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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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`CONSOLIDATED
`C.A. No. 2023-0215-MTZ
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`SCHEDULING ORDER WITH
`RESPECT TO NOTICE AND SETTLEMENT HEARING
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`WHEREAS, a stockholder class action is pending in this Court, entitled In re
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`AMC Entertainment Holdings, Inc. Stockholder Litigation, Consolidated C.A.
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`No. 2023-0215-MTZ (the “Action”);
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`WHEREAS, a Stipulation and Agreement of Compromise, Settlement, and
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`Release, dated as of April 27, 2023 (the “Stipulation”), has been entered into by and
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`among: (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 (as defined below); and (ii) Defendants Adam M.
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`Aron, Denise Clark, Howard W. Koch, Jr., Philip Lader, Gary F. Locke, Kathleen
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`M. Pawlus, Keri Putnam, Anthony J. Saich, Adam J. Sussman, Lee Wittlinger, and
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`AMC Entertainment Holdings, Inc. (“AMC” or the “Company”) (collectively,
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`“Defendants,” and together with Plaintiffs, the “Parties,” and each a “Party”); and
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`WHEREAS, the Stipulation provides for a settlement, subject to the approval
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`of the Court, among the Parties and for dismissal of the Action with prejudice as
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`EFiled: May 01 2023 04:33PM EDT
`Transaction ID 69929995
`Case No. 2023-0215-MTZ
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`
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`against Defendants upon the terms and conditions set forth in the Stipulation (the
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`“Settlement”);
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`NOW, upon consent of the Parties, after review and consideration of the
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`Stipulation filed with the Court and the Exhibits attached thereto, and after due
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`deliberation,
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`IT IS HEREBY ORDERED, this 1st day of May, 2023 that:
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`1.
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`Except for terms defined herein, the Court adopts and incorporates the
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`definitions in the Stipulation for purposes of this Order.
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`2.
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`The Court has jurisdiction over the subject matter of the Action, and all
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`matters relating to the Settlement of the Action, as well as personal jurisdiction over
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`all of the Parties and each of the Settlement Class Members (as defined below).
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`3.
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`In accordance with the proposed class definition in the Stipulation, for
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`the purposes of the Settlement only, the Action preliminarily shall be maintained as
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`a non-opt-out class action under Delaware Court of Chancery Rules 23(a), 23(b)(1),
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`and 23(b)(2), consisting of the following class (the “Settlement Class”):
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`All holders of AMC Class A common stock (the “Common Stock”)
`during the period from August 3, 2022 through and including the record
`time, expected to be set as of the close of business in accordance with
`any New York Stock Exchange and/or Depository Trust Company
`requirements or policies, on the business day prior to Conversion on
`which the Reverse Stock Split is effective (the “Class Period”), whether
`beneficial or of record, including the legal representatives, heirs,
`successors-in-interest, transferees, and assignees of all such foregoing
`holders, but excluding Defendants.
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`2
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`4.
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`The Court preliminarily appoints Plaintiffs as representatives for the
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`Settlement Class, and Lead Counsel Bernstein Litowitz Berger & Grossmann LLP,
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`Fields Kupka & Shukurov LLP, and Grant & Eisenhofer P.A. as Class Counsel for
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`the Settlement Class.
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`5.
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`For purposes of the Settlement only, the Court preliminarily finds that:
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`(i) the members of the Settlement Class (collectively, the “Settlement Class
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`Members”) are so numerous that their joinder in the Action would be impracticable;
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`(ii) there are questions of law and fact common to the Settlement Class; (iii) the
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`claims of Plaintiffs are typical of the claims of the Settlement Class; (iv) in
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`connection with the prosecution of the Action and the Settlement, Plaintiffs and
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`Class Counsel have and will fairly and adequately represent and protect the interests
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`of the Settlement Class; (v) the prosecution of separate actions by individual
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`Settlement Class Members would create a risk of inconsistent adjudications that
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`would establish incompatible standards of conduct for Defendants, and, as a
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`practical matter, the disposition of the Action as against Defendants would influence
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`the disposition of any pending or future identical suits, actions, or proceedings
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`brought by other Settlement Class Members; and (vi) Defendants are alleged to have
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`acted or refused to act on grounds generally applicable to the Settlement Class,
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`thereby making appropriate final injunctive relief or corresponding declaratory relief
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`with respect to the Settlement Class as a whole.
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`3
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`6.
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`A hearing (the “Settlement Hearing”) will be held on June 29 and 30,
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`2023, at 9:15 a.m., at the Leonard L. Williams Justice Center, at 500 N. King Street,
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`Wilmington, Delaware, to, among other things:
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`i.
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`determine whether to finally certify the Settlement Class for
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`settlement purposes only, pursuant to Court of Chancery Rules 23(a),
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`23(b)(1), and 23(b)(2);
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`ii.
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`determine whether Plaintiffs and Class Counsel have adequately
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`represented the Settlement Class, and whether Plaintiffs should be finally
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`appointed as representatives for the Settlement Class and Class Counsel
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`should be finally appointed as counsel for the Settlement Class;
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`iii.
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`determine whether the proposed Settlement should be approved
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`as fair, reasonable, and adequate to the Settlement Class and in the best
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`interests of the Settlement Class;
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`iv.
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`determine whether the Action should be dismissed with
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`prejudice and the Releases provided under the Stipulation should be granted;
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`v.
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`determine whether the Order and Final Judgment approving the
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`Settlement should be entered and the Status Quo Order lifted;
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`vi.
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`determine whether and in what amount any Fee and Expense
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`Award should be paid to Class Counsel by Defendants and/or their insurers;
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`4
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`vii. determine whether and in what amount any Incentive Awards, to
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`be paid to solely out of any Fee and Expense Award to Class Counsel, should
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`be paid to Plaintiffs;
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`viii. hear and rule on any objections to the Settlement and/or Class
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`Counsel’s application for a Fee and Expense Award, including any Incentive
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`Awards to Plaintiffs; and
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`ix.
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`consider any other matters that may properly be brought before
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`the Court in connection with the Settlement.
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`7.
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`The Court may adjourn and reconvene the Settlement Hearing, or any
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`adjournment thereof, including the consideration of the application for any Fee and
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`Expense Award, without further notice to Settlement Class Members other than oral
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`announcement at the Settlement Hearing or any adjournment thereof, or a notation
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`on the docket in the Action, and the Court retains jurisdiction over the Parties and
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`all Settlement Class Members to consider all further applications arising out of or
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`connected with the proposed Settlement.
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`8.
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`The Court may decide to hold the Settlement Hearing by telephone or
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`videoconference without notice to the Settlement Class. If the Court orders that the
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`Settlement Hearing be conducted telephonically or by videoconference, that decision
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`will
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`be
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`posted
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`on
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`AMC’s
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`investor
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`relations
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`website,
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`https://investor.amctheatres.com/newsroom/default.aspx. Any Settlement Class
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`5
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`Member (or his, her, or its counsel) who wishes to appear telephonically or by video
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`at the Settlement Hearing should consult the Court’s docket, and/or AMC’s investor
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`relations website for any change in date, time, or format of the Settlement Hearing.
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`9.
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`The Court may approve the Settlement at or after the Settlement
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`Hearing, according to the terms and conditions of the Stipulation, as it may be
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`modified by the Parties, without further notice to Settlement Class Members.
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`Further, the Court may render its judgment and order the payment of the Fee and
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`Expense Award, including any Incentive Awards to Plaintiffs, at or after the
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`Settlement Hearing, with such modifications as may be consented to by the Parties,
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`without further notice of any kind.
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`10. The Court approves, in form and substance, the Notice of Pendency and
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`Proposed Settlement of Stockholder Class Action, Settlement Hearing, and Right to
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`Appear submitted to the Court on May 1, 2023 (the “Notice”) and the Summary
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`Notice of Pendency and Proposed Settlement of Stockholder Class Action,
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`Settlement Hearing, and Right to Appear attached as Exhibit C to the Stipulation
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`(the “Summary Notice”).
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`11. The Court finds that (i) the filing with the United States Securities and
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`Exchange Commission (the “SEC”) of a Current Report on Form 8-K describing the
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`Settlement and stating where stockholders can locate the Stipulation and the Notice
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`on AMC’s investor relations website; (ii) the publication of the Stipulation and the
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`Notice on AMC’s investor relations website; (iii) the publication of the Summary
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`Notice over the PR Newswire; (iv) the posting of a notice regarding the Settlement
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`on AMC’s Twitter account; (v) the publication of the Stipulation and the Notice on
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`Lead Counsel’s respective websites; and (vi) the process for Strategic Claims
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`Services (the “Notice Administrator”) to send a post card notice to record and
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`beneficial owners of AMC Common Stock set forth in Paragraph 14 constitutes the
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`best notice practicable under the circumstances to all persons entitled to receive
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`notice of the Settlement Hearing and the proposed Settlement, and meets the
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`requirements of Delaware Court of Chancery Rule 23, the requirements of due
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`process, and all other applicable law and rules.
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`12. Not later than five (5) business days after the date of entry of this Order
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`(such date that is five (5) business days after the date of entry of this Order, the
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`“Notice Date”), the Company shall (i) file with the SEC a Current Report on Form
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`8-K describing the Settlement and stating where stockholders can locate the
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`Stipulation and the Notice on AMC’s investor relations website; (ii) post a copy of
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`the Stipulation and the Notice on AMC’s investor relations website, which shall
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`remain on AMC’s website through the Effective Date or termination of the
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`Settlement; (iii) transmit the Summary Notice once over the PR Newswire; and
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`(iv) post a notice regarding the Settlement on AMC’s Twitter account in
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`substantially the following form:
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`7
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`AMC has recently reached an agreement to settle a putative stockholder
`class action concerning the proposed conversion of AMC Preferred
`Equity Units into Common Stock and reverse stock split. The
`settlement agreement and settlement notice can be located on AMC’s
`website at this address: [insert address once available]. AMC
`stockholders who are Class Members have the right to object to the
`settlement and the deadline to do so is May 31, 2023.
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`13. No later than the Notice Date, Lead Counsel shall post a copy of the
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`Stipulation and the Notice on their respective websites, which shall remain on their
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`websites through the Effective Date or termination of the Settlement, and also post
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`links to the Stipulation and the Notice on their social media accounts on a weekly
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`basis during the notice period.
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`14. No later than the Notice Date, the Notice Administrator shall mail a
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`post card notice to all record holders of AMC Common Stock and request that,
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`within five (5) business days of such request, any record holders of AMC Common
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`Stock who are nominees or custodians for beneficial holders provide either physical
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`addresses or email addresses for all such beneficial owners to which the post card
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`notice can be sent or request copies of the post card notice from the Notice
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`Administrator to mail to such beneficial owners. Within five (5) business days of
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`receiving any physical addresses or email addresses for a beneficial owner of AMC
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`Common Stock from a nominee or custodian, the Notice Administrator will mail a
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`post card notice to such beneficial owner or email them a copy of the post card
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`notice, as applicable. The Notice Administrator will also send copies of the post
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`card notice to any nominee or custodian who requests them within five (5) business
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`days of any such request.
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`15. The Company shall, if requested, reimburse nominees or custodians of
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`beneficial owners of AMC Common Stock for their reasonable out-of-pocket
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`expenses incurred in providing notice to beneficial owners as set forth in Paragraph
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`14 of up to either: (i) $.03 per name and address or email address provided to the
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`Notice Administrator; or (ii) $.03 for each post card notice actually mailed, plus
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`postage at the pre-sort rate used by the Notice Administrator.
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`16. Defendants and/or the Notice Administrator shall file with the Court
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`proof of compliance with the notice requirements of Paragraphs 12 and 14 above no
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`later than June 22, 2023.
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`17. The Parties shall file any opening papers in support of the proposed
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`Settlement, and Class Counsel shall file their application for the Fee and Expense
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`Award, including any supporting affidavit(s) no later than May 4, 2023.
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`18. Any Settlement Class Member may lodge any written statement in
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`support of (a “Supporter”) or objection to (an “Objector”) the Settlement and/or
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`Class Counsel’s application for the Fee and Expense Award, including Plaintiffs’
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`application for Incentive Awards to be paid solely out of any Fee and Expense
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`Award to Class Counsel; provided, however, that, unless otherwise directed by the
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`Court for good cause shown, no Settlement Class Member shall be heard or entitled
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`9
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`to support or contest the approval of the terms and conditions of the proposed
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`Settlement and/or the application for the Fee and Expense Award, including
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`Incentive Awards to Plaintiffs, unless that person or entity has served such written
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`statement in support or objection by email, by hand, by first-class U.S. mail, or by
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`express service at the following address such that it is received no later than May 31,
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`2023:
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`By electronic mail to:
`AMCSettlementObjections@blbglaw.com
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`By mail to:
`AMC Investor Submissions
`c/o John Mills, Esq.
`Bernstein Litowitz Berger & Grossmann LLP
`1251 Avenue of the Americas
`New York, NY 10020
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`It is preferable for any Objector or Supporter to email any materials that he, she, or
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`it wishes the Court to consider. Mr. Mills or his colleagues will furnish the Special
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`Master appointed by the Court in this Action and counsel for each of the Parties with
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`copies of any and all statements in support or objections that come into their
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`possession as soon as possible and, in any event, within 24 hours of receiving them.
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`19. Any objections or statements in support must: (i) identify the case name
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`and civil action number, “In re AMC Entertainment Holdings, Inc. Stockholder
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`Litigation, Consolidated C.A. No. 2023-0215-MTZ”; (ii) state the name, address,
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`and telephone number of the Supporter or Objector and, if represented by counsel,
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`10
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`the name, address, and telephone number of the Supporter’s or Objector’s counsel;
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`(iii) be signed (either by hand or electronically) by the Supporter or Objector; (iv)
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`contain a specific, written statement of the objection(s) and the specific reason(s) for
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`the objection(s), including any legal and evidentiary support the Supporter or
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`Objector wishes to bring to the Court’s attention; and (v) include documentation
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`sufficient to prove that the Supporter or Objector is a member of the Settlement
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`Class. All supporting papers should be submitted with the original letter of support
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`or objection, and no witnesses other than Objectors will be permitted at the
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`Settlement Hearing. Documentation establishing that a Supporter or Objector is a
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`member of the Settlement Class must consist of copies of an official brokerage
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`account statement, a screen shot of an official brokerage account, or an authorized
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`statement from the Supporter’s or Objector’s broker containing the transactional and
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`holding information found in an account statement. Class Counsel may request that
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`the Supporter or Objector submit additional information or documentation sufficient
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`to prove that the objector is a Settlement Class Member. Any Objector who has
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`properly objected to the proposed Settlement and intends to speak at the Settlement
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`Hearing should review the letter the Court intends to publish to AMC stockholders
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`with specific instructions regarding the Settlement Hearing and return the form
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`referenced in that letter to the Register in Chancery. The Court’s letter and the form
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`11
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`to return to the Register in Chancery will be posted on the Court’s docket and the
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`“Investor Relations” section of AMC’s website.
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`20. Any Person who fails to comply with the procedures outlined above in
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`Paragraph 19 shall be deemed to have waived the right to object (including any right
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`of appeal), and shall be forever barred from raising any objection in the Action or
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`any other action or proceeding or otherwise contesting the Settlement or the
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`application for the Fee and Expense Award in the Action, including any Incentive
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`Awards to Plaintiffs, or any other proceeding, and will otherwise be bound by the
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`Order and Final Judgment to be entered and the Releases to be given. Settlement
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`Class Members who do not object need not appear at the Settlement Hearing or take
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`any other action to indicate their approval.
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`21. The Parties may submit to the Special Master any reply papers in
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`response to any statements of support or objections to the Settlement and Class
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`Counsel shall file any reply in response to any objections to their application for the
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`Fee and Expense Award no later than June 7, 2023.
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`22. The Special Master is directed to issue and file with the Court a Report
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`and Recommendation containing the Special Master’s consideration of all materials
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`timely and properly submitted by any Supporters or Objectors that post-date the
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`Notice Date (the “Submissions”). The Special Master shall provide the Court with
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`a summary of the Submissions and the Special Master’s recommendations as to how
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`12
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`the Submissions should inform the Court’s decision to approve or deny the proposed
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`Settlement, no later than June 21, 2023.
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`23. The Parties may file any exceptions to the Special Master’s Report and
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`Recommendation no later than June 28, 2023.
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`24. All proceedings in the Action against Defendants, other than
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`proceedings as may be necessary to carry out the terms and conditions of the
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`Stipulation, are hereby stayed and suspended until further order of the Court.
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`Pending final determination of whether the Settlement should be approved, the Court
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`bars and enjoins Plaintiffs and all other Settlement Class Members, and anyone
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`acting or purporting to act on behalf of, in the stead of, or derivatively for, any
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`Settlement Class Member, from commencing, pursuing, prosecuting, instigating,
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`maintaining, or in any way participating in the commencement, pursuit,
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`continuation, or prosecution of any action asserting any of the Released Plaintiffs’
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`Claims against any of the Released Defendants’ Persons.
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`25. The Court may, for good cause shown, extend any of the deadlines set
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`forth in this Order without further notice to the Settlement Class.
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`26. The Court retains exclusive jurisdiction to consider all further
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`applications arising out of or connected with the proposed Settlement.
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` /s/ Morgan T. Zurn
` Vice Chancellor Morgan T. Zurn
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`13
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