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`IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
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`IN RE AMC ENTERTAINMENT
`HOLDINGS, INC.
`STOCKHOLDER LITIGATION
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`
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`CONSOLIDATED
`C.A. No. 2023-0215-MTZ
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`STIPULATION AND AGREEMENT OF
`COMPROMISE, SETTLEMENT, AND RELEASE
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`This Stipulation and Agreement of Compromise, Settlement, and Release
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`(with the Exhibits hereto, the “Stipulation,” and the settlement contemplated hereby,
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`the “Settlement”) in the above-captioned action (the “Action”), filed in the Delaware
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`Court of Chancery (the “Court”), is made and entered into as of April 27, 2023 by
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`and between: (i) Plaintiffs Usbaldo Munoz, Anthony Franchi, and Allegheny County
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`Employees’ Retirement System (collectively, “Plaintiffs”), individually and on
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`behalf of the Settlement Class; and (ii) Defendants Adam M. Aron, Denise Clark,
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`Howard W. Koch, Jr., Philip Lader, Gary F. Locke, Kathleen M. Pawlus, Keri
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`Putnam, Anthony J. Saich, Adam J. Sussman, Lee Wittlinger, and AMC
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`Entertainment Holdings, Inc. (“AMC” or
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`the “Company”) (collectively,
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`“Defendants,” and together with Plaintiffs, the “Parties,” and each a “Party”), by and
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`through their respective undersigned counsel, to fully, finally, and forever
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`compromise, resolve, discharge, and settle the Released Claims, with the resulting
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`
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`EFiled: Apr 27 2023 01:49PM EDT
`Transaction ID 69906464
`Case No. 2023-0215-MTZ
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`
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`dismissal of the Action with prejudice, subject to Court approval pursuant to Court
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`of Chancery Rule 23.1
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`WHEREAS:
`Summary of the Action
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`RECITALS
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`A. On August 4, 2022, AMC declared a special dividend of one AMC
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`Preferred Equity Unit (an “AMC Preferred Equity Unit”) for each share of AMC
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`Class A common stock (the “Common Stock”). Each AMC Preferred Equity Unit
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`is a depositary share and represents an interest in one 1/100th of a share of the
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`Company’s Series A Convertible Participating Preferred Stock (the “Preferred
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`Stock”). Each share of Preferred Stock in turn is potentially convertible into 100
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`shares of Common Stock. Pursuant to a Deposit Agreement (the “Deposit
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`Agreement”) among the Company, Computershare Inc. (“Computershare”), and
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`Computershare Trust Company, N.A. (together with Computershare,
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`the
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`“Depositary”), dated August 4, 2022, in the absence of specific instructions from the
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`holders of AMC Preferred Equity Units, the Depositary agreed to vote the Preferred
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`Stock proportionately with votes cast pursuant to instructions received from the
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`other holders of AMC Preferred Equity Units.
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`1 Capitalized terms have the meanings set forth in the “Definitions” section below
`or as otherwise defined in this Stipulation.
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`2
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`B. On December 22, 2022, AMC entered into an agreement (the “Antara
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`Agreement”) with Antara Capital, LP (“Antara”) to raise $110 million of new equity
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`capital through the sale of AMC Preferred Equity Units to Antara. Additionally,
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`AMC announced that it would hold a special meeting of stockholders (the “Special
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`Meeting”) to vote on proposals to amend the Company’s Third Amended and
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`Restated Certificate of Incorporation (the “Certificate”) to: (i) increase the
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`authorized number of shares of Common Stock (the “Share Increase”); and
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`(ii) thereafter effect a 1-to-10 reverse stock split of AMC equity (the “Reverse Stock
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`Split,” and collectively with the “Share Increase,” the “Proposals”). The Proposals
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`would allow for the full conversion of all outstanding AMC Preferred Equity Units
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`into shares of Common Stock (the “Conversion”). Under the terms of the Antara
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`Agreement, Antara agreed to vote its AMC Preferred Equity Units in favor of the
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`Proposals at the Special Meeting.
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`C. On February 20, 2023, Allegheny County Employees’ Retirement
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`System commenced an action bearing the caption Allegheny County Employees’
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`Retirement System v. AMC Entertainment Holdings, Inc., et al., C.A. No. 2023-
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`0215-MTZ (the “Allegheny Action”), on behalf of itself and all other similarly
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`situated holders of Common Stock, against certain of the Defendants, asserting
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`claims for breach of fiduciary duty and violation of 8 Del. C. § 242(b)(2) in
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`3
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`connection with the issuance of the AMC Preferred Equity Units and Proposals, and
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`seeking injunctive relief and money damages in an amount to be determined at trial.
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`D. Also on February 20, 2023, Usbaldo Munoz and Anthony Franchi
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`commenced an action bearing the caption Munoz, et al. v. Aron, et al., C.A. No.
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`2023-0216-MTZ (the “Munoz Action”), on behalf of themselves and all other
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`similarly situated holders of Common Stock, against certain of the Defendants,
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`asserting a claim for breach of fiduciary duty in connection with the Proposals, and
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`seeking injunctive relief.
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`E. On February 27, 2023, the Court entered an Order (the “Status Quo
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`Order”), which, among other things, allowed AMC to hold the Special Meeting but
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`prevented AMC from effectuating the results of the stockholder votes held thereat
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`pending a ruling by the Court on Plaintiffs’ to-be-filed preliminary injunction
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`motion, set a hearing on such motion for April 27, 2023, and expedited the Action.
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`F.
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`On March 2, 2023, the Court entered an Order consolidating the
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`Allegheny Action and the Munoz Action for all purposes into the above-captioned
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`Action; appointing Allegheny County Employees’ Retirement System, Usbaldo
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`Munoz, and Anthony Franchi as lead plaintiffs in the Action; appointing the law
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`firms of Bernstein Litowitz Berger & Grossmann LLP, Fields Kupka & Shukurov
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`LLP; and Grant & Eisenhofer P.A. as lead counsel in the Action (“Lead Counsel”);
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`designating the Verified Stockholder Class Action Complaint filed in the Munoz
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`4
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`
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`Action as the operative complaint in the Action (the “Complaint”); and requiring
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`Lead Counsel to inform the Court whether a claim for violation of 8 Del. C.
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`§ 242(b)(2) would be included as a basis for Plaintiffs’ to-be-filed preliminary
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`injunction motion. On March 13, 2023, Lead Counsel filed a letter with the Court
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`stating that Plaintiffs would include a claim for violation of 8 Del. C. § 242(b)(2) as
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`against AMC in their motion.
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`G. On March 14, 2023, the Court entered a Stipulation and Order for the
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`Production and Exchange of Confidential and Highly Confidential Information (the
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`“Confidentiality Order”).
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`H. Also on March 14, 2023, AMC convened the Special Meeting, whereat
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`the Proposals were approved by a majority of Common Stock and Preferred Stock,
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`including Preferred Stock shares corresponding to uninstructed AMC Preferred
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`Equity Units, voting together as a class.
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`I.
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`Between February and April 2023, the Parties engaged in document
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`discovery: (i) Plaintiffs propounded 21 requests for the production of documents to
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`Defendants and served subpoenas on multiple third-parties; (ii) Plaintiffs obtained
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`and reviewed over 59,000 pages of documents from their discovery requests
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`propounded to Defendants and an additional 3,200 pages of documents from their
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`subpoenas to third-parties; and (iii) Plaintiffs responded to over 26 document
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`requests propounded by Defendants and produced over 3,700 pages of documents.
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`5
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`J.
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`Plaintiffs retained and worked closely with financial and proxy
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`solicitation experts to prepare expert analyses to submit with their anticipated
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`injunction brief. Plaintiffs were also preparing to take six fact depositions and to sit
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`for their own depositions, all to be conducted in an eight-day span, with a fact
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`discovery deadline of April 6, 2023.
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`K. On March 28, 2023, the Parties participated in a mediation session with
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`former Vice Chancellor Joseph R. Slights III. The Parties engaged in extensive
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`follow-up negotiations over the next several days.
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`L. On April 2, 2023, following adversarial and arm’s-length negotiations,
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`the Parties executed a Term Sheet (the “Term Sheet”) reflecting the Parties’
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`agreement-in-principle to settle the Action.
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`M. This Stipulation (together with the exhibits hereto) reflects the final and
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`binding agreement among the Parties concerning the Settlement and supersedes the
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`Term Sheet.
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`Plaintiffs’ Claims and the Benefits of the Settlement
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`N.
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`Plaintiffs and Class Counsel believe that the claims asserted in the
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`Action have merit but acknowledge that Defendants had potential defenses thereto,
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`including that the AMC board of directors purportedly had a compelling justification
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`for (i) issuing AMC Preferred Equity Units and (ii) taking steps to convert AMC
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`Preferred Equity Units into shares of Common Stock. Accordingly, Plaintiffs and
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`6
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`Class Counsel determined that entering into the Settlement, which contemplates
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`substantial benefits for the Settlement Class and would resolve the claims asserted
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`in the Action on the terms set forth herein, is in the best interests of Settlement Class
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`members. In reaching this determination, Plaintiffs and Class Counsel considered:
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`(i) the attendant risks of continued litigation and the uncertainty of the outcome of
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`the Action; (ii) the probability of success on the merits; (iii) the inherent problems
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`of proof associated with, and possible defenses to, the claims asserted in the Action;
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`(iv) discovery taken in the Action; (v) the desirability of permitting the Settlement
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`to be consummated according to its terms; (vi) the expense and length of continued
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`proceedings necessary to prosecute the Action through a preliminary injunction
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`hearing, trial, and any appeals; and (vii) the terms and conditions of the Settlement
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`and this Stipulation, which Plaintiffs and Class Counsel have concluded are fair,
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`reasonable, and adequate.
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`O. Based on Class Counsel’s review and analysis of the relevant facts,
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`allegations, defenses, and controlling legal principles, Class Counsel believe that the
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`Settlement set forth in this Stipulation is fair, reasonable, and adequate, and confers
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`substantial benefits upon the Settlement Class. Based upon Class Counsel’s
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`evaluation, as well as their own evaluations, Plaintiffs have determined that the
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`Settlement is in the best interests of the Settlement Class and have agreed to the
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`terms and conditions set forth in this Stipulation.
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`7
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`Defendants’ Denial of Wrongdoing and Liability
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`P.
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`Defendants deny any and all allegations of wrongdoing, fault, liability,
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`or damages with respect to Plaintiffs’ Released Claims, including, but not limited to,
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`any allegations that Defendants have committed any violations of law or breach of
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`any duty owed to holders of AMC Common Stock, that Defendants have acted
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`improperly in any way, or that Defendants have any liability or owe any damages of
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`any kind to Plaintiffs and/or the Settlement Class. Defendants maintain that their
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`conduct was at all times proper, in the best interests of the Company and its
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`stockholders, and in compliance with applicable law. Defendants also deny that the
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`Company’s stockholders were harmed by any conduct of Defendants that was
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`alleged, or that could have been alleged, in the Action. Each of Defendants asserts
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`that, at all relevant times, such Defendant acted in good faith and in a manner
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`believed to be in the best interests of the Company and all of its stockholders.
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`Q. Nevertheless, Defendants have determined to enter into the Settlement
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`on the terms and conditions set forth in this Stipulation solely to put Plaintiffs’
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`Released Claims to rest, finally and forever, without in any way acknowledging any
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`wrongdoing, fault, liability, or damages. For the avoidance of doubt, nothing in this
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`Stipulation or the Settlement shall be construed as an admission by Defendants of
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`any wrongdoing, fault, liability, or damages whatsoever.
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`8
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`NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED,
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`subject to the approval of the Court pursuant to Court of Chancery Rule 23, that the
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`Action shall be fully and finally compromised, settled, and dismissed with prejudice,
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`and that (i) all Plaintiffs’ Released Claims shall be completely, fully, finally, and
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`forever compromised, settled, released, discharged, extinguished, and dismissed
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`with prejudice and without costs (except as provided herein) as against all
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`Defendants’ Released Persons, and (ii) all Defendants’ Released Claims shall be
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`completely, fully, finally, and forever compromised, settled, released, discharged,
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`extinguished, and dismissed with prejudice and without costs (except as provided
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`herein) as against all Plaintiffs’ Released Persons, upon and subject to the following
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`terms and conditions of the Settlement:
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`A. Definitions
`The following capitalized terms, used in this Stipulation and its
`1.
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`Exhibits, shall have the meanings specified below:
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`a.
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`“Administration Costs” means the costs, fees, and expenses
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`incurred in connection with administering the Settlement, including but not limited
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`to issuing the Settlement Payment to Settlement Class Members.
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`b.
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`“Allegheny Complaint” means the Verified Class Action
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`Complaint Seeking Declaratory, Injunctive, and Equitable Relief filed in the
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`Allegheny Action at Trans. Id. 69181648.
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`9
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`c.
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`“Class Counsel” means Lead Counsel (i.e., the law firms
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`Bernstein Litowitz Berger & Grossmann LLP, Fields Kupka & Shukurov LLP, and
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`Grant & Eisenhofer P.A.) and Saxena White P.A.
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`d.
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`“Class Period” means the period from August 3, 2022 through
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`and including the Settlement Class Time.
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`e.
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`“Effective Date” means the first date by which all of the events
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`and conditions specified in Paragraph 17 of this Stipulation have been met and have
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`occurred or have been waived by the Parties in writing.
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`f.
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`g.
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`“Exhibits” means the exhibits attached hereto.
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`“Fee and Expense Award” means an award to Class Counsel of
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`fees and expenses approved by the Court in accordance with the Settlement
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`(including any incentive fee to any of Plaintiffs), in full satisfaction of any and all
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`claims for attorneys’ fees or expenses that have been, could be, or could have been
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`asserted by Class Counsel or any other counsel for any Settlement Class Member.
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`h.
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`“Final” when referring to any judgment or order entered by the
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`Court, means that one of the following has occurred: (i) the time for the filing or
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`noticing of any motion for reconsideration, reargument, appeal, or review of the
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`judgment or order has expired without any such filing or notice; or (ii) the judgment
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`or order has been affirmed in all material respects on an appeal or after
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`reconsideration or other review and is no longer subject to review upon
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`10
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`reconsideration, reargument, appeal, or other review, and the time for any petition
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`for reconsideration, reargument, appeal, or review of such judgment or order (or any
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`order affirming it) has expired; provided, however, that any disputes or appeals
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`relating solely to the amount, payment, or allocation of attorneys’ fees and expenses
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`in the Action shall have no effect on finality for purposes of determining the date on
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`which the Order and Final Judgment becomes Final, and shall not prevent, limit, or
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`otherwise affect the Order and Final Judgment.
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`i.
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`“Munoz Complaint” means the Verified Stockholder Class
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`Action Complaint filed in the Munoz Action at Trans. Id. 69170312.
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`j.
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`“Notice” means the Notice of Pendency and Proposed Settlement
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`of Stockholder Class Action, Settlement Hearing, and Right to Appear substantially
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`in the form attached hereto as Exhibit B.
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`k.
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`“Notice Costs” means the costs, fees, and expenses incurred in
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`connection with providing notice to the Settlement Class.
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`l.
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`“Order and Final Judgment” means the Order and Final
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`Judgment to be entered in the Action substantially in the form attached hereto as
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`Exhibit D, or as modified by agreement of the Parties in writing.
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`m.
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`“Person” means any individual, corporation, partnership, limited
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`partnership, limited liability partnership, limited liability company, association,
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`affiliate, joint stock company, investment fund, estate, legal representative trust,
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`11
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`unincorporated association, entity, government and any political subdivision thereof,
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`or any other type of business or legal entity.
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`n.
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`“Released Claims” means the Released Plaintiffs’ Claims and
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`the Released Defendants’ Claims, collectively or individually.
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`o.
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`“Released Defendants’ Claims” means any and all actions,
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`causes of action, suits, liabilities, claims, rights of action, debts, sums of money,
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`covenants, contracts, controversies, agreements, promises, damages, contributions,
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`indemnities, and demands of every nature and description, whether or not currently
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`asserted, whether known claims or Unknown Claims, suspected, existing, or
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`discoverable, whether arising under federal, state, common, or foreign law, and
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`whether based on contract, tort, statute, law, equity, or otherwise (including, but not
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`limited to, federal and state securities laws), that were or could have been asserted
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`by any of the Released Defendants’ Persons in any court, tribunal, forum, or
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`proceeding, and that are based upon, arise out of, relate to, or involve the
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`commencement, prosecution, defense, mediation, or settlement of the Action, except
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`claims with regard to enforcement of the Settlement or this Stipulation.
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`p.
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`“Released Defendants’ Persons” means each and all Defendants
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`and any and all of their respective former or current, direct or indirect parents,
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`subsidiaries, affiliates, controlling persons, stockholders, employees, officers,
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`directors, agents, fiduciaries, predecessors, successors, trusts, trustees, trust
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`12
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`beneficiaries, family members, spouses, heirs, executors, estates, administrators,
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`assigns, beneficiaries, distributees, foundations, joint ventures, general or limited
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`partners, members, managers, managing members, attorneys, heirs, successors,
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`assigns, insurers, reinsurers, advisors (including without limitation legal, financial,
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`and investment advisors), consultants, other affiliated persons, and representatives,
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`and with respect to each of the foregoing, their respective former or current, direct
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`or indirect parents, subsidiaries, affiliates, controlling persons, employees, officers,
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`directors, agents, fiduciaries, predecessors, successors, trusts, trustees, trust
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`beneficiaries, family members, spouses, heirs, executors, estates, administrators,
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`assigns, beneficiaries, distributees, foundations, joint ventures, general or limited
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`partners, members, managers, managing members, attorneys, heirs, successors,
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`assigns, insurers, reinsurers, advisors (including without limitation legal, financial,
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`and investment advisors), consultants, other affiliated persons, and representatives.
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`q.
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`“Released Persons” means the Released Plaintiffs’ Persons and
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`the Released Defendants’ Persons, collectively or individually.
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`r.
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`“Released Plaintiffs’ Claims” means any and all actions, causes
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`of action, suits, liabilities, claims, rights of action, debts, sums of money, covenants,
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`contracts, controversies, agreements, promises, damages, contributions, indemnities,
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`and demands of every nature and description, whether or not currently asserted,
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`whether known claims or Unknown Claims, suspected, existing, or discoverable,
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`13
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`whether arising under federal, state, common, or foreign law, and whether based on
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`contract, tort, statute, law, equity, or otherwise (including, but not limited to, federal
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`and state securities laws), that Plaintiffs or any other Settlement Class Member:
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`(i) asserted in the Allegheny Complaint or the Munoz Complaint; or (ii) ever had,
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`now have, or hereafter can, shall, or may have, directly, representatively,
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`derivatively, or in any other capacity that, in full or part, concern, relate to, arise out
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`of, or are in any way connected to or based upon the allegations, transactions, facts,
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`matters, occurrences, representations, or omissions involved, set forth, or referred to
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`in the Complaints and that relate to the ownership of Common Stock and/or AMC
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`Preferred Equity Units during the Class Period, except claims with regard to
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`enforcement of the Settlement and this Stipulation.
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`s.
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`“Released Plaintiffs’ Persons” means Plaintiffs, all other
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`Settlement Class Members, and any and all of their respective former or current,
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`direct or indirect parents, subsidiaries, affiliates, controlling persons, stockholders,
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`employees, officers, directors, agents, fiduciaries, predecessors, successors, trusts,
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`trustees, trust beneficiaries, family members, spouses, heirs, executors, estates,
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`administrators, assigns, beneficiaries, distributees, foundations, joint ventures,
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`general or limited partners, members, managers, managing members, attorneys,
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`heirs, successors, assigns, insurers, reinsurers, advisors (including without limitation
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`legal, financial, and investment advisors), consultants, other affiliated persons, and
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`14
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`representatives, and with respect to each of the foregoing, their respective former or
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`current, direct or indirect parents, subsidiaries, affiliates, controlling persons,
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`employees, officers, directors, agents, fiduciaries, predecessors, successors, trusts,
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`trustees, trust beneficiaries, family members, spouses, heirs, executors, estates,
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`administrators, assigns, beneficiaries, distributees, foundations, joint ventures,
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`general or limited partners, members, managers, managing members, attorneys,
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`heirs, successors, assigns, insurers, reinsurers, advisors (including without limitation
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`legal, financial, and investment advisors), consultants, other affiliated persons, and
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`representatives.
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`t.
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`“Releases” means the releases set forth in Paragraphs 5 and 6 of
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`this Stipulation.
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`u.
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`“Scheduling Order” means the Scheduling Order substantially in
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`the form attached hereto as Exhibit A.
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`v.
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`“SEC” means the United States Securities and Exchange
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`Commission.
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`w.
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`“Settlement Class” means a non-opt-out class for settlement
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`purposes only, and pursuant to Court of Chancery Rules 23(a), 23(b)(1), and
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`23(b)(2), consisting of all holders of Common Stock during the Class Period,
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`whether beneficial or of record, including the legal representatives, heirs,
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`15
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`successors-in-interest, transferees, and assignees of all such foregoing holders, but
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`excluding Defendants.
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`x.
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`“Settlement Class Member” means a Person who is a member of
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`the Settlement Class.
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`y.
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`“Settlement Class Time” means the record time, expected to be
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`set as of the close of business on the business day prior to Conversion on which the
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`Reverse Stock Split is effective.
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`z.
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`“Settlement Hearing” means the hearing to be held by the Court
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`to, among other things: (i) determine whether to finally certify the Settlement Class
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`for settlement purposes only, pursuant to Court of Chancery Rules 23(a), 23(b)(1),
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`and 23(b)(2); (ii) determine whether Plaintiffs and Lead Counsel have adequately
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`represented the Settlement Class, and whether Plaintiffs should be finally appointed
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`as representatives for the Settlement Class and Lead Counsel should be finally
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`appointed as counsel for the Settlement Class; (iii) determine whether the proposed
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`Settlement should be approved as fair, reasonable, and adequate to the Settlement
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`Class and in the best interests of the Settlement Class; (iv) determine whether the
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`Action should be dismissed with prejudice and the Releases provided under this
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`Stipulation should be granted; (v) determine whether the Order and Final Judgment
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`approving the Settlement should be entered and the Status Quo Order lifted; (vi)
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`determine whether and in what amount any Fee and Expense Award should be paid
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`16
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`to Class Counsel from Defendants and/or their insurers; (vii) hear and rule on any
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`objections to the Settlement and/or Class Counsel’s application for a Fee and
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`Expense Award; and (viii) consider any other matters that may properly be brought
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`before the Court in connection with the Settlement.
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`aa.
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`“Settlement Payment” means one share of Common Stock for
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`every 7.5 shares of Common Stock owned by record holders of Common Stock as
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`of the Settlement Class Time (after giving effect to the Reverse Stock Split).
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`bb.
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`“Summary Notice” means the Summary Notice of Pendency and
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`Proposed Settlement of Stockholder Class Action, Settlement Hearing, and Right to
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`Appear substantially in the form attached hereto as Exhibit C.
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`cc.
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`“Termination Notice” means written notice of a Party’s election
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`of their right to terminate the Settlement and this Stipulation.
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`dd.
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`“Unknown Claims” means any Released Plaintiffs’ Claims
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`which Plaintiffs do not, or any Settlement Class Member does not, know or suspect
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`to exist in his, her, or its favor at the time of the release of such claims, and any
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`Released Defendants’ Claims which any Defendant does not know or suspect to exist
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`in his, her, or its favor at the time of the release of such claims, which, if known by
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`him, her, or it, might have affected his, her, or its decision(s) with respect to this
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`Settlement. With respect to any and all Released Claims, the Parties stipulate and
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`agree that, upon the Effective Date, Plaintiffs and Defendants shall expressly waive,
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`17
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`and each of the other Settlement Class Members shall be deemed to have waived,
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`and by operation of the Order and Final Judgment shall have expressly waived, any
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`and all provisions, rights, and benefits conferred by any law of any state or territory
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`of the United States, or principle of common law or foreign law, which is similar,
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`comparable, or equivalent to Cal. Civ. Code § 1542, which provides:
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`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.
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`Plaintiffs and Defendants acknowledge, and each of the other Settlement Class
`
`Members shall be deemed by operation of law to have acknowledged, that the
`
`inclusion of the foregoing waiver was separately bargained for and was a key and
`
`material element of the Settlement and was relied upon by each and all of Plaintiffs
`
`and Defendants in entering into this Stipulation.
`
`B.
`
`Settlement Consideration
`In consideration for the full and final release, settlement, dismissal, and
`2.
`
`discharge of any and all of the Released Plaintiffs’ Claims against the Released
`
`Defendants’ Persons, upon entry of the Order and Final Judgment, AMC, on behalf
`
`of Defendants, shall, promptly following the Conversion, issue the Settlement
`
`Payment to the record holders of Common Stock as of the Settlement Class Time
`
`
`
`18
`
`
`
`(after giving effect to the Reverse Stock Split). No fractional shares of Common
`
`Stock will be issued as part of the Settlement Payment. Record holders who would
`
`otherwise be entitled to receive a fractional share of the Settlement Payment will
`
`receive a cash payment in lieu thereof in the same manner as will be provided in
`
`connection with the Reverse Stock Split. For beneficial holders who hold through
`
`banks, brokers, or other nominees, these banks, brokers, or other nominees may have
`
`different procedures for processing the Settlement Payment and handling fractional
`
`shares.
`
`C. Administration of Settlement Payment
`Upon entry of the Order and Final Judgement, AMC will have the sole
`3.
`
`responsibility for issuing the Settlement Payment to record holders of Common
`
`Stock pursuant to Paragraph 2 above, and shall be solely responsible for any and all
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`Administration Costs in connection with the Settlement, regardless of whether the
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`Court approves the Settlement or the Effective Date of the Settlement fails to occur,
`
`and in no event shall Plaintiffs or their counsel be responsible for any Administration
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`Costs. Given that the Settlement Payment consists of stock, as opposed to cash,
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`Defendants will inform the Court at least thirty (30) calendar days prior to the
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`Settlement Hearing if they intend to issue the shares of Common Stock comprising
`
`the Settlement Payment in reliance on Section 3(a)(10) of Securities Act of 1933
`
`
`
`19
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`
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`(the “Securities Act”), which exempts such securities from registration under the
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`Securities Act.
`
`D.
`
`Scope of the Settlement
`Upon entry of the Order and Final Judgment, the Status Quo Order shall
`4.
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`be immediately lifted and the Action shall be dismissed in its entirety and with
`
`prejudice. Plaintiffs and Defendants shall each bear his, her, or its own fees, costs,
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`and expenses, except as expressly provided in Paragraphs 19-20 of this Stipulation;
`
`provided, however, that nothing herein shall affect Defendants’ rights to, and claims
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`for, advancement or indemnity of their legal fees, costs, and expenses in connection
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`with the Action, the Settlement, or any of the Released Plaintiffs’ Claims, nor any
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`claims that Defendants may have against their respective insurers, co-insurers, or
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`reinsurers.
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`5.
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`Upon the Effective Date, Plaintiffs and each of the other Settlement
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`Class Members, on behalf of themselves and any and all of their respective
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`predecessors, successors, representatives, trustees, executors, administrators,
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`estates, heirs, transferees, and assigns, in their capacities as such only, and any other
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`person or entity purporting to claim through or on behalf of them in such capacity
`
`only, by operation of the Order and Final Judgment and to the fullest extent permitted
`
`by law, shall completely, fully, finally, and forever release, relinquish, settle, and
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`discharge the Released Plaintiffs’ Claims as against the Released Defendants’
`
`
`
`20
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`
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`Persons, and shall forever be barred and enjoined from commencing, instigating, or
`
`prosecuting any of the Released Plaintiffs’ Claims against any of the Released
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`Defendants’ Persons.
`
`6.
`
`Upon the Effective Date, Defendants, on behalf of themselves and any
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`and all of their respective predecessors, successors, representatives, trustees,
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`executors, administrators, estates, heirs, transferees, and assigns, in their capacities
`
`as such only, and any other person or entity purporting to claim through or on behalf
`
`of them in such capacity only, by operation of the Order and Final Judgment and to
`
`the fullest extent permitted by law, shall completely, fully, finally, and forever
`
`release, relinquish, settle, and discharge the Released Defendants’ Claims as against
`
`the Released Plaintiffs’ Persons, and shall forever be barred and enjoined from
`
`commencing, instituting, or prosecuting any of the Released Defendants’ Claims
`
`against any of the Released Plaintiffs’ Persons.
`
`E.
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`Settlement Class Certification
`Solely for the purposes of the Settlement and for no other purpose, the
`7.
`
`Parties agree to: (i) certification of the Action as a non-opt-out class action pursuant
`
`to Court of Chancery Rules 23(a), 23(b)(1), and (b)(2) on behalf of the Settlement
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`Class; (ii) appointment of Plaintiffs as representatives for the Settlement Class; and
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`(iii) appointment of Class Counsel as counsel for the Settlement Class.
`
`
`
`21
`
`
`
`8.
`
`The certification of the Settlement Class shall be binding only with
`
`respect to the Settlement and this Stipulation. In the event that the Settlement or this
`
`Stipulation is terminated pursuant to its terms or the Effective Date otherwise fails
`
`to occur, the certification of the Settlement Class shall be deemed vacated, and the
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`Action shall proceed as though the Settlement Class had never been certified.
`
`F.
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`Submission of the Settlement to the Court for Approval
`As soon as practicable after this Stipulation has been executed, the
`9.
`
`Parties shall jointly submit this Stipulation, together with its Exhibits, to the Court,
`
`and shall jointly apply to the Court for entry of the Scheduling Order.
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`10.
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`In accordance with the Scheduling Order, AMC, on behalf of
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`Defendants, shall provide notice of the Settlement to Settlement Class Members as
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`follows: (i) file with the SEC a Current Report on Form 8-K describing the
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`Settlement and stating where stockholders can locate this Stipulation and the Notice
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`on AMC’s website; (ii) post a copy of this Stipulation and the Notice on AMC’s
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`website, which shall remain on AMC’s website through the Effective Date or
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`termination of the Settlement; (iii) transmit the Summary Notice once over the PR
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`News
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