and records to Plaintiff Dinkevich in response to the Dinkevich 220 Demand. Plaintiff
Dinkevich’s counsel, who also represents Plaintiff Carter, requested, and AMC agreed, that Plaintiff Carter could also review the
books and records produced in response to the Dinkevich 220 Demand.
29. On
April 7, 2020, Plaintiffs Dinkevich and Carter commenced the Dinkevich Action in the Court on behalf of AMC against Defendants
Aron, Ramsey, Cox, Zhang, Gao, Zeng, Saich, Hill, Locke, Koch, and Pawlus, asserting claims for violations of Sections 10(b), 21D, and
29(B) of the Exchange Act, breach of fiduciary duty, and unjust enrichment. The Dinkevich Action, which incorporated the non-public
records produced by AMC in response to the Dinkevich 220 Demand, alleges that making a demand on the Board to institute the claims pled
in the Dinkevich Action would have been futile. The defendants in the Dinkevich Action maintain that demand would not have
been futile.
30. On
June 17, 2020, Plaintiffs Dinkevich and Carter and the defendants in the Dinkevich Action filed a stipulation to stay the
Dinkevich Action, given the pendency of the Securities Class Action, which the Court granted on June 25, 2020.
31. On
August 4, 2020, the Court entered a stipulated protective order to govern discovery in the Dinkevich Action.
32. On
December 8, 2021, Plaintiffs Dinkevich and Carter provided written notice to defendants of their intention to lift the stay in the
Dinkevich Action, and on January 7, 2022, filed a notice with the Court to lift the stay.
33. On
January 11, 2022, the Court lifted the stay of the Dinkevich Action.
34. On
April 10, 2022, the Dinkevich Action was reassigned from Judge Alison J. Nathan to Judge Andrew L. Carter, Jr.
The
Lyon Litigation Demand and the Lyon Action
35. On
February 3, 2020, Plaintiff Lyon made a demand on AMC pursuant to 8 Del. C. § 220 to inspect certain of AMC’s non-public
books and records (the “Lyon 220 Demand”).
36. On
July 15, 2020, Plaintiff Lyon made a litigation demand on the Board.
37. On
September 30, 2020, Plaintiff Lyon was informed that the Board voted unanimously not to pursue the claims in his litigation demand
at that time.
38. On
September 23, 2021, Plaintiff Lyon commenced the Lyon Action in this Court on behalf of AMC against Defendants Aron, Ramsey,
Cox, Zhang, Gao, Hill, Locke, Koch, Pawlus, Saich, Zeng, Lader, Wittlinger, and Sussman, asserting claims for contribution and indemnification
under Sections 10(b) and 21D of the Exchange Act, breach of fiduciary duty, waste of corporate assets, and unjust enrichment/constructive
trust. The Lyon Action alleges that the Board wrongfully refused Plaintiff Lyon’s litigation demand. The defendants in the
Lyon Action maintain that the Board properly refused Plaintiff Lyon’s litigation demand.
39. On
January 14, 2022, the defendants in the Lyon Action filed a motion to dismiss the Lyon Action.
40. On
April 7, 2022, the Lyon Action was reassigned from Judge Alison J. Nathan to Judge Andrew L. Carter, Jr.
41. On
March 21, 2023, the Court entered an Opinion and Order granting defendants’ motion to dismiss as to Plaintiff Lyon’s
contribution and indemnification claims under Sections 10(b) and 21D of the Exchange Act, which formed the basis for the Court’s
subject matter jurisdiction, because the settlement of the related Securities Class Action had received final approval without a
finding of liability. The Court further declined to exercise supplemental jurisdiction over Plaintiff Lyon’s remaining state law
claims, and thus did not reach the merits of those claims.
42. Plaintiff
Lyon was preparing to re-file a complaint based on his state law claims in the Delaware Court of Chancery at the time the Stipulation
was executed.
Settlement
and Settlement Hearing
43. On
November 18, 2020 and November 19, 2020, certain parties to the Derivative Matters participated in a mediation (the “Mediation”)
before David Geronemus, Esq. of JAMS (the “Mediator”). Prior to the Mediation, certain Plaintiffs submitted mediation
statements and settlement demands to the Mediator. The Mediation, however, did not result in a settlement. Thereafter, the Parties continued
to negotiate at arm’s-length and with the Mediator’s assistance, including by Plaintiffs sending a global settlement demand
to the Defendants on October 27, 2021 that included a comprehensive corporate governance reforms proposal. Ultimately, on June 21,
2022, the Parties reached an agreement in principle on the material terms of the Settlement, including the Reforms that AMC would adopt
as consideration for the Settlement, set forth in full in Exhibit A to the Stipulation.
44. On
October 6, 2023, the Court entered the Scheduling Order in connection with the Settlement, which, among other things, authorized
this Notice and scheduled the Settlement Hearing to consider whether to grant final approval of the Settlement.
WHAT ARE THE PRINCIPAL TERMS OF THE SETTLEMENT? |
45. In
consideration of the full settlement, satisfaction, compromise, and release of the Released Plaintiff Claims (defined in Paragraph 50
below) against the Released Defendant Persons (defined in Paragraph 50 below) and the Released Defendant Claims (defined in Paragraph
50 below) against the Released Plaintiff Persons (defined in Paragraph 50 below), and the dismissal with prejudice of the Derivative Actions,
the Parties have agreed to the Reforms set forth in Exhibit A to the Stipulation. The Reforms provide that, among other things, AMC
is required to: (i) appoint one new independent director to its Board; (ii) make improvements to its Nominating and Corporate
Governance Committee Charter relating to the screening of prospective director nominees; (iii) make improvements to its Compensation
Committee Charter by obligating the committee to consider legal compliance and compliance with AMC’s internal policies in making
decisions relating to short-term compensation, termination benefits, and separation pay; and (iv) increase compliance training for
certain AMC accounting personnel. After the Parties reached an agreement in principle on the material terms of the Settlement on June 21,
2022, but before the Parties executed the formal Stipulation of Settlement, AMC appointed a new independent director, Denise “Dee”
Clark, who joined the Board effective January 1, 2023, and made the improvements
to its Nominating and Corporate Governance Committee
and Compensation Committee Charters set forth in the Reforms.
WHAT ARE THE PARTIES’ REASONS FOR THE SETTLEMENT? |
46. Plaintiffs
believe that their derivative claims have merit, and Plaintiffs’ entry into the Settlement is not intended to be and shall not be
construed as an admission or concession concerning the relative strength or merit of the claims alleged in the Derivative Matters. However,
Plaintiffs and Plaintiffs’ Counsel recognize and acknowledge the significant risk, expense, and length of continued proceedings
necessary to prosecute the derivative claims against the Individual Defendants through trial(s) and possible appeal(s). Plaintiffs’
Counsel also have taken into account the uncertain outcome and the risk of any litigation, especially in complex cases like the Derivative
Matters, as well as the difficulties, significant risks, and delays inherent in such litigation. Plaintiffs’ Counsel are also mindful
of the inherent problems of establishing standing in derivative litigation, and the possible defenses to the claims alleged in the Derivative
Matters.
47. In
consideration of these matters, Plaintiffs and Plaintiffs’ Counsel have determined that it is in the best interests of AMC and its
current stockholders that the Derivative Matters be fully and finally settled in the manner and upon the terms and conditions set forth
in the Stipulation, and that these terms and conditions are fair, reasonable, and adequate.
48. Defendants
have denied, and continue to deny, all allegations of wrongdoing, fault, liability, or damages with respect to the Released Plaintiff
Claims, including, but not limited to, any allegations that Defendants have committed any violations of the Exchange Act or other law,
have breached any duty owed to AMC or its stockholders, have acted improperly in any way, have any liability or owe any damages of any
kind to AMC or its stockholders, and/or were unjustly enriched. Defendants maintain that their conduct was at all times proper, in the
best interests of AMC and its stockholders, and in compliance with applicable law. Defendants also deny that AMC or its stockholders were
harmed by any conduct of Defendants that was alleged or could have been alleged in the Derivative Matters. Each of the Individual Defendants
asserts that, at all relevant times, he or she acted in good faith and in a manner believed to be in the best interests of AMC and all
of its stockholders. Nonetheless, Defendants are entering into the Settlement solely to eliminate the burden, expense, and uncertainties
inherent in further litigation, and without admitting the validity of any allegations made in the Derivative Matters or any liability
with respect thereto, having concluded that it is desirable for the Derivative Matters to be fully and finally settled and dismissed in
the manner and upon the terms and conditions set forth in the Stipulation.
49. For
the avoidance of doubt, nothing in the Stipulation or the Settlement shall be construed as an admission by Defendants of any wrongdoing,
fault, liability, or damages whatsoever.
WHAT WILL HAPPEN IF THE SETTLEMENT IS APPROVED?
WHAT CLAIMS WILL THE SETTLEMENT RELEASE? |
50. If
the Settlement is approved, the Court will enter the Order and Final Judgment. Pursuant to the Order and Final Judgment, upon the Effective
Date of the Settlement, the Derivative Actions will be dismissed with prejudice and the following releases will occur:
Release of Claims
by Plaintiffs: AMC, the Released Plaintiff Persons (individually and derivatively on behalf of AMC), and each and every stockholder
of AMC, derivatively on behalf of AMC, shall completely, fully, finally, and forever release, relinquish, settle, and discharge his, her,
or its right to assert any or all of the Released Plaintiff Claims (including Unknown Claims) against any of the Released Defendant Persons,
and shall be forever barred and enjoined from commencing, asserting, instituting, or in any way participating in the commencement or prosecution
of any action or other proceeding, in any forum, involving any of the Released Plaintiff Claims against any of the Released Defendant
Persons.
Release of Claims
by Defendants: AMC and the Released Defendant Persons each shall completely, fully, finally, and forever release, relinquish, settle,
and discharge his, her, or its right to assert any or all of the Released Defendant Claims (including Unknown Claims) against any of the
Released Plaintiff Persons, and shall be forever barred and enjoined from commencing, asserting, instituting, or in any way participating
in the commencement or prosecution of any action or other proceeding, in any forum, involving any of the Released Defendant Claims against
any of the Released Plaintiff Persons.
“Released Defendant
Claims” means any and all manner of claims, demands, rights, liabilities, losses, obligations, duties, damages, costs, debts, expenses,
interest, penalties, sanctions, fees, attorneys’ fees, actions, potential actions, causes of action, suits, agreements, judgments,
decrees, matters, counterclaims, offsets, issues, and controversies of any kind, nature, or description whatsoever, whether accrued or
unaccrued, disclosed or undisclosed, apparent or not apparent, foreseen or unforeseen, matured or not matured, suspected or unsuspected,
liquidated or not liquidated, fixed or contingent, whether based on state, local, federal, statutory, regulatory, common, or other law
or rule, including known claims and Unknown Claims, which any Defendant ever had, now has, or may have against any of the Released Plaintiff
Persons that arise out of, are based upon, or relate to the institution, prosecution, or settlement of the claims asserted in the Derivative
Matters. For the avoidance of doubt, the Released Defendant Claims shall not include any claims to enforce the Stipulation or the Settlement.
“Released Defendant
Persons” means all persons and entities named as a defendant in the Derivative Actions or that could have been named as a defendant
in the Derivative Matters, including, without limitation, the Company’s past and present officers and directors, as well as any
and all of the respective current and former employers, parent entities, controlling persons, owners, members, co-investors, lenders,
principals, affiliates, or subsidiaries of any of the foregoing, and each and all of the respective past or present officers, directors,
managers, partners, limited partners, general partners, stockholders, representatives, employees, attorneys, financial or investment advisors,
consultants, accountants, investment bankers, commercial bankers, agents,
heirs, executors, trustees,
personal representatives, estates, administrators, predecessors, successors, assigns, insurers, and reinsurers of any of the foregoing.
“Released Plaintiff
Claims” means any and all manner of claims, demands, rights, liabilities, losses, obligations, duties, damages, costs, debts, expenses,
interest, penalties, sanctions, fees, attorneys’ fees, actions, potential actions, causes of action, suits, agreements, judgments,
decrees, matters, counterclaims, offsets, issues, and controversies of any kind, nature, or description whatsoever, whether accrued or
unaccrued, disclosed or undisclosed, apparent or not apparent, foreseen or unforeseen, matured or not matured, suspected or unsuspected,
liquidated or not liquidated, fixed or contingent, whether based on state, local, federal, statutory, regulatory, common, or other law
or rule, including known claims and Unknown Claims, that (a) were asserted in the Derivative Matters, or (b) Plaintiffs (individually
or derivatively on behalf of AMC) or AMC ever had, now have, or hereafter can, shall, or may have that, in full or in part, concern, relate
to, arise out of, or are in any way connected to the claims, allegations, transactions, facts, circumstances, events, acts, disclosures,
statements, representations, omissions, or failures to act alleged, set forth, referred to, or involved in the Derivative Matters. For
the avoidance of doubt, the Released Plaintiff Claims shall not include any claims to enforce the Stipulation or the Settlement.
“Released Plaintiff
Persons” means Plaintiffs and any and all of their respective current and former employers, parent entities, controlling persons,
owners, members, principals, affiliates, or subsidiaries, and each and all of their respective past or present officers, directors, managers,
partners, limited partners, general partners, stockholders, representatives, employees, attorneys, financial or investment advisors, consultants,
accountants, investment bankers, commercial bankers, agents, heirs, executors, trustees, personal representatives, estates, administrators,
predecessors, successors, assigns, insurers, and reinsurers.
“Unknown Claims”
means any claims that a Party does not know or suspect to exist in his, her, or its favor at the time of the release of such claims, which,
if known by him, her, or it, might have affected his, her, or its decision(s) with respect to the Settlement. With respect to any
and all Released Plaintiff Claims and Released Defendant Claims, the Parties stipulate and agree that, upon the Effective Date of the
Settlement, the Parties shall expressly waive any and all provisions, rights, and benefits conferred by any law of any state or territory
of the United States, or principle of common law or foreign law, which is similar, comparable, or equivalent to California Civil Code
§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.
The Parties acknowledge
that the foregoing waiver was separately bargained for and a key element of the Settlement. The Parties may hereafter discover facts in
addition to or different from those that they now know or believe to be true with respect to the Released Claims, but, upon the
Effective Date, the
Parties shall be deemed to have, and by operation of the Order and Final Judgment shall have, fully, finally, and forever settled and
released any and all Released Claims known or unknown, suspected or unsuspected, contingent or non-contingent, accrued or unaccrued,
which now exist, heretofore have existed, or may in the future exist, upon any theory of law or equity, from the beginning of time through
the date of execution of the Stipulation, without regard to the subsequent discovery or existence of such different or additional facts.
51. The
Effective Date of the Settlement will be the first date upon which the following conditions of the Settlement have been met or waived:
(i) Court approval of this Notice, and subsequent dissemination of this Notice; (ii) the Court has approved the Settlement,
following dissemination of the Notice to AMC stockholders and a hearing, and entered the Order and Final Judgment, approving the Settlement,
dismissing the Derivative Actions with prejudice, and entering the Releases, without awarding costs to any party, except as provided in
the Settlement; and (iii) the passing of the date upon which the Order and Final Judgment becomes Final.
HOW WILL PLAINTIFFS’ COUNSEL BE PAID? |
52. Plaintiffs’
Counsel have not received any payment for their services in pursuing the claims asserted in the Derivative Matters, nor have Plaintiff’s
Counsel been reimbursed for their out-of-pocket expenses. Plaintiffs’ Counsel will apply to the Court for a Fee and Expense Award.
The Parties have agreed to a Fee and Expense Award, which AMC’s directors’ and officers’ insurance carriers shall pay
to Plaintiffs’ Counsel of one million dollars ($1,000,000.00), in full satisfaction of any and all claims for attorneys’ fees
or expenses that have been, could have been, or could be asserted by Plaintiffs’ Counsel or any other counsel in connection with
the Derivative Matters.
53. It
is not a condition of the Stipulation, the Settlement, or the Order and Final Judgment that the Court award any attorneys’ fees
or expenses to Plaintiffs’ Counsel. The Court may consider and rule upon the fairness, reasonableness, and adequacy of the
Settlement independently of the Fee and Expense Award. In the event that the Court does not award attorneys’ fees or expenses, or
in the event the Court makes an award in an amount that is less than the amount requested by Plaintiffs’ Counsel or is otherwise
unsatisfactory to Plaintiffs’ Counsel, or in the event that any such award is vacated or reduced on appeal, the Settlement, including
the effectiveness of the Releases and other obligations of the Parties, nevertheless shall remain in full force and effect.
54. Plaintiffs’
Counsel may apply to the Court for Service Awards of up to two thousand dollars ($2,000.00) for each of Plaintiffs, only to be paid upon
Court approval, and to be paid from the Fee and Expense Award in recognition of Plaintiffs’ participation and effort in the prosecution
of the Derivative Matters. Defendants shall not oppose Plaintiffs’ Counsel’s application for the Service Awards. The failure
of the Court to approve any Service Award, in whole or in part, shall have no effect on the Settlement, and the effectiveness of the Releases
and other obligations of the Parties set forth in the Stipulation nevertheless shall remain in full force and effect.
WHEN AND WHERE WILL THE SETTLEMENT HEARING BE HELD?
DO I HAVE THE RIGHT TO APPEAR AT THE SETTLEMENT
HEARING?
MAY I OBJECT TO THE SETTLEMENT AND SPEAK AT
THE HEARING IF I DO NOT LIKE THE SETTLEMENT? |
55. On
October 6, 2023, the Court entered an order preliminarily approving the Stipulation and the Settlement contemplated therein (the
“Scheduling Order”) and providing for notice of the Settlement to be made to AMC stockholders. The Scheduling Order further
provides that the Court will hold a telephonic hearing (the “Settlement Hearing”) on December 18, 2023 at 11:00 a.m. eastern
before the Honorable Andrew L. Carter, Jr., for the following purposes: (a) to determine whether the Settlement on the terms
and conditions provided for in the Stipulation is fair, reasonable, and adequate to AMC and its stockholders, and should be approved by
the Court; (b) to determine whether the Order and Final Judgment, substantially in the form attached as Exhibit D to the Stipulation,
should be entered, dismissing the Derivative Actions with prejudice against Defendants, and fully and finally releasing all Released Claims
against the Released Persons; (c) to determine whether the agreed-to Fee and Expense Award, as well as the Service Awards, should
be approved; (d) to consider any objections to the Settlement, the Fee and Expense Award, and/or the Service Awards; and (e) to
consider any other matters that may properly be brought before the Court in connection with the Settlement. To attend the Settlement Hearing,
contact the Court at 1-888-363-4749 (access code: 3768660) on December 18, 2023 at 11:00 a.m. eastern. AMC stockholders do not
need to attend the Settlement Hearing.
56. The
Court may, in its discretion, change the date and/or time of the Settlement Hearing without further notice to you. The Court reserves
the right to adjourn and reconvene the Settlement Hearing or any adjournment thereof, including the consideration of the Fee and Expense
Award, as well as the Service Awards, without further notice of any kind other than oral announcement at the Settlement Hearing or any
adjournment thereof. The Court further reserves the right to hold the Settlement Hearing telephonically or by videoconference without
further notice to AMC stockholders. Any AMC stockholder (or his, her, or its counsel) who wishes to appear at (or otherwise attend) the
Settlement Hearing should consult the Court’s calendar and/or AMC’s website, https://investor.amctheatres.com/stock-information/Tax-Info/default.aspx,
for any change in date, time, or format of the Settlement Hearing. The Court may approve the Settlement and any of its terms, with such
modifications as may be agreed to by the Parties, if appropriate, without further notice to AMC’s stockholders. You may also confirm
the date and time of the Settlement Hearing by contacting Plaintiffs’ Counsel as indicated in Paragraph 58 below.
57. Any
AMC stockholder who or which continues to own AMC shares as of June 14, 2023, the date of the Settlement Hearing, who wishes to object
to the fairness, reasonableness, or adequacy of the Settlement as set forth in the Stipulation, or to the Fee and Expense Award and/or
or Service Awards, may file with the Court a written objection.
58. An
objector must, at least twenty-one (21) calendar days prior to the Settlement Hearing, file with the Clerk of the Court and serve (either
by hand delivery or by first class mail) upon the below listed counsel a written objection to the Settlement, which must: (a) state
the name,
address, and telephone number of the objector,
and, if represented by counsel, the name, address, and telephone number of his, her, or its counsel; (b) be signed by the objector;
(c) state that the objection is being filed with respect to the Derivative Matters; (d) set forth a specific, written statement
of the objection(s), the nature of the objection(s), and the specific reason(s) for the objection(s), including any legal and evidentiary
support the objector wishes to bring to the Court’s attention; (e) provide proof of ownership of AMC common stock as of June 14,
2023, including the number of shares of AMC common stock held and the date of purchase or acquisition, and contain a statement that the
objector continues to hold shares of AMC common stock as of the date of the filing of any such objection and will continue to hold shares
of AMC common stock as of the date of the Settlement Hearing; and (f) provide any and all documentation or evidence in support of
such objection. In addition, if intending to appear and requesting to be heard at the Settlement Hearing, he, she, or it must, in addition
to the requirements of above, file with the Clerk of the Court and serve (either by hand delivery or by first class mail) upon the below
listed counsel a written notice of his, her, or its intention to appear at the Settlement Hearing, identifying therein any witnesses
he, she, or it intends to call at the Settlement Hearing and a statement as to the subjects of their testimony, and any and all evidence
that he, she, or it intends to present at the Settlement Hearing. Any objector who does not timely file and serve a notice of intention
to appear in accordance with this paragraph shall be foreclosed from raising any objection to the Settlement and shall not be permitted
to appear at the Settlement Hearing, except for good cause shown.
IF YOU MAKE A WRITTEN OBJECTION, IT
MUST BE RECEIVED BY THE CLERK OF THE COURT NO LATER THAN NOVEMBER 27, 2023. The Clerk’s address is:
Clerk of the Court,
U.S. District Court for the
Southern District of New York,
40 Foley Square
New York, NY 10007
YOU ALSO MUST DELIVER COPIES
OF THE MATERIALS TO PLAINTIFFS’ COUNSEL SO THEY ARE RECEIVED NO LATER THAN NOVEMBER 27, 2023. Plaintiffs’ Counsel’s
addresses are:
THE BROWN LAW FIRM, P.C.
Timothy Brown
767 Third Avenue, Suite 2501
New York, NY 10017
Tel: (516) 922-5427
Fax: (516) 344-6204
Email: tbrown@thebrownlawfirm.net
Counsel for Plaintiff Naranbold Gantulga
|
SCHUBERT JONCKHEER & KOLBE LLP
Willem F. Jonckheer
2001 Union Street, Suite 200
San Francisco, CA 94123
Tel: (415) 788-4220
Fax: (415) 788-0161
Email: wjonckheer@sjk.law
Counsel for Plaintiff Lorra Manuel
|
THE ROSEN LAW FIRM, P.A.
Phillip Kim
275 Madison Avenue, 40th Floor
New York, NY 10016
Tel.: (212) 686-1060
|
SHUMAN, GLENN & STECKER
Brett D. Stecker
326 W. Lancaster Avenue
Ardmore, PA 19003
Tel.: (303) 861-3003
|
Fax: (212) 202-3827 Email:
pkim@rosenlegal.com
Counsel for Plaintiffs Jennifer Kenna and Naranbold Gantulga |
Fax:
(303) 536-7849
Email: brett@shumanlawfirm.com
Counsel for Plaintiff David Dinkevich
and Ann Carter
|
KAHN SWICK & FOTI, LLC
Melinda Nicholson
1100 Poydras Street – Suite 960
New Orleans, LA 70163
Tel.: (504) 455-1400
Fax: (504) 455-1498-
Email: Melinda.Nicholson@ksfcounsel.com
Counsel for Plaintiff John R. Lyon III |
59. An
objector may file an objection on his, her, or its own or through an attorney hired at his, her, or its own expense. If an objector hires
an attorney to represent him, her, or it for the purposes of making such objection, the attorney must serve (either by hand delivery or
by first class mail) a notice of appearance on the counsel listed above and file such notice with the Court no later than twenty-one (21)
calendar days before the Settlement Hearing. Any AMC stockholder who does not timely file and serve a written objection complying with
the above terms shall be deemed to have waived, and shall be foreclosed from raising, any objection to the Settlement, and any untimely
objection shall be barred.
60. Unless
the Court orders otherwise, any person or entity who or which does not make his, her, or its objection in the manner set forth above will
be: (i) deemed to have waived and forfeited his, her, or its right to object to any aspect of the Settlement, the Order and Final
Judgment, the Fee and Expense Award, or the Service Awards; (ii) forever barred and foreclosed from objecting to the fairness, reasonableness,
or adequacy of the Settlement, the Stipulation, the Order and Final Judgment to be entered approving the Settlement, the Fee and Expense
Award, or the Service Awards; and (iii) deemed to have waived and be forever barred and foreclosed from being heard, in this or any
other suit, action, or proceeding (including, without limitation, any right of appeal), with respect to any matters concerning the Settlement,
the Stipulation, the Order and Final Judgment, the Fee and Expense Award, or the Service Awards.
AMC STOCKHOLDERS AS OF JUNE 14, 2023 WHO HAVE
NO OBJECTION TO THE SETTLEMENT DO NOT NEED TO APPEAR AT THE SETTLEMENT HEARING OR TAKE ANY OTHER ACTION.
WHAT IS THE EFFECT OF THE SETTLEMENT? |
61. Pending
the Court’s determination as to final approval of the Settlement, (i) all proceedings in the Derivative Actions, other than
proceedings as may be necessary to carry out the terms and conditions of the Stipulation, have been stayed until otherwise ordered by
the Court; (ii) Plaintiffs (individually or derivatively on behalf of AMC), and all other AMC stockholders (derivatively on behalf
of AMC) are barred and enjoined from commencing, asserting, instituting,
or in any way participating in the commencement
or prosecution of any action or other proceeding, in any forum, involving any of the Released Claims against any of the Released Persons;
and (iii) Defendants are barred and enjoined from commencing, asserting, instituting, or in any way participating in the commencement
or prosecution of any action or other proceeding, in any forum, involving any of the Released Claims against any of the Released Persons.
62. As
of the Effective Date, the Parties shall be finally and forever bound by the Settlement and the Order and Final Judgment. The Order and
Final Judgment, including, without limitation, the releases set forth above, shall have res judicata, collateral estoppel, and
all other preclusive effects in all pending and future lawsuits, arbitrations, or other suits, actions, or proceedings involving any of
the Released Persons.
WHO SHOULD I CONTACT IF I HAVE QUESTIONS? |
63. This
Notice does not purport to be a comprehensive description of the Derivative Matters, the allegations related thereto, the terms of the
Settlement, or the Settlement Hearing. This Notice is a summary description of the Derivative Matters, the complaints in the Derivative
Actions, the terms of the Settlement, and the Settlement Hearing. For a more detailed statement of the matters involved in the Derivative
Matters, reference is made to the Stipulation and its exhibits, copies of which may be reviewed and downloaded at (https://investor.amctheatres.com/stock-information/Tax-Info/default.aspx).
64. You
may obtain further information by contacting Plaintiffs’ Counsel at: (i) Timothy Brown, The Brown Law Firm, P.C., 767 Third
Avenue, Suite 2501, New York, NY 10017, Tel: (516) 922-5427, Email: tbrown@thebrownlawfirm.net; (ii) Phillip Kim, The Rosen
Law Firm, P.A., 275 Madison Avenue, 40th Floor, New York, NY 10016, Tel: (212) 686-1060, Email: pkim@rosenlegal.com; (iii) Willem
F. Jonckheer, Schubert Jonckheer & Kolbe LLP, 2001 Union Street, Suite 200, San Francisco, CA 94123, Tel: (415) 788-4220,
Email: wjonckheer@sjk.law; (iv) Brett D. Stecker, Shuman, Glenn & Stecker, 326 W. Lancaster Avenue, Ardmore, PA 19003, Tel:
(303) 861-3003, Email: brett@shumanlawfirm.com; or (v) Melinda Nicholson, Kahn Swick & Foti, LLC, 1100 Poydras Street –
Suite 960, New Orleans, LA 70163, Tel: (504) 455-1400, Email: Melinda.Nicholson@ksfcounsel.com.
Please Do Not Call
the Court or Defendants with Questions About the Settlement.
Dated: October 16, 2023 |
|
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By the Order of the Court |
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United States District Cour |
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for the Southern District of New York |
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