o
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Preliminary
Proxy Statement
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¨
|
Confidential,
for Use of the Commission Only
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x
|
Definitive
Proxy Statement
|
(as
permitted by Rule 14a-6(e)(2))
|
|
¨
|
Definitive
Additional Materials
|
||
¨
|
Soliciting
Material Pursuant to Rule 14a-11(c) or Rule 14a-12
|
CENTRAL
EUROPEAN MEDIA ENTERPRISES LTD.
|
|
(Name
of Registrant as Specified In Its
Charter)
|
|
(Name
of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
|
x
|
No
fee required.
|
|
¨
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
(1)
|
Title
of each class of securities to which transaction
applies: N/A
|
(2)
|
Aggregate
number of securities to which transaction
applies: N/A
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was
determined): N/A
|
(4)
|
Proposed
maximum aggregate value of
transaction: N/A
|
(5)
|
Total
fee paid: $0
|
¨
|
Fee
paid previously with preliminary
materials: N/A
|
¨
|
Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its
filing.
|
(1)
|
Amount
Previously Paid:
|
(2)
|
Form,
Schedule or Registration Statement
No.:
|
(3)
|
Filing
Party:
|
(4)
|
Date
Filed:
|
1.
|
To
elect twelve directors to serve until the next Annual General Meeting of
Shareholders;
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||
2.
|
To
approve the issuance and sale of shares of Class A Common Stock and Class
B Common Stock to TW Media Holdings LLC;
|
||
3.
|
To
approve the amendment and restatement of our Amended and Restated 1995
Stock Incentive Plan; and
|
||
4.
|
To
appoint Deloitte LLP as the independent registered public accounting firm
for the Company in respect of the fiscal year ended December 31, 2009 and
to authorize the directors, acting through the Audit Committee, to approve
their fee.
|
By
order of the Board of Directors,
|
|
/s/ Daniel Penn | |
Daniel
Penn
|
|
Secretary
|
Submitted
by:
|
|
Charles
Frank
|
|
Bruce
Maggin
|
|
Herbert
A. Granath
|
|
Members
Of The Compensation
committee
|
|
·
|
Attract
and retain executives with the experience and expertise to drive us to
achieve our objectives. This means that we provide significant
compensation opportunities to executives who are able to deliver
competitive results.
|
|
·
|
Reward
executives for creating shareholder value. This means that our
long-term incentive programs are equity-based and that these equity-based
programs represent a significant percentage of the total compensation
opportunity for our executives.
|
|
·
|
Create
a mix of short-term and long-term compensation to achieve a balance
between current income and long-term incentive opportunities that promote
attention to both annual and multi-year business
objectives. The mix between short-term and long-term is also
designed to reflect the roles and responsibilities of the
individual. This means that senior executives have a higher
percentage of their total potential compensation tied to variable (versus
fixed) pay.
|
|
·
|
Create
a strong culture that rewards results. This means that
incentive plans reward a combination of our overall results through the
achievement of specific financial goals and individual performance through
the use of specific goals and
objectives.
|
|
·
|
Ensure
compensation is appropriate in light of our profile, strategy and
anticipated performance. This means that while the Compensation
Committee considers competitive practice in its decision-making, it places
significant emphasis on our specific strategy and performance in the
ultimate determination of compensation
decisions.
|
1
|
For a quantitative reconciliation
of non-GAAP financial measures to the most directly comparable financial
measurements in accordance with GAAP, see the Company’s Annual Report on
Form 10-K for the year ended December 31, 2008 accompanying this proxy
statement.
|
|
·
|
In
a very challenging economic environment, we reported consolidated revenues
of more than $1.0 billion for the year ended December 31, 2008,
a 22% increase over consolidated net revenues for the year ended December
31, 2007 and a landmark for the Company in exceeding the $1.0 billion
threshold.
|
|
·
|
We
reported Segment EBITDA of $345.6 million for the year ended December 31,
2008, a 7% increase over Segment EBITDA for the year ended December 31,
2007.
|
|
·
|
We
successfully concluded two transactions to consolidate our ownership of
Studio 1+1 in Ukraine that are intended to allow us to put those
operations on a path to
profitability.
|
|
·
|
Decisions
to award equity grants should only be taken during a period when
trading in our shares is permitted in accordance with our Insider Trading
Policy.
|
|
·
|
All
grants to Section 16 officers, including grants to new hires, must be
approved at a meeting of the Compensation Committee, including telephonic
meetings, and may not occur through action by unanimous written
consent.
|
|
·
|
The
grant date of any equity awards approved at a meeting of the Compensation
Committee shall be the date of such meeting or, in connection with an
anticipated hire or an award to be granted in several installments, a
future date established by the Compensation Committee at such meeting,
subject to employment commencing.
|
|
·
|
The
exercise price for all option awards shall not be less than the closing
price of our shares on the date of
grant.
|
Year
|
Salary
($)
|
Bonus
($)(1)
|
Option
awards
($)(2)
|
Non-Equity
Incentive Plan Compensation
($)(1)
|
All
Other Compensation
($)
|
Total
Compensation
($)
|
|||||||||||||||||||
Michael
Garin
Chief
Executive Officer
|
2008
|
1,200,000
|
-
|
-
(3)
|
-
|
269,585(5)
|
1,469,585
|
||||||||||||||||||
2007
|
745,462(4)
|
2,600,000
|
1,167,164
|
-
|
192,600(5)
|
4,705,226
|
|||||||||||||||||||
2006
|
625,000
|
1,400,000
|
913,055
|
-
|
152,012(5)
|
3,090,067
|
|||||||||||||||||||
|
|||||||||||||||||||||||||
Adrian
Sarbu
President
and
Chief
Operating Officer
|
2008
|
1,188,267
|
|
1,000,000
|
432,680
|
-
|
3,290(6)
|
2,624,237
|
|||||||||||||||||
2007
|
1,139,819(7)
|
-
|
133,158
|
5,611,781
|
3,290(6)
|
6,888,048
|
|||||||||||||||||||
2006
|
924,887
|
-
|
86,982
|
426,887
|
2,630(6)
|
1,441,386
|
|||||||||||||||||||
Wallace
Macmillan
Chief
Financial Officer
|
2008
|
532,198
|
238,703
|
354,212
|
-
|
283,902(8)
|
1,409,015
|
||||||||||||||||||
2007
|
561,353(9)
|
35,000
|
252,321
|
561,353
|
20,415(6)
|
1,430,443
|
|||||||||||||||||||
2006
|
436,950
|
-
|
188,226
|
297,774
|
3,763(6)
|
926,713
|
|||||||||||||||||||
Marina
Williams
Executive
Vice President
|
2008
|
355,794(10)
|
-
|
337,814
|
-
|
253,462(11)
|
947,070
|
||||||||||||||||||
2007
|
468,004(10)
|
-
|
379,384
|
312,002
|
12,041(6)
|
1,171,432
|
|||||||||||||||||||
2006
|
402,454
|
500,000
|
276,738
|
621,575
|
3,736(6)
|
1,704,503
|
Estimated
Possible Payouts under Non-Equity Incentive Plan Awards (1)
|
All
Other Option Awards: Number of Securities Underlying
Options
|
Exercise
/ Base Price of Option Awards
($/Sh)
|
Grant
Date Fair Value of Stock and Option Award
($)(2)
|
||||||||||||||||||
Grant
Date
|
Target
($)
|
Maximum
($)
|
|||||||||||||||||||
Michael
Garin
|
12/16/2008
|
1,192,389
|
1,788,584
|
30,000
(3)
|
22.64
|
211,790
|
|||||||||||||||
Adrian
Sarbu
|
12/16/2008
|
1,098,514
|
1,647,771
|
50,000
(4)
|
22.64
|
462,254
|
|||||||||||||||
Wallace
Macmillan
|
12/16/2008
|
419,682
|
(5)
|
12,500
(4)
|
22.64
|
115,563
|
|||||||||||||||
Marina
Williams
|
04/01/2008
|
299,159
|
(5)
|
12,500
(6)
|
88.51
|
386,242
|
Option
Awards
|
||||||||||||||
Grant
Date
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Option
Exercise Price
($)
|
Option
Expiration Date
|
||||||||||
Michael
Garin
|
192,500
|
127,500
|
||||||||||||
02/02/2004
|
160,000
|
-
|
$19.49
|
01/31/2012
|
||||||||||
06/02/2005
|
22,500
|
7,500
(1)
|
44.50
|
01/31/2012
|
||||||||||
06/08/2006
|
10,000
|
10,000
(1)
|
56.42
|
01/31/2012
|
||||||||||
07/28/2006(2)
|
-
|
80,000
|
60.64
|
01/31/2012
|
||||||||||
12/16/2008(3)
|
-
|
30,000
|
22.64
|
01/31/2012
|
||||||||||
Adrian
Sarbu
|
22,500
|
77,500
|
||||||||||||
11/18/2004
|
8,000
|
-
|
$32.99
|
11/17/2014
|
||||||||||
12/21/2005(4)
|
3,000
|
1,000
|
57.00
|
12/20/2015
|
||||||||||
06/08/2006(4)
|
4,000
|
4,000
|
56.42
|
06/07/2016
|
||||||||||
12/05/2007(4)
|
7,500
|
22,500
|
113.56
|
12/04/2015
|
||||||||||
12/16/2008(4)
|
-
|
50,000
|
22.64
|
12/15/2016
|
||||||||||
Wallace
Macmillan
|
45,875
|
34,625
|
||||||||||||
05/29/2003
|
5,000
|
-
|
$10.37
|
05/28/2013
|
||||||||||
05/05/2004
|
20,000
|
-
|
18.93
|
05/04/2014
|
||||||||||
06/02/2005(4)
|
7,500
|
2,500
|
44.50
|
06/01/2015
|
||||||||||
06/08/2006(4)
|
4,000
|
4,000
|
56.42
|
06/07/2016
|
||||||||||
12/14/2006(4)
|
6,250
|
6,250
|
72.05
|
12/13/2016
|
||||||||||
12/05/2007(4)
|
3,125
|
9,375
|
113.56
|
12/04/2015
|
||||||||||
12/16/2008(4)
|
-
|
12,500
|
22.64
|
12/15/2016
|
||||||||||
Marina
Williams
|
24,792
|
0
|
||||||||||||
11/22/2004
|
6,667
|
-
|
$32.80
|
04/19/2009
|
||||||||||
06/02/2005(5)
|
8,750
|
-
|
44.50
|
04/19/2009
|
||||||||||
05/01/2006(5)
|
6,250
|
-
|
64.81
|
04/19/2009
|
||||||||||
04/02/2007(5)
|
3,125
|
-
|
87.91
|
04/19/2009
|
Name
of Director
|
Fees
Earned or Paid in Cash ($)
|
Option Awards
($)(1)
|
Total
Compensation ($)
|
|||||||||
Ronald
Lauder
|
-
|
226,152
(2)
|
226,152
|
|||||||||
Herbert
Granath
|
90,000
|
181,232
|
271,232
|
|||||||||
Frank
Ehmer(3)
|
|
-
|
-
|
-
|
||||||||
Charles
Frank
|
72,000
|
219,578
|
291,578
|
|||||||||
Herbert
Kloiber
|
60,000
|
157,353
|
217,353
|
|||||||||
Igor
Kolomoisky
|
-
|
73,635
|
73,635
|
|||||||||
Alfred
Langer
|
72,000
|
228,003
|
300,003
|
|||||||||
Bruce
Maggin
|
60,000
|
216,661
|
276,661
|
|||||||||
Ann
Mather
|
67,000
|
208,821
|
275,821
|
|||||||||
Duco
Sickinghe(3)
|
12,500
|
9,421
|
9,421
|
|||||||||
Christian
Stahl
|
-
|
-
|
-
|
|||||||||
Eric
Zinterhofer
|
-
|
223,109
|
223,109
|
Equity
Compensation Plan Information
|
||||||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Plan
Category
|
Number
of Securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted
average exercise price of outstanding options, warrants and
rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|||||||||
Equity
compensation plans approved by security holders
|
1,439,042 | (1) | $ | 50.81 | 564,564 | |||||||
Equity
compensation plans not approved by security holders
|
-- | -- | -- | |||||||||
Total
|
1,439,042 | $ | 50.81 | 564,564 |
Beneficial
Ownership of
|
Beneficial
Ownership of
|
Common
Stock
|
||||||||||||||||||||||
Class
A Common
|
Class
B Common
|
%
of
|
%
|
|||||||||||||||||||||
Stock
(a)
|
Stock
|
Voting
|
Owner-
|
|||||||||||||||||||||
Number
|
Percent
|
Number
|
Percent
|
Power
|
ship
|
|||||||||||||||||||
Name of Beneficial Owner
|
(b)
|
(b)
|
||||||||||||||||||||||
Ronald
S. Lauder (1)(11)
|
60,000
|
*
|
6,391,339
(30)
|
100%
|
64.01%
|
15.21%
|
||||||||||||||||||
Frank
Ehmer (2)
|
--
|
--
|
|
|||||||||||||||||||||
Charles
R. Frank, Jr.
|
35,700
(16)
|
*
|
--
|
--
|
*
|
|
*
|
|||||||||||||||||
Herbert
A. Granath
|
23,200
(17)
|
*
|
|
--
|
--
|
*
|
*
|
|||||||||||||||||
Herbert
Kloiber
|
6,500
(18)
|
*
|
--
|
--
|
*
|
*
|
||||||||||||||||||
Igor
Kolomoisky
|
1,625,537
(19)
|
4.51%
|
--
|
--
|
1.64%
|
3.84%
|
||||||||||||||||||
Alfred
W. Langer
|
49,300
(20)
|
*
|
--
|
--
|
*
|
*
|
||||||||||||||||||
Bruce
Maggin
|
36,500
(21)
|
*
|
--
|
--
|
*
|
*
|
||||||||||||||||||
Ann
Mather
|
24,500
(22)
|
*
|
--
|
--
|
*
|
*
|
||||||||||||||||||
Duco
Sickinghe (3)
|
-- (23)
|
*
|
--
|
--
|
--
|
--
|
||||||||||||||||||
Christian
Stahl
|
--
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||
Eric
Zinterhofer
|
36,500
(24)
|
*
|
--
|
--
|
*
|
*
|
||||||||||||||||||
|
|
|||||||||||||||||||||||
Wallace
Macmillan
|
50,962
(25)
|
*
|
--
|
--
|
*
|
*
|
||||||||||||||||||
Adrian
Sarbu
|
24,500
(26)
|
*
|
--
|
--
|
*
|
*
|
||||||||||||||||||
Michael
N. Garin (4)
|
320,000
(27)
|
*
|
--
|
--
|
*
|
*
|
||||||||||||||||||
Marina
Williams (5)
|
-- (28)
|
*
|
--
|
--
|
*
|
*
|
||||||||||||||||||
|
||||||||||||||||||||||||
All
directors and executive officers as a group
(15
persons)
|
2,293,199
(29)
|
6.26%
|
6,391,339
|
100%
|
65.85%
|
20.19%
|
||||||||||||||||||
Apax
Partners Europe Managers Limited (6)(12)
|
60,000
|
|
*
|
6,312,839
|
100%
|
63.73%
|
15.05%
|
|||||||||||||||||
Apax
Europe VI GP Co. Ltd.(6)(12)
|
60,000
|
*
|
6,312,839
|
100%
|
63.73%
|
15.05%
|
||||||||||||||||||
Testora
Ltd (7)
|
3,500,000
|
9.72%
|
|
--
|
--
|
3.53%
|
8.27%
|
|||||||||||||||||
T.
Rowe Price Associates, Inc. (8)(13)
|
|
1,871,700
|
5.20%
|
--
|
--
|
1.89%
|
4.42%
|
|||||||||||||||||
FMR
LLC (9)(14)
|
3,933,908
|
10.92%
|
--
|
--
|
3.97%
|
9.29%
|
||||||||||||||||||
Capital
Research Global Investors (10)(15)
|
2,500,000
|
6.94%
|
|
--
|
--
|
2.52%
|
|
5.90%
|
(a)
|
Does
not include 6,312,839 shares of Class A Common Stock issuable upon
conversion of shares of Class B Common Stock. Shares of Class B
Common Stock are convertible at any time into shares of Class A Common
Stock for no additional consideration on a one-for-one
basis.
|
(b)
|
Represents
the percentage of total voting power and the percentage ownership of the
shares of Class A Common Stock and Class B Common Stock currently
beneficially owned by each identified shareholder and all directors and
executive officers as a group. The shares of Class A Common
Stock and Class B Common Stock are the only authorized classes of our
capital stock with shares
outstanding.
|
(c)
|
None
of the shares of the directors or executive officers are pledged, except
as provided in footnote 19.
|
|
1.
|
The
address of Ronald S. Lauder is Suite 4200, 767 Fifth Avenue, New York, New
York 10153.
|
|
2.
|
On
October 22, 2008, Frank Ehmer was re-appointed to the Board of
Directors.
|
|
3.
|
On
October 22, 2008, Duco Sickinghe was appointed to the Board of
Directors.
|
|
4.
|
Michael
Garin served as Chief Executive Officer until January 1, 2009. On February
2, 2009, he retired as non-executive Vice-Chairman of the
Board.
|
|
5.
|
On
October 21, 2008, Marina Williams resigned as Executive
Vice-President.
|
|
6.
|
Information
in respect of the beneficial ownership of Apax Partners Europe Managers
Limited and Apax Europe VI GP Co. Limited (other than percentage
ownership) is based upon a statement on Schedule 13D jointly filed by them
on September 6, 2006. The address of Apax Partners Europe Managers Limited
is 33 Jermyn Street, London SW1Y 6DN, United Kingdom. The address of
Apax Europe VI GP Co. Limited is 13-15 Victoria Road,
St. Peter Port, Guernsey, Channel Islands GYI
3ZD.
|
|
7.
|
Information
in respect of the beneficial ownership of Testora Limited (other than
percentage ownership) is based upon a statement on Schedule 13G filed by
it on January 11, 2006. The address of Testora Limited is
Grigori Afxentiou, 8, El.Pa. Livadioti, Flat/Office 401, P.C. 6023,
Larnaca, Cyprus.
|
|
8.
|
Information
in respect of the beneficial ownership of T. Rowe Price Associates, Inc.
(other than percentage ownership) is based upon a statement on Schedule
13G/A filed by it on December 10, 2008. The address of T. Rowe Price
Associates, Inc. is 100 E. Pratte Street, Baltimore, Maryland
21202.
|
|
9.
|
Information
in respect of the beneficial ownership of FMR LLC (other than percentage
ownership) is based upon a statement on Schedule 13G/A filed jointly with
Edward C. Johnson 3d and Fidelity Management and Research Company on
January 12, 2009. The address of FMR LLC is 82 Devonshire Street, Boston,
Massachusetts 02109.
|
10.
|
Information
in respect of the beneficial ownership of Capital Research Global
Investors (other than percentage ownership) is taken from a statement on
Schedule 13G filed by it on February 13, 2009. The address of Capital
Research Global Investors is 333 South Hope Street, Los Angeles, CA
90071.
|
11.
|
In
a Schedule 13D/A filed by Mr. Lauder on September 8, 2006, Mr. Lauder
reported that he, RSL Investments Corporation (“RIC”), RSL
Investment LLC (“RIL”) and CME
Holdco, L.P. each have joint beneficial ownership with Apax Partners
Europe Managers Limited and Apax Europe VI G.P. Limited of 6,312,839
shares of Class B Common Stock and 60,000 shares of Class A Common Stock.
RIC is a holding company for various investments of Mr. Lauder. Mr. Lauder
is the sole shareholder of RIC. Mr. Lauder is the sole Director and
Chairman of RIC. RIC is the sole member of RIL. Mr. Lauder is President of
RIL. RIL is sole general partner of CME Holdco, L.P. On August 28, 2006,
Mr. Lauder, RIC, RIL and certain others entered into a purchase agreement
with Adele Guernsey L.P. Pursuant to that agreement, Mr. Lauder, RIC, RIL
and others contributed all 6,312,839 outstanding shares of Class B Common
Stock and 60,000 shares of Class A Common Stock to CME Holdco, acquiring
100% of the partnership interest therein. Mr. Lauder and such other
persons subsequently sold limited partnership interests to Adele Guernsey
L.P,
|
aggregating
approximately 49.72% of the total partnership interests in CME Holdco. In
addition, Mr. Lauder directly owns currently exercisable options to
purchase 78,500 shares of Class B Common Stock.
|
||
12.
|
Apax
Partners Europe Managers Limited (“Apax”), a
company organized under the laws of England, owns all of the issued share
capital of APAX WW Nominees Limited (“Apax WW
Nominees”) and APAX WW No. 2 Nominees Limited (“Apax WW No. 2
Nominees”). Apax WW Nominees and Apax WW No. 2 Nominees are the
registered owners of 100% of the share capital of Adele (Guernsey) GP
Limited (“Adele
GP”). Apax Europe VI GP Co. Limited, a Guernsey company, is the
general partner of Apax Europe VI GP, L.P. Inc. Apax Europe VI GP, L.P.
Inc is the general partner of Apax Europe VI-A, L.P. and Apax Europe VI-1,
L.P (the “Europe
VI Funds”). The Europe VI Funds are collectively the beneficial
owner of 100% of Adele GP. Adele GP is the general partner of Adele
(Guernsey) L.P. In the Schedule 13D filed by Apax on September 6, 2006,
Apax and Apax Europe VI GP Co. Limited are reported as having shared
voting power over 60,000 shares of Class A Common Stock and 6,312,839
shares of Class B Common Stock. These shares are jointly held as described
in footnote 6, above.
|
13.
|
These
securities are owned by various individual and institutional investors,
including T. Rowe Price International and the T. Rowe Price Mutual Funds,
to whom which T. Rowe Price Associates, Inc. serves as investment adviser
with power to direct investments and/or sole power to vote the securities.
For purposes of the reporting requirements of the Securities Exchange Act
of 1934, T. Rowe Price Associates, Inc. is deemed to be a beneficial owner
of such securities; however, T. Rowe Price Associates, Inc. expressly
disclaims that it is, in fact, the beneficial owner of such
securities.
|
14.
|
FMR
LLC (“FMR”) is the
beneficial owner of 3,933,908 shares of Class A Common Stock, including
3,605,508 shares of Class A Common Stock which are beneficially owned by a
wholly-owned subsidiary of FMR, Fidelity Management & Research
Company, who acts as an investment adviser to various investment companies
and over which FMR has sole dispositive power, and 25,701 shares of Class
A Common Stock beneficially owned by subsidiaries of FMR and over which
FMR has the power to vote or direct the vote of such shares. In addition,
FMR reports beneficial ownership of 302,699 shares of Class A Common Stock
that are beneficially owned by a company controlled by Edward C. Johnson
3d, Chairman of FMR.
|
15.
|
These
securities are held by Capital Research Global Investors on behalf of
SMALLCAP World Fund, Inc., an investment company registered under section
8 of the Investment Company Act of 1940, to whom Capital Research Global
Investors acts as investment adviser. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Capital Research
Global Investors is deemed to be a beneficial owner of such securities;
however, Capital Research Global Investors expressly disclaims that it is,
in fact, the beneficial owner of such
securities.
|
16.
|
Consists
of (i) 3,200 shares of Class A Common Stock; (ii) 12,000 shares of Class A
Common Stock underlying options which are currently exercisable, or will
become exercisable within 60 days, at an exercise price of $22.11 per
share and expire on June 1, 2014; (iii) 6,000 shares of Class A Common
Stock underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $44.50 per share and
expire on June 1, 2015; (iv) 4,500 shares of Class A Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $58.85 per share and
expire on June 6, 2016; (v) 5,000 shares of Class A Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $89.79 per share and
expire on June 4, 2012; and (vi) 5,000 shares of Class A Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $104.36 per share and
expire on June 2, 2013. Does not include 1,500 shares of Class
A Common Stock underlying options with an exercise price of $58.85 per
share which are not currently exercisable and will not become exercisable
within 60 days and expire on June 6,
2016.
|
17.
|
Consists
of (i) 3,200 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $10.897 per share and expire on May 21, 2013; (ii) 4,000
shares of Class A Common Stock underlying options which are currently
exercisable, or will become exercisable within 60 days, at an exercise
price of $22.11 per share and expire on June 1, 2014; (iii) 3,000 shares
of Class A Common Stock underlying options which are currently
exercisable, or will become exercisable within 60 days, at an exercise
price of $44.50 per share and expire on June 1, 2015; (iv) 3,000 shares of
Class A Common Stock underlying options which are currently exercisable,
or will become exercisable within 60 days, at an exercise price of $58.85
per share and expire on June 6, 2016; (v)
5,000
|
shares
of Class A Common Stock underlying options which are currently
exercisable, or will become exercisable within 60 days, at an exercise
price of $89.79 per share and expire on June 4, 2012; and (vi) 5,000
shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $104.36 per share and expire on June 2, 2013. Does not
include 1,500 shares of Class A Common Stock underlying options with an
exercise price of $58.85 per share which are not currently exercisable and
will not become exercisable within 60 days and expire on June 6,
2016.
|
||
18.
|
Consists
of (i) 1,500 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $58.85 per share and expire on June 6, 2016; and (ii)
5,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $104.36 per share and expire on June 2, 2013. Does not
include 1,500 shares of Class A Common Stock underlying options with an
exercise price of $58.85 per share which are not currently exercisable and
will not become exercisable within 60 days and expire on June 6,
2016.
|
19.
|
Consists
of (i) 1,275,227 shares of Class A Common Stock held directly by Mr.
Kolomoisky; (ii) 341,710 shares of Class A Common Stock owned by Mr.
Kolomoisky and pledged in connection with a repurchase arrangement with a
third party; (iii) 3,600 shares of Class A Common Stock owned by Athina
Investments Limited; and (iv) 5,000 shares of Class A Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $104.36 per share and
expire on June 2, 2013.
|
20.
|
Consists
of (i)12,800 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $10.897 per share and expire on May 21, 2013; (ii)
16,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $22.11 per share and expire on June 1, 2014; (iii) 6,000
shares of Class A Common Stock underlying options which are currently
exercisable, or will become exercisable within 60 days, at an exercise
price of $44.50 per share and expire on June 1, 2015; (iv) 4,500 shares of
Class A Common Stock underlying options which are currently exercisable,
or will become exercisable within 60 days, at an exercise price of $58.85
per share and expire on June 6, 2016; (v) 5,000 shares of Class A Common
Stock underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $89.79 per share and
expire on June 4, 2012; and (vi) 5,000 shares of Class A Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $104.36 per share and
expire on June 2, 2013. Does not include 1,500 shares of Class A Common
Stock underlying options with an exercise price of $58.85 per share which
are not currently exercisable and will not become exercisable within 60
days and expire on June 6, 2016.
|
21.
|
Consists
of (i) 8,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $10.897 per share and expire on May 21, 2013; (ii) 8,000
shares of Class A Common Stock underlying options which are currently
exercisable, or will become exercisable within 60 days, at an exercise
price of $22.11 per share and expire on June 1, 2014; (iii) 6,000 shares
of Class A Common Stock underlying options which are currently
exercisable, or will become exercisable within 60 days, at an exercise
price of $44.50 per share and expire on June 1, 2015; (iv) 4,500 shares of
Class A Common Stock underlying options which are currently exercisable,
or will become exercisable within 60 days, at an exercise price of $58.85
per share and expire on June 6, 2016; (v) 5,000 shares of Class A Common
Stock underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $89.79 per share and
expire on June 4, 2012; and (vi) 5,000 shares of Class A Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $104.36 per share and
expire on June 2, 2013. Does not include 1,500 shares of Class A Common
Stock underlying options with an exercise price of $58.85 per share which
are not currently exercisable and will not become exercisable within 60
days and expire on June 6, 2016.
|
22.
|
Consists
of (i) 4,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $22.11 per share and expire on June 1, 2014; (ii) 6,000
shares of Class A Common Stock underlying options which are currently
exercisable, or will become exercisable within 60 days, at an exercise
price of $44.50 per share and expire on June 1,
2015;
|
(iii)
4,500 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $58.85 per share and expire on June 6, 2016; (iv) 5,000
shares of Class A Common Stock underlying options which are currently
exercisable, or will become exercisable within 60 days, at an exercise
price of $89.79 per share and expire on June 4, 2012; and (v) 5,000 shares
of Class A Common Stock underlying options which are currently
exercisable, or will become exercisable within 60 days, at an exercise
price of $104.36 per share and expire on June 2, 2013. Does not
include 1,500 shares of Class A Common Stock underlying options with an
exercise price of $58.85 per share which are not currently exercisable and
will not become exercisable within 60 days and expire on June 6,
2016.
|
||
23.
|
Does
not include 5,000 shares of Class A Common Stock underlying options with
an exercise price of $25.29 per share which are not currently exercisable
and will not become exercisable within 60 days and expire on October 21,
2013.
|
24.
|
Consists
of (i) 16,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $22.11 per share and expire on June 1, 2014; (ii) 6,000
shares of Class A Common Stock underlying options which are currently
exercisable, or will become exercisable within 60 days, at an exercise
price of $44.50 per share and expire on June 1, 2015; and (iii) 4,500
shares of Class A Common Stock underlying options which are currently
exercisable, or will become exercisable within 60 days, at an exercise
price of $58.85 per share and expire on June 6, 2016; (iv) 5,000 shares of
Class A Common Stock underlying options which are currently exercisable,
or will become exercisable within 60 days, at an exercise price of $89.79
per share and expire on June 4, 2012; and (v) 5,000 shares of Class A
Common Stock underlying options which are currently exercisable, or will
become exercisable within 60 days, at an exercise price of $104.36 per
share and expire on June 2, 2013. Does not include 1,500 shares of Class A
Common Stock underlying options with an exercise price of $58.85 per share
which are not currently exercisable and will not become exercisable within
60 days and expire on June 6, 2016.
|
25.
|
Consists
of (i) 587 shares of Class A Common Stock; (ii) 5,000 shares of Class A
Common Stock underlying options which are currently exercisable, or will
become exercisable within 60 days, at an exercise price of $10.37 per
share and expire on May 21, 2013; (iii) 20,000 shares of Class A Common
Stock underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $18.93 per share and
expire on May 4, 2014; (iv) 10,000 shares of Class A Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $44.50 per share and
expire on June 1, 2015; (v) 6,000 shares of Class A Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $56.42 per share and
expire on June 7, 2016; (vi) 6,250 shares of Class A Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $72.05 per share and
expire on December 13, 2016; and (vii) 3,125 shares of Class A Common
Stock underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $113.56 per share and
expire on December 4, 2015. Does not include (i) 2,000 shares of Class A
Common Stock underlying options with an exercise price of $56.42 per share
which are not currently exercisable and will not become exercisable within
60 days and expire on June 7, 2016; (ii) 6,250 shares of Class A Common
Stock underlying options with an exercise price of $72.05 per share which
are not currently exercisable and will not become exercisable within 60
days and expire on December 13, 2016; (iii) 9,375 shares of Class A Common
Stock underlying options with an exercise price of $113.56 per share which
are not currently exercisable and will not become exercisable within 60
days and expire on December 4, 2015; and (iv) 12,500 shares of Class A
Common Stock underlying options with an exercise price of $22.64 per share
which are not currently exercisable and will not become exercisable within
60 days and expire on December 15,
2016.
|
26.
|
Consists
of (i) 8,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $32.99 per share and expire on November 17, 2014; (ii)
3,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $57.00 per share and expire on December 20, 2015; (iii)
6,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $56.42 per share and expire on June 7, 2016; and (iv)
7,500 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $113.56 per share and expire
on
|
December
4, 2015. Does not include (i) 1,000 shares of Class A Common Stock
underlying options with an exercise price of $57.00 per share which are
not currently exercisable and will not become exercisable within 60 days
and expire on December 20, 2015; (ii) 2,000 shares of Class A Common Stock
underlying options with an exercise price of $56.42 per share which are
not currently exercisable and will not become exercisable within 60 days
and expire on June 7, 2016; (iii) 22,500 shares of Class A Common Stock
underlying options with an exercise price of $113.56 per share which are
not currently exercisable and will not become exercisable within 60 days
and expire on December 4, 2015; and (iv) 50,000 shares of Class A Common
Stock underlying options with an exercise price of $22.64 per share which
are not currently exercisable and will not become exercisable within 60
days and expire on December 15, 2016.
|
||
27.
|
Consists
of (i) 160,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $19.49 per share and expire on January 31, 2012; (ii)
30,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $44.50 per share and expire on January 31, 2012; (iii)
20,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $56.42 per share and expire on January 31, 2012; (iv)
80,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, with an
exercise price of $60.64 per share and expire on January 31, 2012; and (v)
30,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, with an
exercise price of $22.64 per share and expire on January 31, 2012.
Pursuant to the Settlement Agreement entered into between CME Development
Corporation and Mr. Garin on December 14, 2008, all of Mr. Garin’s
unvested options became exercisable on January 1, 2009 and expire on
January 31, 2012.
|
28.
|
Ms.
Williams’ options expired on April 19,
2009.
|
29.
|
Consists
of (i) 1,684,324 shares of Class A Common Stock; and (ii) 608,875 shares
of Class A Common Stock underlying options which are currently exercisable
or will become exercisable within 60 days. Does not include 122,625 shares
of Class A Common Stock underlying options which are not currently
exercisable and will not become exercisable within 60
days.
|
30.
|
Includes
(i) 2,000 shares of Class B Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days, at an
exercise price of $0.26 per share and 8,000 shares of Class B Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days at an exercise price of $0.308 per share and
expire on May 18, 2011; (ii) 16,000 shares of Class B Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $2.0558 per share and
expire on May 15, 2012; (iii) 16,000 shares of Class B Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $11.44 per share and
expire on May 21, 2013; (iv) 16,000 shares of Class B Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $23.22 per share and
expire on June 1, 2014; (v) 6,000 shares of Class B Common
Stock underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $46.725 per share and
expire on June 1, 2015; (vi) 4,500 shares of Class B Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $61.79 per share and
expire on June 6, 2016; (vii) 5,000 shares of Class B Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $94.28 per share and
expire on June 4, 2012; and (viii) 5,000 shares of Class B Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $109.58 per share and
expire on June 2, 2013. Does not include 1,500 shares of Class
B Common Stock underlying options with an exercise price of $61.79 per
share which are not currently exercisable and will not become exercisable
within 60 days and expire on June 6,
2016.
|
Submitted
by:
|
|
Alfred
W. Langer
|
|
Charles
R. Frank, Jr.
|
|
Ann mather
|
|
Members
of the Audit Committee
|
|
·
|
a
registration rights agreement with TW Media
Holdings;
|
|
·
|
an
irrevocable voting deed and corporate representative appointment with Mr.
Lauder, RSL Savannah and TW Media Holdings, referred to herein as the
voting agreement; and
|
|
·
|
an
investor rights agreement with TW Media Holdings, Mr. Lauder and RSL
Savannah, RSL Investments LLC and RSL Investments Corporation, each a
company wholly owned by Mr. Lauder.
|
|
·
|
reviewed
drafts dated March 20, 2009 of the subscription agreement, the
registration rights agreement, the voting agreement and the investor
rights agreement;
|
|
·
|
reviewed
a draft dated March 22, 2009 of the letter agreement among Mr. Lauder, RSL
Savannah and the Company;
|
|
·
|
reviewed
certain publicly available business and financial information concerning
the Company and the industries in which it
operates;
|
|
·
|
compared
the proposed financial terms of the transaction with the publicly
available financial terms of certain precedent minority investment
transactions that J.P. Morgan deemed relevant, including the consideration
paid in such transactions;
|
|
·
|
compared
the financial and operating performance of the Company with publicly
available information concerning certain other companies that J.P. Morgan
deemed relevant and reviewed the current and historical market prices of
the shares of Class A Common Stock of the Company and certain publicly
traded shares of such other
companies;
|
|
·
|
reviewed
certain internal financial analyses and forecasts prepared by, or at the
direction of, the management of the Company;
and
|
|
·
|
performed
such other financial studies and analyses and considered such other
information as J.P. Morgan deemed appropriate for the purposes of its
opinion.
|
Name
and Position
|
Number
of Options
|
|
Non-employee
director
|
10,000
|
Name
|
Number of Shares
|
|
Ronald
S. Lauder
|
200,000
|
|
Frank
Ehmer
|
-
|
|
Charles
R. Frank, Jr.
|
70,000
|
|
Herbert
A. Granath
|
70,000
|
|
Herbert
Kloiber
|
16,000
|
|
Igor
Kolomoisky
|
5,000
|
|
Alfred
W. Langer
|
80,000
|
|
Bruce
Maggin
|
54,000
|
|
Ann
Mather
|
38,000
|
|
Duco
Sickinghe
|
5,000
|
|
Christian
Stahl
|
-
|
|
Eric
Zinterhofer
|
38,000
|
|
Michael
Garin
|
320,000
|
|
Adrian
Sarbu
|
143,000
|
|
Wallace
Macmillan
|
95,500
|
|
Marina
Williams
|
72,500
|
|
Current
Executive Officers as a Group
|
238,500
|
|
Current
Directors who are not Executive Officers as a Group
|
576,000
|
|
All
Employees (excluding current Executive Officers)
|
773,800
|
By
order of the Board of Directors,
|
|
/s/ Daniel Penn | |
Daniel
Penn
|
|
Secretary
|
|
·
|
the
Company will sell to the Acquiror an aggregate of 14,500,000 Class A
shares and 4,500,000 Class B shares for cash consideration in an aggregate
amount of $241,500,000 (the “Consideration”) pursuant to the Subscription
Agreement;
|
|
·
|
the
Company and the Acquiror will enter into a Registration Rights Agreement
(the “Registration Rights Agreement”) to provide for certain matters with
respect to the registration of shares acquired in the Capital
Investment;
|
|
·
|
the
Acquiror, Ronald S. Lauder and certain affiliates (collectively, the
“Controlling Shareholder”) and the Company will enter into an Irrevocable
Voting Deed and Corporate Representative Appointment (the “Voting
Agreement”) pursuant to which, among other things, the Acquiror will agree
to vote its shares as instructed by the Controlling Shareholder for a
period equal to the later of (i) four years following the consummation of
the Capital Investment and (ii) the date on which no Class B shares remain
outstanding; provided, that under the Voting Agreement the Acquiror shall
retain voting rights with respect to 2,250,000 Class B shares and
7,250,000 Class A shares in the event of a vote on a change of control
transaction by the Company’s shareholders as provided for in the Company’s
organizational documents and/or applicable law;
and
|
|
·
|
the
Company, the Acquiror and the Controlling Shareholder will enter into an
Investor Rights Agreement (the “Investor Rights Agreement”) to provide for
certain matters with respect to the issuance, ownership, voting and
transfer of securities of the Company and the Company and the Controlling
Shareholder will enter into a Letter Agreement (the “Letter Agreement”)
pursuant to which the Company will indemnify the Controlling Shareholder
for certain matters.
|
1.
|
Purpose
|
2.
|
Adoption
of the Plan
|
3.
|
Common
Shares Subject to Plan
|
4.
|
Administration
|
5.
|
Committee
|
6.
|
Eligibility
|
7.
|
Awards
of Options
|
A.
|
Options
(each an “Option”) may be granted alone or in addition to other Awards
granted under the Plan and may be of two types: “incentive stock options”
(within the meaning of Section 422 of the Code) and “non-incentive stock
options”. Any Option granted under the Plan shall be in such form as the
Committee may from time to time
approve.
|
B.
|
The
Committee shall have the authority to grant any Participant incentive
stock options, non-incentive stock options or both types of Options (in
each case with or without other Awards). Incentive stock
options may be granted only to employees of the Company and its
Subsidiaries. To the extent that any Option is not designated as an
incentive stock option or, even if so designated, does not qualify as an
incentive stock option, it shall constitute a non-incentive stock
option. Incentive stock options may be granted only within 10
years from the date the Plan is adopted, or the date the Plan is approved
by the Company’s shareholders, whichever is
earlier.
|
C.
|
Options
shall be evidenced by option agreements in a form approved by the
Committee. An option agreement shall indicate on its face whether it is
intended to be an agreement for an incentive stock option or a
non-incentive stock option. The grant date of an Option shall be the date
the Committee determines to be the grant date; provided, that the grant
complies in all respects with the pricing requirements in Section
8.
|
D.
|
Anything
in the Plan to the contrary notwithstanding, no term of the Plan relating
to incentive stock options shall be interpreted, amended or altered, nor
shall any discretion or authority granted under the Plan be exercised, so
as to disqualify the Plan under Section 422 of the Code or, without the
consent of the Participant affected, to disqualify any incentive stock
option under Section 422 of the
Code.
|
8.
|
Option
Exercise Prices
|
A.
|
The
initial per share option price of an Option which is an incentive stock
option shall be the price determined by the Committee, but not less than
the fair market value of a Class A Common Share or Class B Common Share on
the date of grant;
provided, however, that, in the case of a Participant who owns, or
is deemed to own, Common Shares representing more than 10% of the total
combined voting power of all classes of stock of the Company or any parent
or subsidiary corporation of the Company, determined pursuant to rules
applicable to Section 422(b)(6) of the Code (a “Ten-Percent Holder”), at
the time an Option which is an incentive stock option is granted to him,
the initial per share option price shall not be less than 110% of the fair
market value of a Class A Common Share or Class B Common Share on the date
of grant.
|
B.
|
The
initial per share option price of any Option which is a non-incentive
stock option granted to an employee shall be the price determined by the
Committee, but not less than the fair market value of a Class A Common
Share or Class B Common Share on the date of grant. The Committee may
provide that the option price per share will increase to reflect the cost
of the capital or any other objective measure or may set the initial
exercise price at an amount in excess of the fair market value at the time
of grant. The per share option price of any Option granted to a
non-employee director pursuant to Section 24.A. shall be determined in the
same manner as the per share option price for options granted to
employees, and the per share option price of an Option granted to a
non-employee director pursuant to Section 24.B. shall be determined as
provided in Section 24.B.
|
C.
|
For
all purposes of the Plan, the fair market value of a Class A Common Share
or a Class B Common Share on any date shall be equal to (i) if, on such
day, the Class A Common Shares shall be traded on a national securities
exchange, the closing sales price of a Class A Common Share as published
by such national securities exchange or if there is no sale of the Class A
Common Shares on such date, the average of the bid and asked price on such
exchange at the close of trading on such date, or (ii) if the Class A
Common Shares are not listed on a national securities exchange on such
date, and are traded on a national securities market, the average of the
bid and asked price in the over-the-counter market at the close of trading
on such date, or (iii) if the provisions of clause (i) and clause (ii)
shall not be applicable, such amount as shall be determined in good faith
by the Board; provided, that the exercise price shall not be less than the
par value of a share of Common
Stock.
|
9.
|
Option
Term
|
10.
|
Limitations
on Amount of Incentive Stock Options
Granted
|
11.
|
Exercise
of Options
|
A.
|
Each
Option shall be exercisable and the total number of shares subject thereto
shall be purchasable in installments, which need not be equal, as
specified in the Option. Except as otherwise determined by the Committee,
the first installment shall not become exercisable during the period
commencing on the date of the granting of such Option and ending on the
day next preceding the first anniversary of such date. An installment once
exercisable shall remain exercisable until the Option expires or is
terminated.
|
B.
|
Except
as hereinbefore otherwise set forth, an Option may be exercised either in
whole at any time or in part from time to
time.
|
C.
|
An
Option may be exercised only by a written notice of intent to exercise
such Option with respect to a specific number of Class A Common Shares or
Class B Common Shares and payment to the Company of the amount of the
option price for the number of Class A Common Shares or the Class B Common
Shares so specified; provided, however, that
all or any portion of such payment may be made in kind by the delivery of
Class A Common Shares or Class B Common Shares, as the case may be, having
a fair market value equal to the portion of the option price so paid;
provided, further,
however, that, subject to the requirements of Regulation T (as in
effect from time to time) promulgated under the United States Securities
Exchange Act of 1934, as amended, the Committee may implement procedures
to allow a broker chosen by a Participant to make payment of all of any
portion of the option price payable upon the exercise of an Option and
receive, on behalf of such Participant, all or any portion of the Class A
Common Shares or Class B Common Shares issuable upon such exercise; provided, further,
however, that any such exercise shall not violate Section 402 of
the United States Sarbanes-Oxley Act of
2002.
|
D.
|
Notwithstanding
the terms of this Section 11, the Board may, in its discretion, permit any
Option to be exercised, in whole or in part, prior to the time when it
would otherwise be exercisable.
|
12.
|
Transferability
|
13.
|
Restricted
Stock and Restricted Stock Units
|
A.
|
The
Committee may make (1) Awards of Class A Common Shares (without any
intervening Options) (“Restricted Stock”) or (2) Awards of units valued in
US dollars by reference to Class A Common Shares or otherwise based on
Class A Common Shares (“Restricted Stock Units”), in each case with such
vesting, restrictions, forfeiture provisions, performance requirements,
contingencies and other terms as provided herein or as the Committee shall
determine.
|
B.
|
The
Committee shall have the authority to grant any Participant Restricted
Stock or Restricted Stock Units or both Restricted Stock and Restricted
Stock Units (in each case with or without other Awards). The
grant date of Restricted Stock or Restricted Stock Units shall be the date
the Committee determines.
|
14.
|
Time-Based
Awards and Performance-Based Awards
|
A.
|
Awards
under Section 13 may be issued to vest in one or more installments over
the Participant’s period of employment or other service to the Company
(“Time-Based Awards”), or the Committee may make Awards that entitle the
Participant to receive a specified number of vested Class A Common Shares
(or the
|
equivalent
in cash at the discretion of the Committee) upon the attainment of one or
more performance goals or service requirements established by the
Committee (“Performance-Based Awards”).
|
|
B.
|
The
vesting schedule for any Time-Based Awards and the term for performance
for any Performance-Based Awards shall be set by the Committee at the time
of grant and shall not
exceed ten years (the “Restricted Period”). The Committee, in
its discretion, may structure such vesting schedule or term for
performance so that it constitutes a “substantial risk of forfeiture”
within the meaning of Section 409A of the Code, such that an Award and
payment thereunder can constitute a "short-term deferral" within the
meaning of Section 409A of the Code, or the Committee may choose other
terms and conditions for the Award such that the Award will not constitute
a short-term deferral under Section 409A of the
Code.
|
C.
|
The
performance criteria shall be determined by the Committee, in its
discretion, and shall be used as a basis for payment with respect to an
Award. Such criteria may include, but not be limited to, (i) attainment of
or growth in a specified level of earnings per share, (ii) Common Shares
price appreciation, (iii) attainment of or growth in a specified level of
net income or net operating income, (iv) earnings before interest and
taxes, (v) revenues, (vi) market share, (vii) cost reduction goals, (viii)
return on equity, (ix) operating cash flow, (x) return on assets, (xi) the
completion of certain corporate transactions or other strategic
objectives, or (xii) a combination of the
foregoing.
|
D.
|
An
Award under Section 13 may be issued in exchange for any consideration
which the Committee may deem appropriate in each individual instance,
including, without limitation:
|
|
(i)
|
cash
or cash equivalents;
|
|
(ii)
|
services
to be rendered to the Company or any Subsidiary (provided that, in such
case, the par value of the stock subject to such Award shall be paid in
cash or cash equivalents, unless the Committee provides
otherwise).
|
E.
|
The
Committee shall determine at the time of the grant of an Award of
Restricted Stock Units whether the Award shall be paid in Class A Common
Shares or in cash (based on the fair market value of such Restricted Stock
Unit as determined by reference to the fair market value of a Class A
Common Share on the date the Restricted Stock Unit has
vested).
|
15.
|
Restrictions
on Awards, Exercise
|
A.
|
Participants
who receive Awards of Restricted Stock shall deliver to the Company a
restricted stock agreement in a form approved by the Committee. Restricted
Stock Units shall be evidenced by a restricted stock unit agreement in a
form approved by the Committee. Such forms need not be identical for all
Participants.
|
B.
|
Shares
representing an Award of Restricted Stock shall be evidenced in such
manner as the Committee may deem appropriate, including book-entry
registration or issuance of one or more certificates (which may bear
appropriate legends referring to the terms, conditions and restrictions
applicable to such Award). Shares underlying an Award of
Restricted Stock Units shall be evidenced in such manner as the Committee
may deem appropriate.
|
C.
|
The
Committee may require that any certificates in respect of an Award of
Restricted Stock be held in custody by the Company until any restrictions
thereon shall have lapsed and that the Participant deliver a share
transfer form, endorsed in blank, relating to the Common Stock covered by
such Award that will permit the transfer to the Company of any or all
shares of Restricted Stock that shall be forfeited by means of repurchase
in accordance with the corresponding restricted stock agreement or shall
not become vested in accordance with the
Plan.
|
D.
|
A
Participant who receives an Award of Restricted Stock shall on receipt of
such Award be a shareholder of the Company with respect to all shares of
Restricted Stock and be entitled to vote such shares, to receive all cash
dividends made in respect of such shares and to exercise all other rights
in respect of such Restricted Stock except that during the Restricted
Period:
|
|
(i)
|
for
any certificates for which the Committee requires that the Company retain
custody, a Participant will not be entitled to delivery of the stock
certificate or other evidence of such Restricted Stock before the end of
such Restricted Period and unless all other vesting requirements shall
have been satisfied;
|
|
(ii)
|
other
than cash dividends, the Company will not issue any such distributions
(“Retained Distributions”) made or declared with respect to such
Restricted Stock until such time as the shares of Restricted Stock in
respect of which such Retained Distributions shall have been made or
declared shall have become vested (and such Retained Distributions shall
be subject to the same restrictions and other terms and conditions as are
applicable to the shares of Restricted Stock underlying such Restricted
Distributions);
|
|
(iii)
|
a
Participant who receives an Award of Restricted Stock shall not sell,
assign, exchange, transfer, pledge, charge, hypothecate or otherwise
dispose of or encumber any of the shares of Restricted Stock before the
end of the Restricted Period and unless all other vesting requirements
have been satisfied; and
|
|
(iv)
|
any
breach of any restrictions or other terms or conditions of such
Award of any Restricted Stock or any Retained Distributions in
respect thereof will result in such Restricted Stock or Retained
Distributions being forfeited by means of repurchase in accordance with
the corresponding restricted stock
agreement.
|
E.
|
A
Participant who receives an Award of Restricted Stock Units shall not be a
shareholder on receipt of such Award and such a Participant shall not be
considered an owner of any Common Shares by virtue of such
Award. During the Restricted Period and until all vesting
requirements have been satisfied, a Participant who receives Restricted
Stock Units shall not sell, assign, exchange, transfer, pledge, charge
hypothecate or otherwise dispose of or encumber any Restricted Stock
Units; and any breach of any restrictions or other terms or conditions of
such Award of any Restricted Stock Units will result in such Restricted
Stock Units being forfeited.
|
F.
|
Each
Restricted Stock Unit shall be exercised on such date as specified in the
restricted stock agreement and the total number of shares subject thereto
or cash consideration to be received in respect thereof shall be
receivable in a fixed scheme of installments, which need not be equal, as
specified in the restricted stock unit agreement. In addition, except as
otherwise specified in the restricted stock agreement, the first
installment shall not be exercised during the period commencing on the
date of the granting of such Restricted Stock Unit and ending on the day
preceding the first anniversary of such grant
date.
|
16.
|
Termination
of Employment or Service
|
|
(a)
|
If
Termination occurs by reason of (i) disability, (ii) death or (iii)
retirement at or after age 65, each Option theretofore granted to him
which shall not have theretofore expired or otherwise been cancelled shall
become fully vested and shall, to the extent not theretofore exercised,
terminate
|
upon
the earlier to occur of the expiration of one (1) year after the date of
such Termination and the date of termination specified in such
Options;
|
||
|
(b)
|
If
Termination occurs by reason of (i) termination by the Company or a
Subsidiary other than for Cause or (ii) the Participant's voluntary
termination, each Option theretofore granted to him that is fully vested
which shall not have theretofore expired or otherwise have been cancelled
shall, to the extent not theretofore exercised, terminate upon the earlier
to occur of the expiration of ninety (90) days after the date of
Termination and the date of termination specified in such Award;
and
|
|
(c)
|
If
Termination occurs by reason of termination by the Company for Cause, each
Option theretofore granted to him which shall not have theretofore expired
or otherwise been cancelled shall immediately
terminate.
|
|
Notwithstanding
the foregoing, the Board may amend the period following Termination during
which an Option may be exercised.
|
|
In
the event of a Termination of a Participant who has received an Award of
Restricted Stock or Restricted Stock Units, the vesting and exercise of
such Awards, as applicable, shall be governed by the corresponding
agreement in respect of such
Awards.
|
|
"Cause"
shall mean (i) the commission by a Participant of any act or omission that
would constitute a felony under United States federal, state or equivalent
foreign law, or an indictable offense under Bermuda law, (ii) a
Participant's gross negligence, recklessness, dishonesty, fraud,
disclosure of trade secrets or confidential information, willful
malfeasance or willful misconduct in the performance of services to the
Company or its Subsidiaries, (iii) willful misrepresentation to
shareholders or directors which is injurious to the Company; (iv) a
willful failure without reasonable justification to comply with reasonable
directions of a Participant's supervisor; or (v) a willful and material
breach of a Participant's duties or obligations under any agreement with
the Company or a Subsidiary.
|
17.
|
Adjustment
of Number of Shares
|
A.
|
In
the event that a dividend shall be declared upon the Class A Common Shares
payable in Class A Common Shares, the number of Class A Common Shares then
subject to any Award, the number of Class A Common Shares reserved for
issuance in accordance with the provisions of the Plan but not yet covered
by an Award and the number of Class A Common Shares referred to in Section
24.B. hereof shall be adjusted by adding to each share the number of
shares which would be distributable thereon if such shares had been issued
on the date fixed for determining the shareholders entitled to receive
such stock dividend.
|
B.
|
In
the event that the issued Class A Common Shares shall be changed into or
exchanged for a different number or kind of shares of stock or other
securities of the Company or of another corporation, whether through
reorganization, stock split-up, combination of shares, sale of assets,
amalgamation, merger or consolidation in which the Company is the
surviving corporation, then there shall be substituted for each Class A
Common Share then subject to any Award, for each Class A Common Share
reserved for issuance in accordance with the provisions of the Plan but
not yet covered by an Award and for each Class A Common Share referred to
in Section 24.B. hereof, the number and kind of shares of stock or other
securities into which each issued Common Share shall be so changed or for
which each such share shall be
exchanged.
|
C.
|
In
the event that there shall be any change, other than as specified in this
Section 17, in the number or kind of issued Class A Common Shares, or of
any stock or other securities into which the Class A Common Shares shall
have been changed, or for which it shall have been exchanged, then, if the
Committee shall, in its sole discretion, determine that such change
equitably requires an adjustment in the number or kind of shares then
subject to any Award, the number or kind of shares reserved for issuance
in accordance with the provisions of the Plan but not yet covered by an
Award and the number or kind of shares referred to in Section 24.B.
hereof, such adjustment shall be made by the Committee and shall be
effective and binding
|
for all purposes of the Plan and of each corresponding agreement or certificate entered into in accordance with the provisions of the Plan. | |
D.
|
In
the case of any substitution or adjustment in accordance with the
provisions of this Section 17, the price (if any) in each agreement or
certificate for each share covered thereby prior to such substitution or
adjustment shall be the price for all shares of stock or other securities
which have been substituted for such share or to which such share shall
have been adjusted in accordance with the provisions of this Section
17.
|
E.
|
No
adjustment or substitution provided for in this Section 17 shall require
the Company to sell or issue a fractional share under any agreement or
certificate.
|
F.
|
In
the event of the dissolution or liquidation of the Company, or a merger,
reorganization or consolidation in which the Company is not the surviving
corporation, then each Award, to the extent not theretofore exercised,
shall be immediately exercisable in full; provided, that such dissolution
liquidation, amalgamation, merger, reorganization or consolidation
constitutes a “change in control” within the meaning of Section 409A of
the Code.
|
G.
|
This
Section 17 shall apply, pari passu, with respect to Class B Common
Shares.
|
18.
|
Purchase
for Investment, Withholding and
Waivers
|
19.
|
No
Shareholder Status
|
20.
|
No
Restrictions on Corporate Acts
|
21.
|
No
Employment Right or Right to Continued
Service
|
22.
|
Termination
and Amendment of the Plan
|
23.
|
Expiration
and Termination of the Plan
|
24.
|
Options
for Non-employee Directors
|
A.
|
In
addition to any Award granted pursuant to Section 4, a non-employee
director shall be eligible to receive an annual Award. Except as otherwise
provided in this Section 24, any Award granted to a non-employee director
shall be subject to all of the terms and conditions of the
Plan.
|
B.
|
(1)
|
Effective
at the 2007 annual meeting of the Company and each annual meeting
thereafter, each non-employee director who shall have served as a
non-employee director since the immediately preceding annual meeting and
any other non-employee director as determined by a vote of a majority of
the members of the Board (excluding any such other non-employee director)
shall be granted (i) an annual Award of a non-incentive stock option to
purchase 10,000
Common Shares, which shall be Class B Common Shares in the case of a
non-employee director who is eligible to be a holder of Class B Common
Shares pursuant to the Company's Bye-laws, or otherwise shall be Class A
Common Shares, or (ii) an annual Award of non-incentive stock options,
Restricted Stock or Restricted Stock Units (or any combination thereof);
provided, that the value of such options, shares of Restricted Stock or
Restricted Stock Units (or combination thereof) in the aggregate shall be
equal to value to 10,000 non-incentive
stock options referred to in subclause (i) on the date of
grant. The Compensation Committee shall have discretion to
determine the components of the Awards within the limitations of the
preceding sentence. For purposes of determining the value of 10,000 non-incentive
stock options, the Compensation Committee shall calculate a U.S. dollar
amount using the methodology that is employed by the Company for valuing
Options in its most recent annual financial statements, including all
assumptions contained therein. For purposes of determining the
number of shares of Restricted Stock or Restricted Stock Units
constituting all or a portion of an Award, the U.S. dollar amount
allocated to such Award shall be divided by the fair market value of a
share of the Company’s Class A Common Stock on the date of
grant.
|
|
(2)
|
The
initial per share option price of each Option granted to a non-employee
director pursuant to this Section 24.B. shall be equal to the fair market
value of a Class A Common Share on the date the Option is granted, or 105%
of the fair market value of a Class B Common Share on the date the Option
is granted. Notwithstanding the preceding sentence, the Committee may
provide that the Option price per share will increase to reflect the cost
of capital or any other objective measure
or
|
may set the initial exercise price at an amount in excess of the fair market value at the time of grant. | ||
|
(3)
|
The
term of each Option granted to a non-employee director pursuant to this
Section 24.B. shall be five years from the date of the granting thereof.
The Board shall determine by a majority vote the number of installments in
which an Option granted pursuant to this Section 24 shall be exercisable;
provided, that the first installment shall not become exercisable during
the period commencing on the date of the granting of such Option and
ending on the day immediately preceding the first anniversary of such
date. An installment once exercisable shall remain exercisable until such
Option expires or is
terminated.
|
|
(4)
|
Subject
to the provisions (including any applicable solvency test) of the
Companies Act 1981, all or any portion of the payment required upon the
exercise of an Option granted to a non-employee director may be made in
kind by the delivery of Class A Common Shares or Class B Common Shares, as
the case may be, having a fair market value on the date the Option is
exercised equal to the portion of the option price so
paid.
|
C.
|
The
provisions of this Section 24 may not be amended except by the vote of a
majority of the members of the Board and by the vote of a majority of the
members of the Board who are non-employee
directors.
|
25.
|
Miscellaneous
|
A.
|
Nothing
contained in the Plan shall prevent the Company or any Subsidiary from
adopting other or additional compensation arrangements for its
employees.
|
B.
|
Unless
otherwise determined by the Committee, any withholding obligations may be
settled with Common Shares, including Common Shares that are part of the
award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such
payment or arrangements, and the Company and its Subsidiaries shall, to
the extent permitted by law, have the right to deduct any such taxes from
any payment otherwise due to the Participant. The Committee may
establish such procedures as it deems appropriate for the settlement of
withholding obligations with Common
Shares.
|
C.
|
The
Committee shall establish such procedures as it deems appropriate for a
Participant to designate a beneficiary to whom any amounts payable in the
event of the Participant’s death are to be
paid.
|
D.
|
Any
amounts owed to the Company or a Subsidiary by the Participant of whatever
nature may be offset by the Company from the value of any Common Shares,
cash or other thing of value under this Plan or an agreement or
certificate to be transferred to the Participant, and no Common Shares,
cash or other thing of value under this Plan or an agreement or
certificate shall be transferred unless and until all disputes between the
Company and the Participant have been fully and finally resolved and the
Participant has waived all claims against the Company or a Subsidiary in
respect thereof.
|
E.
|
To
the extent that the Committee determines that the restrictions imposed by
the Plan preclude the achievement of the material purposes of the awards
in jurisdictions outside the United States of America, the Committee may
in its discretion modify those restrictions as it determines to be
necessary or appropriate to conform to applicable requirements or
practices of such jurisdictions.
|
F.
|
The
headings contained in the Plan are for reference purposes only and shall
not affect the meaning or interpretation of this
Plan.
|
G.
|
If
any provision of this Plan shall for any reason be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any
other provision hereby, and this Plan shall be construed as if such
invalid or unenforceable provision were
omitted.
|
H.
|
This
Plan shall inure to the benefit of and be binding on each successor and
assign of the Company. All obligations imposed on a
Participant, and all rights granted to the Company hereunder, shall be
binding on the Participant’s heirs, legal representatives, successors and
assigns.
|
I.
|
This
Plan and each agreement or certificate granting an Award constitute the
entire agreement with respect to the subject matter hereof and thereof;
provided, that in
the event of any inconsistency between this Plan and such agreement or
certificate, the terms and conditions of the Plan
shallprevail.
|
J.
|
None
of the Company, any Subsidiary or the Committee shall have any duty or
obligation to disclose affirmatively in any manner to a registered or
beneficial holder of Common Shares or an Option or other Award, and such
holder shall have no right to be advised of, any material non-public
information regarding the Company or any Subsidiary at any time prior to,
upon or in connection with, the receipt or exercise of an Option or other
Award.
|
26.
|
Governing
Law
|
■
21233300000000000000 9
|
051509
|
||||||||
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSALS 2 THROUGH 4.
PLEASE
SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
|
|||||||||
1.
|
ELECTION
OF DIRECTORS: The election of twelve directors nominated by the Board of
Directors to serve until the next Annual General Meeting of
Shareholders:
|
2.
|
The
issuance and sale of shares of Class A Common Stock and Class B Common
Stock
to TW Media Holdings LLC
|
FOR
£
|
AGAINST
£
|
ABSTAIN
£
|
|||
£
FOR
ALL NOMINEES
|
NOMINEES:
m RONALD
S. LAUDER
m HERBERT A.
GRANATH
m
FRANK EHMER
m
CHARLES R. FRANK, JR.
m HERBERT
KLOIBER
m IGOR
KOLOMOISKY
m
ALFRED W. LANGER
m
BRUCE MAGGIN
m ANN
MATHER
m DUCO
SICKINGHE
m
CHRISTIAN STAHL
m
ERIC
ZINTERHOFER
|
3.
|
The
amendment and restatement of our Amended and Restated 1995 Stock Incentive
Plan.
|
£
|
£
|
£
|
|||
£
WITHHOLD
AUTHORITY
FOR
ALL NOMINEES
|
4.
|
The
appointment of Deloitte LLP as the independent registered public
accounting firm
of the Company in respect of the fiscal year ending December 31, 2009 and
the authorization
of the Board of Directors, acting through the Audit Committee, to
approve
their fee.
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£
|
£
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£
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£ FOR
ALL EXCEPT
(See
instructions below)
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Shares
cannot be voted unless this proxy card is signed and returned or shares
are voted in person at the Annual General
Meeting.
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The
undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders to be held on
May 15, 2009, and the Proxy Statement, dated April 20, 2009, prior to the
signing of this proxy
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INSTRUCTIONS:
To withhold authority to vote for any individual nominee(s), mark
“FOR
ALL EXCEPT”
and
fill in the circle next to each nominee you wish to withhold, as shown
here: ●
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To
change the address on your account, please check the box at right and
indicate
your new address £
in
the address space above. Please note that changes
to the registered name(s) on the account may
not
be submitted via this
method.
|
Signature
of Shareholder
|
Date:
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Signature
of Shareholder
|
|
Date:
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Note:
|
Please
sign exactly as your name or names appear on this Proxy. When shares are
held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as
such. If the signer is a corporation, please sign full corporate name by
duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized
person.
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■
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CENTRAL
EUROPEAN MEDIA ENTERPRISES LTD.
PROXY
FOR ANNUAL GENERAL MEETING OF SHAREHOLDERS MAY 15, 2009
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned hereby constitutes and appoints Adrian Sarbu, Michael Ashford
and Scott Davis, or any of them acting singly, with the power of
substitution in any of them, the proxies of the undersigned to vote with
the same force and effect as the undersigned all shares of Common Stock of
Central European Media Enterprises Ltd. (the "Company") held of record by
the undersigned on April 20, 2009 at the Annual General Meeting of
Shareholders to be held at The Pearman Room (4B), 4th Floor, Conyers Dill
& Pearman, Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda,
on May 15, 2009, at 11:00 A.M. and at any adjournment or adjournments
thereof, hereby revoking any proxy or proxies heretofore given and
ratifying and confirming all that said proxies may do or cause to be done
by virtue thereof with respect to the following matters:
This
proxy, when properly executed, will be voted as directed. If no direction
is indicated, the proxy will be voted (i) FOR the election of the twelve
named individuals as directors, (ii) FOR the approval of the issuance and
sale of shares of Class A Common Stock and Class B Common Stock to TW
Media Holdings LLC, (iii) FOR the approval of the amendment and
restatement of our Amended and Restated 1995 Stock Incentive Plan, and
(iv) FOR the appointment of Deloitte LLP as the independent registered
public accounting firm of the Company in respect of the fiscal year ending
December 31, 2009 and the authorization of the Board of Directors, acting
through the Audit Committee, to approve their fee.
CONTINUED
AND TO BE SIGNED ON REVERSE SIDE
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14475
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