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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 3)

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

CTC Media, Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o

 

No fee required.

ý

 

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:
        Common Stock, par value $0.01 per share
 
    (2)   Aggregate number of securities to which transaction applies:
        116,554,958
 
    (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):
        $2.18781
 
    (4)   Proposed maximum aggregate value of transaction:
        $255,000,000.002
 
    (5)   Total fee paid:
        $51,000.003
 

ý

 

Fee paid previously with preliminary materials.

o

 

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
Calculated by dividing the proposed maximum aggregate value of the transaction by the aggregate number of shares of common stock (excluding shares underlying equity awards) indicated in Row 2.

2
Represents the total cash expected to be available for distribution to stockholders (other than as described herein) in the merger, including the net proceeds of the sale described in the accompanying proxy statement.

3
Previously paid.

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LOGO

November 17, 2015

Dear CTC Media Stockholder:

        We cordially invite you to attend our special meeting of the stockholders of CTC Media Inc., a Delaware corporation, which we refer to as the Company, we or us, to be held on December 17, 2015, beginning at 4:00 p.m., local time, at the offices of Morgan, Lewis & Bockius UK LLP, Condor House, 5-10 St. Paul's Churchyard, London EC4M 8AL, United Kingdom.

        On September 24, 2015, we entered into a Framework Agreement (which agreement, as it may be further amended from time to time, is referred to herein as the sale agreement), providing for the sale of 75% of the outstanding participation interests of CTC Investments LLC, which we refer to as CTC Investments, our wholly owned subsidiary, to UTV-Management LLC, which we refer to as UTV-Management, and the approval by us of the issuance of an additional, new participation interest in CTC Investments to UTV-Management or its affiliate following the closing of the sale, which would result in UTV-Management (together with its affiliate) holding 80% of CTC Investments to ensure compliance with the requirements of the Mass Media Law adopted by the Russian government, which we refer to as the sale.

        In addition, on November 16, 2015, we entered into an Agreement and Plan of Merger (which agreement, as it may be further amended from time to time, is referred to as the merger agreement), providing for the merger of CTCM Merger Sub, Inc., our wholly owned subsidiary, with and into the Company, with the Company surviving, which we refer to as the merger, to be consummated at a time to be determined by our board of directors following the sale, and each holder of our common stock as of the effective time of the merger (other than Telcrest Investments Limited, which we refer to as Telcrest, who holds shares of our common stock that have, as of the date of this letter and the accompanying notice of special meeting of stockholders and proxy statement, been identified as blocked property by Computershare Trust Company, our transfer agent, pursuant to applicable sanctions associated with the Specially Designated Nationals and Blocked Persons List of the U.S. Department of the Treasury, Office of Foreign Assets Control), becoming entitled to receive cash consideration per share based on the aggregate amount of our available cash as of the time of the merger (which amount, as will be ultimately determined by us, is referred to as the merger consideration). The sale and the merger are referred to as the proposed transactions.

        At the special meeting, you will be asked to approve the sale, adopt the merger agreement, approve on an advisory (non-binding) basis the compensation that may be paid or become payable to our named executive officers that is based on or otherwise related to the proposed transactions, and approve a proposal to adjourn the special meeting if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement.

        Our board of directors, acting upon the unanimous recommendation of the special committee thereof, which is comprised entirely of independent members of our board of directors, has determined, with the approval of each member except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, that the sale and the sale agreement is expedient and for the best interests of, and fair to, our Company and our stockholders who are not affiliates of our Company, which we refer to as our "unaffiliated stockholders," and that the merger agreement is advisable and in the best interests of, and fair to, our Company and our unaffiliated stockholders, and has also approved and declared advisable the sale agreement, the merger agreement and the transactions contemplated by each of the sale agreement and the merger agreement. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance


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policy, made its determination after consultation with our independent legal advisors and the financial advisors to the special committee and consideration of a number of factors, including the unanimous recommendation of the special committee. We believe that each of our directors and executive officers, except for those members of our board of directors originally designated by Telcrest, who have not stated their intentions, intend to vote all of their shares of common stock "FOR" approval of the sale, "FOR" adoption of the merger agreement, "FOR" approval, on an advisory (non-binding) basis, of the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the proposed transactions and "FOR" approval of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, recommends that you vote "FOR" approval of the sale, "FOR" adoption of the merger agreement, "FOR" the advisory (non-binding) proposal to approve the compensation that may be paid or become payable to our named executive officers that is based on or otherwise related to the proposed transactions, and "FOR" approval of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement.

        Your vote is very important. Approval of the sale requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon (which outstanding shares include those held by Telcrest), and the adoption of the merger agreement requires either (i) the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon (which outstanding shares include those held by Telcrest) or (ii) if our board of directors determines at or prior to our special meeting of the stockholders that the shares of common stock held by Telcrest have remained beneficially owned by Telcrest and that such shares are not blocked property pursuant to applicable sanctions, then the approval of (a) Telcrest and (b) the holders of a majority of the outstanding shares of our common stock that are not beneficially owned by Telcrest. The adoption of the management retention compensation proposal requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock, present in person or represented by proxy and voting on the matter at the special meeting. Approval of the proposal to adjourn the special meeting, if necessary, for the purpose of soliciting additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement, requires the affirmative vote of the holders of a majority of the shares of our common stock, present in person or represented by proxy and voting on the matter at the special meeting. Whether or not you plan to attend the special meeting, please complete, date, sign and return, as promptly as possible, the enclosed proxy card in the accompanying pre-paid reply envelope, or submit your proxy by telephone or the Internet. If you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. The failure to vote will have the same effect as a vote against approval of the sale and as a vote against adoption of the merger agreement.

        If your shares of our common stock are held in "street name" by your bank, broker, trustee or other nominee, your bank, broker, trustee or other nominee will be unable to vote your shares of our common stock without instructions from you. You should instruct your bank, broker, trustee or other nominee to vote your shares of our common stock, following the procedures provided by your bank, broker, trustee or other nominee. The failure to instruct your bank, broker, trustee or other nominee to vote your shares of our common stock "FOR" approval of the sale will have the same effect as voting against the approval of the sale. The failure to instruct your bank, broker, trustee or other nominee to vote your shares of our common stock "FOR" adoption of the merger agreement will have the same effect as voting against the adoption of the merger agreement.

        The accompanying proxy statement provides you with detailed information about the special meeting, the sale agreement, the merger agreement and the transactions contemplated by each of the sale agreement and the merger agreement. A copy of the sale agreement is attached as Annex A to the proxy statement and a copy of the merger agreement is attached as Annex B to the proxy statement. We encourage you to read the entire proxy statement and its annexes, including the sale agreement and


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the merger agreement, carefully. You may also obtain additional information about us from documents we have filed with the Securities and Exchange Commission.

        Unless context otherwise requires, references to you herein and in the accompanying notice of special meeting of stockholders and proxy statement refer to the holders of the shares of our common stock to whom we mail this letter and the accompanying notice of special meeting of stockholders and proxy statement.

        If you have any questions or need assistance submitting your proxy, please contact our proxy solicitor, Georgeson Inc., by telephone toll-free at +1 (866) 821-2614 (banks, brokers, trustees or other nominees may call collect at +1 (781) 575-2137) or by email at CTCMEDIA@georgeson.com.

        Thank you in advance for your cooperation and continued support.

        Very truly yours,

        Yuliana Slashcheva

        Chief Executive Officer

        The proxy statement is dated November 17, 2015, and is first being mailed to our stockholders on or about November 17, 2015.

        NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE TRANSACTIONS CONTEMPLATED BY THE SALE AGREEMENT OR THE MERGER AGREEMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE SALE AGREEMENT OR THE MERGER AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


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CTC MEDIA, INC.
31A Leningradsky Prospekt
Moscow, 125284 Russia

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On December 17, 2015

Dear CTC Media Stockholder:

        A Special Meeting of Stockholders of CTC Media, Inc., a Delaware corporation, which we refer to as the Company, we or us, will be held on December 17, 2015 at 4:00 p.m., local time, at the offices of Morgan, Lewis & Bockius UK LLP, Condor House, 5-10 St. Paul's Churchyard, London EC4M 8AL, United Kingdom. The special meeting will be held for the following purposes:

    1.
    To consider and vote on a proposal to approve the sale to UTV-Management LLC, which we refer to as UTV-Management, of 75% of the outstanding participation interests in CTC Investments LLC, our wholly owned subsidiary, which we refer to as CTC Investments, and the approval by us of the issuance of an additional, new participation interest in CTC Investments to UTV-Management or its affiliate following the closing of the sale, which would result in UTV-Management (together with its affiliate) holding 80% of CTC Investments to ensure compliance with the requirements of the Mass Media Law, which we refer to as the sale, as set forth in Framework Agreement, dated as of September 24, 2015, as it may be further amended from time to time, which we refer to as the sale agreement, by and between us and UTV-Management. A copy of the sale agreement is attached as Annex A to the accompanying proxy statement.

    2.
    To consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of November 16, 2015, as it may be further amended from time to time, which we refer to as the merger agreement, by and between our Company and CTCM Merger Sub, Inc., our wholly owned subsidiary, which we refer to as Merger Sub, whereby Merger Sub will merge with and into the Company, with the Company surviving and each holder of our common stock as of the effective time of the merger (other than Telcrest Investments Limited, which we refer to as Telcrest, who holds shares of our common stock that, as of the date of this notice of special meeting of stockholders, have been identified as blocked property by Computershare Trust Company, our transfer agent, pursuant to applicable sanctions associated with the Specially Designated Nationals and Blocked Persons List of the U.S. Department of Treasury, Office of Foreign Assets Control, which we refer to as the Telcrest Shares), becoming entitled to receive cash consideration per share based on the aggregate amount of our available cash as of the time of the merger (which amount, as ultimately determined by us, is referred to herein as the merger consideration). A copy of the merger agreement is attached as Annex B to the accompanying proxy statement.

    3.
    To consider and vote on an advisory (non-binding) proposal to approve the compensation that may be paid or become payable to our named executive officers that is based on or otherwise related to the proposed transactions.

    4.
    To consider and vote on a proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement.

        Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, has fixed the close of business on November 16, 2015 as the record date for the determination of stockholders

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entitled to notice of, and to vote at, the Special Meeting and any adjournment or postponement thereof.

        Your vote is very important, regardless of the number of shares of our common stock you own.    The sale contemplated by the sale agreement cannot be completed unless it is approved by the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon (which outstanding shares include those held by Telcrest). The merger contemplated by the merger agreement cannot be completed unless the sale is approved as described above and the merger agreement is adopted by either (i) the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon (which outstanding shares include those held by Telcrest) or (ii) if our board determines at or prior to our special meeting of the stockholders that the shares of common stock held by Telcrest have remained beneficially owned by Telcrest and that such shares are not blocked property pursuant to applicable sanctions, then the approval of (a) Telcrest and (b) at least a majority of the holders of the outstanding shares of our common stock that are not beneficially owned by Telcrest. Even if you plan to attend the special meeting in person, we request that you complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying pre-paid reply envelope or submit your proxy by telephone or the Internet prior to the special meeting to ensure that your shares of our common stock will be represented at the special meeting if you are unable to attend. If you fail to return your proxy card, fail to submit your proxy by telephone or the Internet and do not attend the special meeting in person, your shares of our common stock will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote "AGAINST" the proposal to approve the sale and as a vote "AGAINST" the proposal to adopt the merger agreement.

        If you are a stockholder of record, voting by ballot at the special meeting will revoke any proxy previously submitted. If you hold your shares of our common stock in "street name," meaning they are held for your account by a broker or other nominee, you will receive instructions from the holder of record that you must follow for your shares of our common stock to be voted. You must instruct your broker how to vote with respect to the sale, merger agreement and advisory vote on compensation of named executive officers; your broker cannot exercise its discretion to vote on your behalf.

        Our board of directors, acting upon the unanimous recommendation of the special committee thereof, which is comprised entirely of independent members of our board of directors, has determined, with the approval of each member except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, that the sale and the sale agreement are expedient and for the best interests of, and fair to, our Company and our stockholders who are not affiliates of our Company, whom we refer to collectively as our "unaffiliated stockholders," that the merger agreement is advisable and in the best interests of, and fair to, our Company and our unaffiliated stockholders, and approved the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the proposed transactions, and also approved and declared advisable the sale agreement, the merger agreement, and the transactions contemplated by each of the sale agreement and the merger agreement.

        Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, made its determination after consultation with our independent legal advisors and the financial advisors to its special committee and consideration of a number of factors, including the unanimous recommendation of the special committee. We believe that each of our directors and executive officers, except for those members of our board of directors originally designated by Telcrest, who have not stated their intentions, intend to vote all of their shares of common stock "FOR" approval of the sale, "FOR" adoption of the merger agreement, "FOR" approval, on an advisory (non-binding) basis, of the compensation that may be paid or become payable to our named executive officers that is based on or

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otherwise relates to the proposed transactions and "FOR" approval of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy,recommends that you vote "FOR" approval of the sale, "FOR" adoption of the merger agreement, "FOR" approval, on an advisory (non-binding) basis, of the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the proposed transactions, and "FOR" approval of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement.

        You are entitled to attend the special meeting only if you were a holder of our common stock as of the close of business on November 16, 2015, which we refer to as the record date, or hold a valid proxy for the special meeting. Unless the context otherwise requires, references to you herein and in the accompanying proxy statement refer to the holders of the shares of our common stock to whom we mail this letter and the accompanying notice of special meeting of stockholders and proxy statement. Given that seating is limited, admission to the special meeting will be on a first-come, first-served basis. You should be prepared to present photo identification for admittance. If you are not a stockholder of record but hold shares of our common stock in "street name," meaning they are held for your account by a broker or other nominee, you should provide proof of beneficial ownership as of the record date, such as your most recent account statement prior to the record date, a copy of the voting instruction card provided by your broker or other nominee, or similar evidence of ownership.

        Our stockholders who do not vote in favor of or submit a proxy in favor of the proposal to adopt the merger agreement and are entitled to appraisal rights under applicable law will have the right to seek appraisal of the fair value of their shares of our common stock if they deliver a demand for appraisal before the vote is taken on the merger agreement and comply with all the requirements of Delaware law, which are summarized in the accompanying proxy statement and reproduced in their entirety in Annex C to the accompanying proxy statement, and the merger is consummated.

                        By Order of the Board of Directors,
                        Maxim Bobin
                        Company Secretary

November 17, 2015

        WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY CARD IN THE ACCOMPANYING PRE-PAID REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. IF YOU ARE A STOCKHOLDER OF RECORD AND ATTEND THE SPECIAL MEETING AND VOTE IN PERSON, YOUR VOTE BY BALLOT WILL REVOKE ANY PROXY PREVIOUSLY SUBMITTED.

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TABLE OF CONTENTS

SUMMARY TERM SHEET

    1  

SPECIAL NOTE REGARDING TELCREST

    16  

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING, THE SALE AND THE MERGER

    17  

SPECIAL FACTORS RELATED TO THE TRANSACTIONS

    27  

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

    62  

RISKS RELATING TO THE PROPOSED TRANSACTIONS

    64  

PARTIES TO THE SALE

    68  

PARTIES TO THE MERGER

    69  

FEE ARRANGEMENTS

    70  

THE SPECIAL MEETING

    71  

PROPOSAL 1—THE SALE

    77  

PROPOSAL 2—THE MERGER

    92  

PROPOSAL 3—ADVISORY VOTE ON MANAGEMENT RETENTION COMPENSATION

    100  

PROPOSAL 4—ADJOURNMENT OF THE SPECIAL MEETING

    102  

RATIO OF EARNINGS TO FIXED CHARGES

    103  

UNAUDITED PRO FORMA FINANCIAL INFORMATION

    104  

MATERIAL DIFFERENCES IN RIGHTS OF STOCKHOLDERS

    112  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

    112  

MARKET PRICES OF THE COMPANY'S COMMON STOCK AND DIVIDEND INFORMATION

    114  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    115  

DELISTING AND DEREGISTRATION OF THE COMPANY'S COMMON STOCK

    117  

OTHER MATTERS

    117  

STOCKHOLDER PROPOSALS

    117  

HOUSEHOLDING OF PROXY MATERIAL

    117  

WHERE YOU CAN FIND MORE INFORMATION

    118  


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SUMMARY TERM SHEET

        The following summary highlights selected information in this proxy statement and may not contain all the information that may be important to you. Accordingly, we encourage you to carefully read this entire proxy statement, its annexes and the documents referred to in, or incorporated by reference into, this proxy statement. Each item in this summary includes a page reference directing you to a more complete description of that topic. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under "Where You Can Find More Information," beginning on page 118 of this proxy statement.

Background to the Transactions

        We are pursuing the sale and the subsequent merger in response to the adoption by the Russian government of the Mass Media Law, which will impose new limitations on non-Russian ownership of Russian television broadcasters effective January 1, 2016. See "Special Factors Related to the Transactions—Background to the Transactions—Overview" beginning on page 27 of this proxy statement.

Special Note Regarding Telcrest

        Telcrest Investments Limited, a Cyprus company, which we refer to as Telcrest, currently holds approximately 25% of our outstanding common stock. On March 14, 2014, the Office of Foreign Assets Control, which we refer to as OFAC, of the U.S. Department of Treasury designated Bank Rossiya, which directly or indirectly owned more than 50% of Telcrest at such time, as a Specially Designated National and Blocked Person, which we refer to as an SDN, for purposes of U.S. economic sanctions related to the situation in Ukraine. Accordingly, Telcrest was also considered to be an SDN for purposes of U.S. sanctions at such time and, thereafter, the shares of our common stock held by Telcrest were identified by Computershare Trust Company, our transfer agent, which we refer to as Computershare, as blocked property pursuant to applicable sanctions associated with the SDN list of OFAC. Telcrest has since informed us that they are no longer owned, directly or indirectly, 50 percent or more in the aggregate by one or more SDNs, including Bank Rossiya, but we believe we still may not deal in the shares of our company held by Telcrest, and have therefore applied to OFAC for a license permitting us to effect the merger. In that application, we specified that in the merger these shares will not be cancelled in consideration of the cash merger consideration, but instead will remain outstanding.

        The shares of our common stock held by Telcrest are outstanding for purposes of calculating the number of shares outstanding in connection with the votes required in connection with the sale and the merger, although we believe they may not be voted for so long as they continue to be treated as "blocked property" pursuant to applicable sanctions.

Transaction Summary

        Under the terms of the sale agreement, we have agreed to sell 75% of the participation interest in CTC Investments LLC, which we refer to as CTC Investments, to UTV-Management LLC. In addition, under the terms of the sale agreement we have agreed to approve the issuance by CTC Investments of an additional, new participation interest to UTV-Management or its affiliate following the closing of the sale, which would result in UTV-Management (together with its affiliate) holding 80% of CTC Investments to ensure compliance with the requirements of the Mass Media Law. This additional participation interest would be issued in consideration of a promissory note to be issued by UTV-Management or its affiliate to CTC Investments. The promissory note would have the face value of approximately RUB 10,000,000,000, which has been determined on the basis of the value of the charter capital of CTC Investments, and would have a maturity of 15 years and interest rate of 10%.

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UTV-Management may waive its right to acquire such additional interests at the closing of the sale, but we cannot assure you that it will do so.

Parties to the Sale (Page 68)

        CTC Media, Inc., which we refer to as the Company, we or us, is a Delaware corporation. The Company is the holding company of a group of Russian (and other) legal entities, including CTC Investments, that operate four commercial television networks in Russia, as well as broadcasting operations in Kazakhstan. Unless the context otherwise requires, references to the Company, we or us in this proxy statement include the Company and our subsidiaries on a consolidated basis.

        UTV-Management LLC, which we refer to as UTV-Management, is a company organized under the law of Russia that is a privately held Russian commercial television broadcasting group. It is a subsidiary of UTH Russia Limited, or UTH, a prominent Russian commercial television broadcaster, which operates in Russia the U Channel, the Disney Channel and the cable channel MUZ-TV.

        In this proxy statement, we refer to the Framework Agreement, dated as of September 24, 2015, as it may be further amended from time to time, by and between the Company and UTV-Management, as the sale agreement, and the sale by the Company to UTV-Management of 75% of the outstanding participation interests in CTC Investments, as the sale.

Parties to the Merger (Page 69)

        We are a party to the merger. Under the terms of the merger agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation.

        CTCM Merger Sub, Inc., which we refer to as Merger Sub, is a Delaware corporation that is a wholly owned subsidiary of the Company and was organized solely for the purpose of entering into the merger agreement and consummating the transactions contemplated by the merger agreement. Under the terms of the merger agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation. Upon consummation of the proposed merger, Merger Sub will cease to exist.

        In this proxy statement, we refer to the Agreement and Plan of Merger, dated as of November 16, 2015, as it may be further amended from time to time, by and between the Company and Merger Sub, as the merger agreement, and the merger of Merger Sub with and into the Company as the merger.

Fee Arrangements (Page 70)

Special Committee Fees (Page 70)

        In accordance with the resolutions of our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, the members of the special committee, which was formed on July 4, 2015, are entitled to the following fees, regardless of whether the sale or the merger are completed: each member is entitled to receive $50,000 per month for the months of July and August 2015, and $25,000 per month thereafter, up to a capped amount of $200,000. In addition, the chairman of the special committee is entitled to receive an additional $10,000 per month for July and August 2015, and an additional $5,000 per month thereafter, up to a capped aggregate amount of $240,000.

Xenon Fee Arrangements (Page 70)

        Pursuant to an engagement agreement between the Company and Xenon Capital Partners, which we refer to as Xenon, dated as of July 28, 2015, fees for services provided by Xenon to the special committee in connection with the transactions were set at $1,500,000. This agreement was amended on

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October 7, 2015 to increase the total fees to $2,000,000 in light of the increased complexity and longer timeframe of the proposed transactions and the unanticipated scope of the related workload of Xenon. Such fees are payable in four equal installments upon the following milestones: the signing of the sale agreement, the mailing of a definitive proxy statement to our stockholders, the approval of the transactions by our stockholders, and the closing of the merger. We have also agreed to reimburse Xenon for reasonable out-of-pocket costs and expenses (including fees and expenses of its counsel) reasonably incurred by it in connection with its services, and will indemnify Xenon against potential liabilities arising out of its engagement, including certain liabilities under the U.S. federal securities laws. Natasha Tsukanova, the co-chairman of our board of directors, is a founder and managing director of Xenon.

Expenses of the Proposed Transactions and Solicitation (Page 70)

        Whether or not the sale and merger are completed, we will incur certain fees and expenses. The fees and expenses incurred or to be incurred by our Company in connection with the sale and merger are estimated at this time to total approximately $7.2 million. Such expenses may reduce our available cash as of the effective time of the merger and, accordingly, the merger consideration.

The Special Meeting (Page 71)

Time, Place and Purpose (Page 71)

        The special meeting will be held on December 17, 2015, starting at 4:00 p.m., local time, at the offices of Morgan, Lewis & Bockius UK LLP, Condor House, 5-10 St. Paul's Churchyard, London EC4M 8AL, United Kingdom.

        At the special meeting, holders of our common stock, par value $0.01 per share, will be asked to approve the sale, to adopt the merger agreement, to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the proposed transactions, and to approve any adjournment of the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement.

Record Date and Quorum (Page 71)

        You are entitled to receive notice of, and to vote at, the special meeting if you owned shares of our common stock at the close of business on November 16, 2015, which our board of directors has set as the record date for the special meeting, and which we refer to as the record date. You will have one vote for each such share of our common stock that you owned on the record date. As of the record date, there were 156,103,854 shares of our common stock outstanding and entitled to vote at the special meeting. A majority of the shares of our common stock outstanding at the close of business on the record date and entitled to vote (which outstanding shares include shares of our common stock that have been identified as "blocked property" by Computershare pursuant to applicable sanctions associated with the Specially Designated Nationals and Blocked Persons List of the U.S. Department of Treasury, Office of Foreign Assets Control), present in person or represented by proxy at the special meeting, constitutes a quorum for the purposes of the special meeting. In this proxy statement, unless context otherwise requires, references to you refer to the holders of the shares of our common stock to whom we mail this proxy statement.

Vote Required (Page 72)

        Approval of the sale requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon (which outstanding shares include those held by Telcrest).

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        Adoption of the merger agreement requires either (i) the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon (which outstanding shares include those held by Telcrest) or (ii) if our board determines at or prior to our special meeting of the stockholders that the shares of common stock held by Telcrest have remained beneficially owned by Telcrest and that such shares are not blocked property pursuant to applicable sanctions, then the approval of (a) Telcrest and (b) the holders of at least a majority of the outstanding shares of our common stock that are not beneficially owned by Telcrest.

        Approval, on an advisory (non-binding) basis, of the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the proposed transactions, requires the affirmative vote of holders of a majority of the shares of our common stock present in person or represented by proxy and voting on the matter at the special meeting.

        Approval of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies requires the affirmative vote of the holders of a majority of the shares of our common stock present in person or represented by proxy and voting on the matter at the special meeting.

        The shares held by Telcrest may not be voted for so long as they are "blocked property" pursuant to applicable U.S. economic sanctions.

Proxies and Revocation (Page 74)

        Any stockholder of record entitled to vote at the special meeting may submit a proxy by telephone, over the Internet, or by returning the enclosed proxy card in the accompanying pre-paid reply envelope, or may vote in person at the special meeting. If your shares of our common stock are held in "street name" you should instruct your bank, broker, trustee or other nominee on how to vote your shares using the instructions provided by your bank, broker, trustee or other nominee. If you fail to submit a proxy or vote in person at the special meeting, or you do not provide your bank, broker, trustee or other nominee with instructions, as applicable, your shares of our common stock will not be voted, which will have the same effect as a vote "AGAINST" the proposal to approve the sale and "AGAINST" the proposal to adopt the merger agreement.

        You have the right to revoke a proxy, whether submitted via the Internet, by telephone or by mail, at any time before it is exercised, by submitting a later-dated proxy through any of the methods available to you, by giving written notice of revocation to our Corporate Secretary, which must be filed with the Corporate Secretary by the time the special meeting begins, or by voting by ballot at the special meeting. Attending the special meeting, by itself, is not enough to revoke a proxy. If you are a beneficial owner and wish to revoke your voting instructions you should follow the instructions provided by your bank, broker, trustee or other nominee.

The Sale (Page 77)

        The sale agreement provides that we will sell to UTV-Management 75% of the participation interests in CTC Investments. In addition, the sale agreement provides that we will approve the issuance by CTC Investments of an additional, new participation interest to UTV-Management or its affiliate following the closing of the sale, which would result in UTV-Management (together with its affiliate) holding 80% of CTC Investments, to ensure compliance with the requirements of the Mass Media Law.

Consideration; Purchase Price Adjustment (Page 80)

        In exchange for the sale of the 75% participation interest in CTC Investments, UTV-Management will pay an aggregate consideration of $200,540,000, referred to as the purchase price, less any shortfall in cash flow from operating and investing activities during the second half of 2015 compared with an

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agreed target for this period and subject to further potential adjustments described in the section entitled "The Sale Agreement—Consideration to be Received Pursuant to the Sale; Adjustments to the Purchase Price" beginning on page 80 of this proxy statement. In exchange for the issuance of an additional, new participation interest to UTV-Management or its affiliate following the closing of the sale, which would result in UTV-Management (together with its affiliate) holding 80% of CTC Investments to ensure compliance with the requirements of the Mass Media Law, UTV-Management or its affiliate would issue a promissory note to CTC Investments. The promissory note would have a face value of approximately RUB 10,000,000,000, which has been determined on the basis of the value of the charter capital of CTC Investments, and would have a maturity of 15 years and interest rate of 10%.

Reasons for the Transactions; Recommendation of the Special Committee and Board of Directors; Fairness of the Transactions (Page 39)

        After careful consideration of various factors described in the sections entitled "Special Factors Related to the Transactions" and "Proposal 1—The Sale—Background, Reasons and Recommendations," and upon the unanimous recommendation of the special committee, our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy: (i) determined that the sale, the sale agreement, and the other transactions contemplated by the sale agreement, are expedient and for the best interests of, and fair to, our Company and our unaffiliated stockholders, and declared it advisable to enter into the sale agreement; (ii) approved the execution and delivery of the sale agreement, our performance of the covenants and agreements contained in the sale agreement and the consummation of the transactions contemplated thereby, including the sale, upon the terms and subject to the conditions contained in the sale agreement; and (iii) recommended that the stockholders approve the sale and directed that such matter be submitted for consideration of our stockholders at the special meeting.

        Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, believes that the sale and the sale agreement are expedient and for the best interests of, and fair to, our Company and our unaffiliated stockholders and recommends that the stockholders approve the sale. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, recommends that you vote "FOR" the approval of the sale.

Analysis of Financial Advisor of the Special Committee—Xenon Capital Partners (Page 46)

        The special committee retained Xenon to advise it in connection with the proposed transactions. Xenon delivered to the special committee a letter, dated September 15, 2015, which was updated and confirmed by a further letter from Xenon, dated October 20, 2015, both to the effect that the sale reflects the best possible terms that can be obtained in the extraordinary external circumstances faced by our Company and that the proposed consideration to be received by us for the sale of 75% of the participation interests in CTC Investments and the proposed merger consideration of between $1.77 and $2.19 (revised downward from earlier estimates of the range of proposed merger consideration in light of updated estimates of our Company's available cash as of the effective time of the merger) per share of our common stock (as estimated by Xenon on the basis of the proposed terms of the merger as of the time of its letters) to the stockholders (other than Telcrest) in the merger, are within a range of reasonableness and that the proposed transaction is fair to our unaffiliated stockholders.

        The full text of Xenon's letters to the special committee, which describe the assumptions made and the matters considered by Xenon in evaluating the sale and the merger, are attached as Annex D. Xenon provided its analysis to the special committee for the information and assistance of the special

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committee in connection with, and for purposes of, the special committee's evaluation of the sale and the merger. Xenon's analysis does not constitute a recommendation to any stockholder as to any action in connection with the sale, the merger or any other matter. Xenon's letters to the special committee expressed no view or opinion as to any terms or other aspects of the sale or the merger (other than, in each case, the consideration to be received therewith, to the extent expressly specified in such letters). The summary of Xenon's letters set forth in this proxy statement is qualified in its entirety by reference to the full text of the letters. For a further discussion of Xenon's letters, see "Special Factors Related to the Transactions—Analysis of Financial Advisor of the Special Committee—Xenon Capital Partners."

Financing of the Sale (Page 77)

        The sale is not conditioned upon the receipt of financing by UTV-Management.

Interests of Certain Persons in the Sale (Page 77)

        In considering the recommendation of our board of directors that you vote to approve the sale, you should be aware that certain of our directors and executive officers have financial interests in the sale that may be different from, or in addition to, those of us and our stockholders generally. Our board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the sale agreement and the sale, and in recommending that the sale be approved by our stockholders. These interests are described under the heading "Proposal 1—The Sale—Interests of Certain Persons in the Sale."

Regulatory Approvals (Page 78)

        Completion of the sale is subject to clearance by the Russian Federal Antimonopoly Service, the Russian Government Commission on Strategic Foreign Investments and the Agency of the Republic of Kazakhstan for the Protection of Competition. In addition, we have conferred with OFAC regarding the sale, and have received informal guidance from OFAC that OFAC will not assert jurisdiction in respect of the sale.

The Sale Agreement (Page 79)

The Sale (Page 79)

        The sale agreement provides for the sale by us to UTV-Management of 75% of the participation interests in CTC Investments.

        In addition, in the sale agreement we have agreed to approve the issuance by CTC Investments of an additional, new participation interest in CTC Investments to UTV-Management or its affiliate following the closing of the sale, which would result in UTV-Management (together with its affiliate) holding 80% of CTC Investments to ensure compliance with the requirements of the Mass Media Law. These participation interests would be issued in consideration of a promissory note by UTV-Management or its affiliate to CTC Investments in the face value of approximately RUB 10,000,000,000, which has been determined on the basis of the value of the charter capital of CTC Investments, and would have a maturity of 15 years and interest rate of 10%.

When the Sale Will be Effective (Page 79)

        The closing of the sale will take place on December 21, 2015 or on such other date as may be mutually agreed by the parties, provided that the conditions to the closing of the sale, described in the section entitled "The Sale Agreement—Conditions to the Sale" beginning on page 87 of this proxy statement, have been satisfied or waived.

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Consideration to be Received Pursuant to the Sale; Adjustments to the Purchase Price (Page 80)

        In exchange for the sale of the 75% participation interest in CTC Investments, UTV-Management will pay the purchase price, less any shortfall in cash flow from operating and investing activities during the second half of 2015 compared with an agreed target for this period, and subject to further adjustments described in the section entitled "The Sale Agreement—Consideration to be Received Pursuant to the Sale; Adjustments to the Purchase Price" beginning on page 80 of this proxy statement.

Representations and Warranties (Page 81)

        We have made certain representations and warranties in the sale agreement that are subject, in some cases, to specified exceptions and qualifications contained in the sale agreement, in the confidential disclosure schedules to the sale agreement or, subject to certain exceptions, in certain documents filed with the SEC. These representations and warranties relate to, among other things:

    corporate existence, good standing and qualification to conduct business;

    authorizations necessary to complete the sale;

    due authorization, execution, delivery and validity of the sale agreement;

    absence of any conflict with organizational documents or any violation of agreements, laws or regulations as a result of the consummation of the sale; and

    various matters relating to the conduct of our business (and these representations and warranties terminate at, and do not survive, closing).

Conduct of CTC Investment's Business Pending the Sale (Page 84)

        Under the sale agreement, we have, subject to certain exceptions in the sale agreement, agreed to certain restrictions on the operation of the business of CTC Investments and our other subsidiaries until either the closing date of the sale or the termination of the sale agreement pursuant to its terms, unless UTV-Management gives its prior consent.

        In general, we have agreed to conduct our business in the ordinary course and to use commercially reasonable efforts to preserve our present relationships with governmental authorities, customers, suppliers, licensors, licensees, distributors, wholesalers, lessors and others having significant business dealings with us and our subsidiaries.

        In addition, we have agreed that, among other things and subject to certain exceptions, we may not and must cause our subsidiaries not to, without UTV-Management's prior consent, carry out certain actions as outlined in "The Sale Agreement—Conduct of CTC Investment's Business Pending the Sale" beginning on page 84 of this proxy statement.

Restrictions on Solicitation of Takeover Proposals (Page 86)

        We have agreed that prior to the effective time of the sale, we and our subsidiaries will not, and we will not authorize or permit our representatives to, directly or indirectly, initiate, solicit, knowingly encourage or facilitate any inquiry, proposal or offer or enter into any discussions or negotiations that would reasonably be expected to lead to an acquisition proposal.

        If our board of directors receives an unsolicited written acquisition proposal and determines in good faith that it constitutes a superior proposal (as such term is defined in the sale agreement), then we may enter into an agreement with respect to the superior proposal, provided that such agreement is entered into concurrently with termination of the sale agreement and that we have complied with our obligations under the sale agreement, including to notify UTV-Management of the acquisition proposal,

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terminate the sale agreement pursuant to its terms and pay the termination fee of $5,000,000 and reimburse UTV-Management's out-of-pocket expenses in connection with the sale.

        See "The Sale Agreement—Restrictions on Solicitation of Takeover Proposals" beginning on page 86 of this proxy statement and see "The Sale Agreement—Termination Fees" beginning on page 90 of this proxy statement.

Conditions to the Sale (Page 87)

        The respective obligations of our Company and UTV-Management to consummate the sale are subject to the satisfaction or waiver of certain customary conditions, including: (i) the approval of the sale by our stockholders; (ii) the absence of any applicable law prohibiting the consummation of the sale; (iii) the receipt of required regulatory approvals; (iv) compliance by the parties with their respective obligations under the sale agreement; (v) the absence of a material adverse effect on CTC Investments and its subsidiaries, including a material adverse effect arising as a result of macroeconomic, political or market conditions; and (vi) the absence of a breach of warranties (individually or in aggregate) that has resulted in or is likely to give rise to a loss in excess of $10 million to CTC Investments and its subsidiaries.

Termination (Page 89)

        We and UTV-Management may, by mutual written agreement, terminate the sale agreement and abandon the sale at any time prior to the effective time of the sale, whether before or after the adoption of the sale agreement by our stockholders.

        The sale agreement may also be terminated and the sale abandoned at any time prior to the effective time of the sale, as outlined in "The Sale Agreement—Termination" beginning on page 89 of this proxy statement.

Termination Fees (Page 90)

        If the sale agreement is terminated in certain circumstances described under "The Sale Agreement—Termination Fees" beginning on page 90 of this proxy statement, we may be obligated to pay a termination fee of $5,000,000. In the event that the stockholders do not vote in favor of the sale, we are obligated to pay a "no vote" fee of $2,600,000. In each such case, in addition, we would also be obligated to pay UTV-Management's out-of-pocket expenses.

Remedies (Page 90)

        We and UTV-Management are entitled to injunctions to prevent breaches of the sale agreement and to specifically enforce the terms and provisions of the sale agreement, in addition to any other remedy to which the parties are entitled at law or in equity.

        Where the termination fee and UTV-Management's expenses are payable under the sale agreement, UTV-Management's receipt of a termination fee and UTV-Management's expenses will be the sole and exclusive remedy of UTV-Management against our Company and any of our former, current and future affiliates, and each of their respective directors, officers, employees, stockholders, controlling persons or representatives for any loss or damage in connection with the sale agreement, the negotiation, execution or performance thereof, or the sale. In no event we shall be required to pay the termination fee on more than one occasion. In the event that a no vote fee has already been paid, we shall be entitled to credit the amount of the no vote fee actually paid against the amount of the termination fee we are required to pay under the sale agreement, if any.

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The Merger (Page 92)

        Upon the consummation of the merger, which will not occur until a date following the consummation of the sale determined by us and Merger Sub, Merger Sub will merge with and into the Company, with the Company surviving, and each holder of our outstanding common stock as of the effective time of the merger, other than Telcrest and any stockholders who have property exercised appraisal rights, will be entitled to receive cash consideration per share based on the aggregate amount of our available cash as of the time of the merger (which amount, as ultimately determined by the Company, is referred to herein as the merger consideration). The shares of common stock held by Telcrest will remain outstanding following the merger, and Telcrest will be our sole stockholder. Following the merger, we will cease to be a publicly traded company. If the merger is completed, you will not own any shares of the capital stock of the surviving corporation. Assuming timely satisfaction of necessary closing conditions, including receipt of a license from OFAC, we anticipate that the merger will be completed in the first quarter of calendar year 2016.

Merger Consideration (Page 92)

        In the merger, each outstanding share of our common stock (except for shares held by Telcrest, by us and by stockholders who have properly exercised appraisal rights) will be converted into the right to receive the merger consideration, which will be between $1.77 and $2.19 per share in cash. The minimum merger consideration of $1.77 per share reflects the maximum potential reduction in the purchase price pursuant to the terms of the sale agreement, and the actual amount of such consideration will depend on the operating performance of our business during the second half of 2015 and the anticipated cash reserves that will be appropriate in light of potential liabilities at the time of closing. If our available cash at the effective time of the merger is insufficient to distribute merger consideration of at least $1.77 per share, we will resolicit stockholder approval for the proposed transactions. Otherwise, we may consummate the sale and the merger if our board of directors determines that all applicable conditions have been satisfied and the merger consideration is at least $1.77 per share.

Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merger (Page 39)

        After careful consideration of various factors described in the section entitled "Special Factors Related to the Transactions—Reasons for the Transactions; Recommendation of the Special Committee and Board of Directors; Fairness of the Transactions," beginning on page 39 of this proxy statement, and upon the unanimous recommendation of the special committee, our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy: (i) determined that the merger, the merger agreement and the other transactions contemplated by the merger agreement are fair to, and in the best interests of, our Company and our stockholders, and approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger; (ii) approved the execution and delivery of the merger agreement and, subject to obtaining the requisite stockholder approval thereof, our performance of the covenants and agreements contained in the merger agreement and the consummation of the transactions contemplated thereby, including the merger, upon the terms and subject to the conditions contained in the merger agreement; and (iii) recommended that the stockholders adopt the merger agreement and directed that such matter be submitted for consideration of our stockholders at the special meeting.

        Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, believes that the merger is advisable and in the best interests of, and fair to, our Company and our stockholders and recommends that the stockholders entitled to vote thereon adopt the merger agreement. In reaching these determinations, the members of our board of directors who participated in the decision acted in

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their capacity as directors with fiduciary obligations to our stockholders under Delaware law and on behalf of our Company. Accordingly, the determination of the fairness of the merger to our unaffiliated stockholders constitutes the determination of our Company, as well as the board of directors, except for the members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy. See "Special Factors Related to the Transactions—Reasons for the Transactions; Recommendation of the Special Committee and Board of Directors; Fairness of the Transactions" beginning on page 39 of this proxy statement. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, recommends that you vote "FOR" the adoption of the merger agreement.

Interests of Certain Persons in the Merger (Page 57)

        In considering the recommendation of our board of directors that you vote to adopt the merger agreement, you should be aware that certain of our directors and executive officers have financial interests in the merger that may be different from, or in addition to, those of our stockholders generally. Our board of directors was aware of and considered these interests, among other matters, in evaluating the merger agreement and the merger and in recommending that the merger agreement be adopted by our stockholders. These interests include the following:

    the receipt by each of the members of the special committee of fees as described above, whether or not the merger occurs; and

    that each share of our common stock held by MTG or our unaffiliated stockholders will be cancelled and exchanged for the merger consideration while each share of our common stock that is held by Telcrest will remain outstanding and the holder thereof will not be entitled to receive any merger consideration.

        See the section entitled "Special Factors Related to the Transactions—Effects of the Merger—Interests of Certain Persons in the Merger" beginning on page 57 of this proxy statement.

Material U.S. Federal Income Tax Consequences of the Merger (Page 58)

        In general, the receipt of cash in exchange for shares of our common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder (as defined in the section of this proxy statement entitled "Special Factors Related to the Transactions—Effects of the Merger—Material U.S. Federal Income Tax Consequences of the Merger" beginning on page 58 of this proxy statement) who receives cash in exchange for shares of common stock pursuant to the merger will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between (i) the amount of cash received in such exchange and (ii) the U.S. holder's adjusted tax basis in such shares. The receipt of cash by a non-U.S. holder (as defined in the section of this proxy statement entitled "Special Factors Related to the Transactions—Effects of the Merger—Material U.S. Federal Income Tax Consequences of the Merger" beginning on page 58 of this proxy statement) in exchange for shares of common stock pursuant to the merger will generally not be subject to U.S. federal income tax unless such non-U.S. holder has certain connections to the United States.

        Holders of our common stock should consult their tax advisors about the tax consequences to them of the exchange of shares of common stock for cash pursuant to the merger in light of their particular circumstances, including the applicability and effect of any federal estate or gift tax laws and any state, local, foreign and other tax laws. For more information on the material U.S. federal income tax consequences of the merger, see the section of this proxy statement entitled "Special Factors Related to the Transactions—Effects of the Merger—Material U.S. Federal Income Tax Consequences of the Merger" beginning on page 58 of this proxy statement.

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The Merger Agreement (Page 93)

Conditions to the Merger (Page 93)

        The respective obligations of our Company and Merger Sub to consummate the merger are subject to the satisfaction (or waiver, if permissible under applicable law) of the following conditions:

    either (i) the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon (which outstanding shares include those held by Telcrest) or (ii) if our board determines at or prior to our special meeting of the stockholders that the shares of common stock held by Telcrest have remained beneficially owned by Telcrest and that such shares are not blocked property pursuant to applicable sanctions, then the approval of (a) Telcrest and (b) at least a majority of the holders of the outstanding shares of our common stock that are not beneficially owned by Telcrest;

    the final determination of the consideration payable in respect of the sale;

    the granting by OFAC of a license permitting the merger;

    the absence of any temporary restraining order, preliminary or permanent injunction or other order issued by any Federal, state or local government administrative agency, commission or other governmental authority or agency or other legal restraint or prohibition having the effect of preventing or prohibiting the consummation of the merger; and

    the absence of any statute, rule, order or regulation enacted or promulgated by any Federal, state or local government administrative agency, commission or other governmental authority or agency of competent jurisdiction having the effect of prohibiting the consummation of the merger.

Treatment of Common Stock, Options and Other Equity Awards (Page 57)

    Common Stock.  At the effective time of the merger, each share of our common stock issued and outstanding (except for shares held by us, shares held by stockholders who have properly exercised appraisal rights and shares that are held by Telcrest) will convert into the right to receive the per share merger consideration, without interest, less any applicable withholding taxes. Each share of our common stock that is held by Telcrest will remain outstanding and the holder thereof will not be entitled to receive the per share merger consideration.

    Options.  At the effective time of the merger, each outstanding option will terminate. All outstanding options have exercise prices in excess of the per share merger consideration.

    Restricted Stock Units.  At the effective time of the merger, subject to our obligations described under the heading "Proposal 3—Advisory Vote on Management Retention Compensation—Management Retention and Incentive Arrangements" beginning on page 100 of this proxy statement, each outstanding restricted stock unit will terminate.

Appraisal Rights (Page 95)

        If the merger agreement is adopted by our stockholders, stockholders who do not vote in favor of the adoption of the merger agreement, who are entitled to appraisal rights under applicable law and who properly exercise and perfect their demand for appraisal of their shares of our common stock will be entitled to appraisal rights under Section 262 of the General Corporation Law of the State of Delaware, which we refer to as the DGCL, in connection with the merger. This means that stockholders who meet all requirements under Section 262 of the DGCL are entitled to receive payment in cash of the fair value of their shares of our common stock as determined by the Delaware Court of Chancery. Stockholders considering seeking appraisal should be aware that the fair value of

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their shares as determined by Section 262 of the DGCL could be less than, equal to, or more than the amount of merger consideration they would have received under the terms of the merger agreement if they did not seek appraisal of their shares.

        To exercise your appraisal rights, you must, among other things, submit a written demand for appraisal to the Company before the vote is taken on the adoption of the merger agreement, you must not submit a proxy or otherwise vote in favor of the proposal to adopt the merger agreement and you must continue to hold shares of our common stock of record through the effective time of the merger. Your failure to follow exactly the procedures specified under the DGCL will result in the loss of your appraisal rights. See "Appraisal Rights" beginning on page 95 of this proxy statement, as well as the text of the Delaware appraisal rights statute reproduced in its entirety as Annex C to this proxy statement. If you hold your shares of our common stock through a bank, broker, trustee or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker, trustee or other nominee to determine the appropriate procedures for the making of a demand for appraisal by the bank, broker, trustee or other nominee. In view of the complexity of the procedures specified under the DGCL, stockholders who may wish to pursue appraisal rights should promptly consult their legal and financial advisors.

Advisory Vote on Compensation of Named Executive Officers; Recommendation of the Board of Directors (page 100)

        In accordance with Section 14A and Rule 14a-21(c) under the Securities Exchange Act of 1934, which we refer to as the Exchange Act, we are seeking stockholder approval of an advisory (non-binding) vote with respect to compensation that may be paid or become payable to our named executive officers that is based on or otherwise related to the proposed transactions (which we refer to as management retention compensation), as described in "Proposal 3—Advisory Vote on Management Retention Compensation—Management Retention and Incentive Arrangements" beginning on page 100 of this proxy statement. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, recommends that you vote "FOR" the proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the proposed transactions.

        The proposal regarding "management retention" compensation requires the approval of a majority of the votes properly cast upon this proposal. Approval of this proposal is not a condition to completion of the sale or merger. The vote with respect to management retention compensation is an advisory vote and will not be binding on us. Therefore, regardless whether stockholders approve the management retention compensation, if the sale and merger are approved by the stockholders and completed, the management retention compensation will still be paid to our named executive officers to the extent payable in accordance with the terms of the agreements relating to such compensation.

Material Differences in Rights of Stockholders (Page 112)

        Telcrest Investments Limited, one of our stockholders, whom we refer to as Telcrest, holds shares of our common stock that, as of the date of this proxy statement, have been identified as blocked property by Computershare Trust Company, our transfer agent, pursuant to applicable sanctions associated with the Specially Designated Nationals and Blocked Persons List of the U.S. Department of Treasury, Office of Foreign Assets Control. Thus, upon consummation of the merger, all of the shares of our common stock owned by Telcrest will remain outstanding. See "Special Note Regarding Telcrest" beginning on page 1 of this proxy statement and "Material Differences in Rights of Stockholders" beginning on page 112 of this proxy statement.

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Certain Related Party Transactions (Page 112)

        On July 28, 2015, Xenon Capital Partners, which we refer to as Xenon, a financial advisory firm located in Moscow, was appointed by our special committee as its financial advisor to assist in reviewing, analyzing and executing the proposed sale and merger transactions. Ms. Tsukanova, the Co-Chairman of our board of directors, who was originally designated to serve on our board of directors by MTG Russia AB, which we refer to as MTG, pursuant to the stockholders' agreement that was then in place between us and our two largest stockholders, is a founder and managing director of Xenon. See "Fee Arrangements—Xenon Fee Arrangements" beginning on page 70 of this proxy statement.

Market Prices of the Company's Common Stock and Dividend Information (Page 114)

        The closing price of our common stock on the Nasdaq Global Select Market on September 24, 2015, the last trading day prior to the public announcement of the execution of the sale agreement, was $1.89 per share. On November 16, 2015, the most recent practicable date before this proxy statement was mailed to our stockholders, the closing price for our common stock on the Nasdaq Global Select Market was $1.80 per share. You are encouraged to obtain current market quotations for our common stock in connection with voting your shares of our common stock.

        We have declared and paid dividends in each calendar quarter of 2013 and 2014 and the first quarter of 2015, as set forth below.

Declaration Date
  Per Share
Dividend
  Aggregate
Dividend
($,000)
  Record Date   Payment Date

March 4, 2015

  $ 0.175   $ 27,271     March 16, 2015   March 26, 2015

March 5, 2014

    0.175     27,249     March 19, 2014   March 28, 2014

April 29, 2014

    0.175     27,258     June 16, 2014   June 26, 2014

July 25, 2014

    0.175     27,259     September 5, 2014   September 25, 2014

October 27, 2014

    0.175     27,258     December 1, 2014   December 23, 2014

March 5, 2013

    0.15     23,724     March 20, 2013   March 26 and April 8, 2013

April 30, 2013

    0.16     25,216     June 3, 2013   June 26, 2013

August 2, 2013

    0.16     24,914     September 2, 2013   September 26, 2013

November 5, 2013

    0.16     24,914     December 2, 2013   December 2, 2013

        $ 235,063          

        During the three months ended March 31, 2015 and the twelve months ended December 31, 2014, we declared and paid dividends to Telcrest of $6.9 and $27.7 million, respectively, which were blocked pursuant to applicable U.S. economic sanctions. During the three months ended March 31, 2015 and the twelve months ended December 31, 2014, we declared and paid dividends to MTG of $10.5 million and $42.0 million, respectively.

Delisting and Deregistration of the Company's Common Stock (Page 117)

        If the merger is completed, you will no longer be one of our stockholders, and our common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Exchange Act. As such, we would no longer file periodic reports with the SEC, on account of our common stock.

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Summary Historical Consolidated Financial Data of the Company

        The following summary historical consolidated financial data as of and for each of the years ended December 31, 2014 and 2013 are derived from our audited consolidated financial statements. The summary historical consolidated financial data as of and for each of the six month periods ended June 30, 2015 and 2014 are derived from our unaudited consolidated financial statements. You should read the following data in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and the related notes thereto set forth in our Annual Report on Form 10-K for the year ended December 31, 2014 and our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015 incorporated by reference into this proxy statement. See "Where You Can Find More Information" beginning on page 118 of this proxy statement.

 
  Nine Months Ended
September 30
  Year Ended
December 31,
 
 
  2014   2015   2013   2014  
 
  (Unaudited)
   
   
 
 
  (in thousands of US dollars,
except share and per share data)

 

Statement of Income Data:

                         

Revenues:

                         

Operating revenues

  $ 529,126   $ 248,663   $ 832,103   $ 711,373  

Expenses:

                         

Operating expenses

    (398,107 )   (232,564 )   (624,404 )   (560,312 )

Operating income

    131,019     16,099     207,699     151,061  

Foreign currency gains

    (3,546 )   1,817     1,658     9,166  

Interest income

    8,698     4,311     11,615     10,458  

Interest expense

    (395 )   (187 )   (768 )   (486 )

Other non-operating income (loss), net

    (771 )   (177 )   26     (1,325 )

Equity in (loss) income of investee companies

    (425 )   (20 )   1,266     (713 )

Income before income tax

    134,580     21,843     221,496     168,161  

Income tax expense

    (41,906 )   36,262     (61,335 )   (54,785 )

Consolidated net income

  $ 92,674   $ 58,105   $ 160,161   $ 113,376  

Less: Income attributable to noncontrolling interest

    (3,202 )   (832 )   (7,821 )   (5,284 )

Net income attributable to CTC Media Inc. stockholders

  $ 89,472   $ 57,273   $ 152,340   $ 108,092  

Operating income per share, basic and diluted

    0.84     0.10     1.32     0.97  

Net income per share attributable to CTC Media, Inc. stockholders:

                         

Basic

    0.57     0.37     0.97     0.69  

Diluted

    0.57     0.37     0.97     0.69  

Weighted average common shares outstanding:

                         

Basic

    155,742,190     155,996,870     156,889,533     155,747,225  

Diluted

    155,970,240     156,109,659     156,932,452     156,008,428  

Dividends declared per share

    0.53     0.17     0.63     0.70  

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  Nine Months Ended
September 30
  Year Ended
December 31,
 
 
  2014   2015   2013   2014  
 
  (Unaudited)
   
   
 
 
  (in thousands of US dollars,
except share and per share data)

 

Balance Sheet Data:

                         

Total current assets

    452,883     264,499     535,221     358,078  

Property and equipment, net

    26,671     13,461     36,874     18,520  

Intangible assets, net

    66,471     33,391     90,306     45,983  

Goodwill

    112,427     45,563     135,276     53,627  

Programming rights, net

    103,591     76,403     121,802     72,446  

Total noncurrent assets

    375,281     237,701     435,755     250,975  

Total assets

    828,164     502,200     970,976     609,053  

Total current liabilities

    203,342     109,428     223,311     184,701  

Total noncurrent liabilities

    9,758     4,157     13,549     6,910  

Total liabilities

    213,100     113,585     236,860     191,611  

Total stockholders' equity

    615,064     388,615     734,116     417,442  

Total liabilities and stockholders' equity

    828,164     502,200     970,976     609,053  

Book value per share, basic

    3.94     2.48     3.65     2.18  

Book value per share, diluted

    3.93     2.48     3.65     2.17  

Summary Unaudited Pro Forma Condensed Consolidated Financial Data

        The following table sets forth summary unaudited pro forma condensed combined financial information for the Company after giving effect to the proposed transactions. The summary unaudited pro forma condensed combined financial information is derived from the unaudited pro forma condensed combined financial statements included in this proxy statement. The summary unaudited pro forma condensed consolidated financial data set forth below has been provided for informational purposes only and does not purport to be indicative of what would have occurred had the sale actually been consummated as of such dates, nor is it indicative of results which may occur in the future. The actual financial position and results of operations, including our cash available for distribution in the merger, may differ significantly from the pro forma amounts reflected below due to a variety of factors. For a complete discussion of the pro forma adjustments underlying the amounts in the table below, please see the section of this proxy statement entitled "Unaudited Pro Forma Financial Information" beginning on page 104 of this proxy statement.

 
  Nine Months Ended
September 30
  Year Ended
December 31
 
 
  2015   2014  
 
  (unaudited)
(in millions of US dollars,
except per share data)

 

Unaudited Pro Forma Condensed Combined Statements of Income Data:

             

Revenues

  $   $ 1  

Total operating expenses

    (3 )   (4 )

Operating income

    (3 )   (5 )

Net income

  $     28  

 

 
  As of,
September 30
 
 
  2015  
 
  (unaudited)
 

Unaudited Pro Forma Condensed Combined Balance Sheet Data:

       

Total assets

  $ 421  

Total liabilities

    56  

Total stockholders' equity

    365  

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SPECIAL NOTE REGARDING TELCREST

Telcrest's Investment in Our Company

        Telcrest Investments Limited, a Cyprus company, which we refer to as Telcrest, currently holds 39,548,896 shares of our common stock, representing approximately 25% of our outstanding common stock.

        The shares of our common stock held by Telcrest are deemed to be outstanding for purposes of calculating the number of shares outstanding in connection with the votes required in connection with the sale and the merger, although we believe they may not be voted for so long as they are treated as "blocked property" by Computershare Trust Company, our transfer agent, which we refer to as Computershare, pursuant to the sanctions described below.

Telcrest's Status as a Sanctioned Party

        On March 14, 2014, the Office of Foreign Assets Control, or OFAC, of the U.S. Department of Treasury designated Bank Rossiya as a Specially Designated National and Blocked Person, which we refer to as an SDN, for purposes of U.S. economic sanctions related to the situation in Ukraine. As of that date, Bank Rossiya directly or indirectly owned more than 50% of Telcrest, and accordingly Telcrest was also considered to be an SDN for purposes of U.S. sanctions at such time and, thereafter, the shares of our common stock held by Telcrest were identified by Computershare as blocked property pursuant to applicable sanctions associated with the SDN list of OFAC. Accordingly, the shares of our common stock, among other property, of Telcrest that were in the possession or control of our Company or Computershare were reported to OFAC as blocked property pursuant to applicable sanctions requirements.

Notification of Change in Telcrest's Ownership, September 2015

        On September 25, 2015, Telcrest notified us that as a result of two transactions with third parties relating to its share capital that it is no longer 50% or more owned, directly or indirectly, in the aggregate by one or more SDNs, including Bank Rossiya. Telcrest also subsequently filed with the SEC an amendment to its Report on Schedule 13D relating to this change in ownership. Assuming this information is accurate, Telcrest would no longer be considered to be owned, directly or indirectly, 50 percent or more in the aggregate by one or more SDNs. Nonetheless, as of the date of this proxy statement, we believe our shares held by Telcrest remain blocked property, until such time as OFAC authorizes their unblocking or Bank Rossiya is removed from the SDN list.

Recusal of Telcrest-Nominated Director from CTC Board Matters

        Pursuant to our economic sanctions compliance policy, Angelo Codignoni, Alexander Pentya and Timur Weinstein, members of our board of directors who were initially nominated by Telcrest pursuant to our stockholders' agreement with Telcrest and MTG as then in effect, did not vote on the transactions described in this proxy statement. Although such directors were permitted to obtain materials provided to our board of directors in connection with their consideration and evaluation of the proposed transactions, and to share their views of the proposed transactions with our board of directors, Mr. Codignoni, Mr. Pentya and Mr. Weinstein were not permitted to vote, did not vote or otherwise approve the proposed transactions and have not made, and do not make, any recommendation to our stockholders as to whether to vote in favor of the matters being submitted to stockholders at our special meeting of stockholders. References to the vote, decision or recommendation of our board of directors or any committee of our board contained in this proxy statement do not include any view, opinion or recommendation of Mr. Codignoni, Mr. Pentya or Mr. Weinstein, whether or not such references expressly note such exclusion.

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING, THE SALE AND THE MERGER

        The following questions and answers are intended to address briefly some commonly asked questions regarding the sale, the sale agreement, the merger, the merger agreement and the special meeting. These questions and answers may not address all questions that may be important to you as a Company stockholder. Please refer to the "Summary" and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to in this proxy statement, which you should read carefully. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under "Where You Can Find More Information" beginning on page 118 of this proxy statement.

Background to the Transactions

        We are pursuing the sale and the subsequent merger in response to the adoption of the Mass Media Law, which will impose new limitations on non-Russian ownership of Russian television broadcasters effective January 1, 2016. See "Special Factors Related to the Transactions—Background to the Transactions—Overview" beginning on page 27 of this proxy statement. We believe that it is important that you consider the proposed transactions in the context of the pending effectiveness of the Mass Media Law.

Q.    What are the proposed transactions and what effects will they have on the Company?

A.
The proposed transactions are: (i) our sale of 75% of the participation interests in CTC Investments to UTV-Management pursuant to the sale agreement and (ii) the subsequent merger of Merger Sub with and into the Company, with the Company surviving such merger and each holder of our outstanding shares of common stock as of the effective time of the merger (other than Telcrest and stockholders who have property exercised appraisal rights) becoming entitled to receive the merger consideration. If the proposal to approve the sale is approved by our stockholders and the other closing conditions under the sale agreement have been satisfied or waived, upon consummation of the sale, together with the issuance of new participation interests by CTC Investments to UTV-Management or its affiliate, UTV-Management (together with its affiliate) would own 80% and we will own 20% of the participation interests in CTC Investments, to ensure compliance with the requirements of the Mass Media Law. If the proposal to adopt the merger agreement is adopted, you will no longer hold shares in our Company, we will no longer be a publicly traded corporation, our common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Exchange Act, we will no longer file periodic reports with the SEC on account of our common stock and you will no longer have any interest in our future earnings or growth.

Q.    What will I receive if the merger is completed?

A.
Upon completion of the merger, you will be entitled to receive in respect of each share of our common stock you own the merger consideration in cash, without interest, less any applicable withholding taxes, unless you have properly exercised and not withdrawn your appraisal rights under the General Corporation Law of the State of Delaware, which we refer to as the DGCL, with respect to such shares. The per share merger consideration will be between $1.77 and $2.19 in cash. The minimum merger consideration of $1.77 per share reflects the maximum potential reduction in the purchase price pursuant to the terms of the sale agreement, and the actual amount of such consideration will depend on the operating performance of our business during the second half of 2015 and the anticipated cash reserves that will be appropriate in light of potential liabilities at the time of closing. If our available cash at the effective time of the merger is insufficient to distribute merger consideration of at least $1.77 per share, we will resolicit stockholder approval for the proposed transactions. Otherwise, we may consummate the sale and the merger if our board of directors determines that all applicable conditions have been satisfied

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    and the merger consideration is at least $1.77 per share. You will not own any shares of the capital stock in the surviving corporation.

Q:    Will I own any shares of Company common stock or Merger Sub common stock after the merger?

A:
No. You will be paid cash for your shares of our common stock.

Q.    How does the per share merger consideration compare to the market price of the Company's common stock prior to announcement of the merger?

A.
The per share merger consideration, based on $1.98 per share, the mid-point of the maximum per share range, represents (i) a premium of 4.8%, based on the closing market price of $1.89 per share on September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015; (ii) a discount of 8.3%, based on the closing market price of $2.16 per share on July 2, 2015, being the last trading day before we announced the receipt of a non-binding offer from UTH for 75% of participation interests in CTC Investments; (iii) a premium of 7.0%, based on the volume-weighted average price (VWAP) of $1.85 over the period from July 6, 2015, being the date on which we announced the receipt of a non-binding offer from UTH, to September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015; (iv) a premium of 0.0%, based on volume-weighted average price (VWAP) of $1.98 for the last 90 days of the period ended on September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015; and (v) a premium of 10.0%, based on the volume-weighted average price (VWAP) of $1.80 for the last 30 days of the period ended on September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015.

Q.    How does our board of directors recommend that I vote?

A.
Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, recommends that you vote "FOR" approval of the sale, "FOR" adoption of the merger agreement, "FOR" approval of the advisory (non-binding) proposal to approve the compensation that may be paid or become payable to our named executive officers that is based on or otherwise related to the proposed transactions, and "FOR" approval of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement.

Q.    What was the role of the special committee?

A.
Following the receipt of an offer from UTV-Management to purchase 75% of the participation interests in CTC Investments, our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, determined that it was advisable and in the best interests of our Company and our unaffiliated stockholders to form a special committee, consisting solely of non-employee, independent directors, not originally designated by either MTG or Telcrest, for the purpose of reviewing and evaluating the proposal and any alternatives to the proposal. Our board of directors appointed Werner Klatten, Tamjid Basunia and Jean-Pierre Morel as members of the special committee. The special committee was delegated full power and authority to: (i) consider, review, evaluate, discuss and determine whether any alternatives to the proposal should be considered or pursued, and, if so, to design, oversee, establish and implement a process therefor; (ii) evaluate and analyze the proposal, and consider whether, and, if so, in what manner, we should consider or pursue a potential transaction with UTV-Management; (iii) reject the proposal or any other proposal that might be made for a potential transaction with UTV-Management;

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    (iv) formulate, structure, negotiate and document the terms of any potential transaction and any alternatives to the proposal; (v) approve the form of all requisite documentation or agreements involving, responding to or relating to the proposal, any potential transaction and any alternatives to the proposal; (vi) oversee and direct any and all agreements, proceedings, activities, public announcements, press releases, SEC filings and litigation of the Company involving, responding to or relating to the proposal, any potential transaction and any alternatives to the proposal; (vii) determine whether the proposal, any potential transaction and any alternatives to the proposal are fair to, and in the best interests of our Company and all of our stockholders (other than to stockholders who have an interest therein or are affiliated with any such person); (vii) recommend to our board of directors what action, if any, should be taken by our board of directors and the Company with respect to the proposal, any potential transaction and any alternatives to the proposal; and (viii) exercise all such other power and authority that otherwise would be exercisable by our board of directors that may be necessary, useful, helpful, advisable or appropriate to carry out and fulfill its duties and responsibilities with respect to the proposal, any potential transactions and any alternatives to the proposal.

    See the section entitled "Special Factors Related to the Transaction—Background to the Transactions" beginning on page 27 of this proxy statement.

Q.    When do you expect the sale and the merger to be completed?

A.
We are working towards completing each of the sale and, subsequently, the merger as soon as possible. Assuming timely satisfaction of closing conditions, we anticipate that the sale will close on December 21, 2015, or on such other date or at such other time as may be mutually agreed by the parties, described in the section entitled "The Sale Agreement—When the Sale will be Effective" beginning on page 79 of this proxy statement. Subject to the receipt of a license from OFAC, the merger will be completed following the completion of the sale, on a date to be determined by us and Merger Sub, which date we anticipate will be during the first quarter of calendar year 2016. See the sections entitled "The Merger Agreement—Closing" and "The Merger Agreement—Effective Time" beginning on page 93 of this proxy statement.

Q.    What happens if the sale is not completed?

A.
If the sale is not approved by our stockholders or if the sale is not completed for any other reason, our ownership of CTC Investments would not comply with the foreign ownership restrictions under the Mass Media Law as of January 1, 2016. If the ownership of CTC Investments is not in compliance with such restrictions by such date, we will not be permitted to exercise our voting or economic rights in CTC Investments, and the Russian government will have the authority to revoke the mass media registration and broadcasting licenses of CTC Investments and its subsidiaries. Such a result would likely eliminate any chance of obtaining the return of substantial value to our stockholders from our operating businesses.

Q.    What happens if the merger is not completed?

A.
If the merger agreement is not adopted by our stockholders or if the merger is not completed for any other reason, including in the event that we do not obtain any required license from OFAC, our stockholders will not receive any payment for their shares of our common stock in connection with the merger. Instead, our board of directors will continue to evaluate what alternative steps to take following consummation of the sale, including whether to declare a special dividend and/or to delist our common stock from the Nasdaq Global Select Market and/or to deregister our common stock under the Exchange Act.

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Q.    Is the merger expected to be taxable to me?

A.
Yes. The exchange of shares of our common stock for cash pursuant to the merger generally will be a taxable transaction to U.S. holders (as defined in "Special Factors Related to the Transactions—Effects of the Merger—Material U.S. Federal Income Tax Consequences of the Merger" beginning on page 58 of this proxy statement) for U.S. federal income tax purposes. If you are a U.S. holder and you exchange your shares of our common stock pursuant to the merger, you will generally recognize gain or loss in an amount equal to the difference, if any, between the cash payments made pursuant to the merger and your adjusted tax basis in your shares of our common stock. Backup withholding may also apply to the cash payments made pursuant to the merger, unless the U.S. holder or other payee provides a taxpayer identification number, certifies that such number is correct and otherwise complies with the backup withholding rules. You should read "Special Factors Related to the Transactions—Effects of the Merger—Material U.S. Federal Income Tax Consequences of the Merger" beginning on page 58 of this proxy statement for a more detailed discussion of the U.S. federal income tax consequences of the merger. You should also consult your tax advisor for a complete analysis of the effect of the merger on your federal, state and local and/or foreign taxes.

Q:    Do any of the Company's directors or officers have interests in the sale or the merger that may differ from or be in addition to my interests as a stockholder?

A.
Yes. In considering the recommendation of our board of directors with respect to the sale and the merger, you should be aware that certain of our directors and executive officers have interests in the sale and the merger that may be different from, or in addition to, the interests of our stockholders generally. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, was aware of and considered these interests, among other matters, in evaluating the sale and the merger and in recommending the approval of the sale and the adoption of the merger agreement to our stockholders. See "Special Factors Related to the Transactions—Effects of the Merger—Interests of Certain Persons in the Merger" beginning on page 57 of this proxy statement.

Q:    Do any of the Company's stockholders have interests in the merger that may differ from or be in addition to my interests as a stockholder?

A.
Yes. In considering the recommendation of our board of directors with respect to the merger, you should be aware that we have, as of the date of this proxy statement, identified the shares of our common stock held by Telcrest as blocked property pursuant to applicable sanctions associated with the Specially Designated Nationals and Blocked Persons List of the U.S. Department of Treasury, Office of Foreign Assets Control. Accordingly, we have applied to OFAC for a license permitting us to effect the merger. The shares of our common stock held by Telcrest will not participate in the merger and will not receive the merger consideration. Thus, upon consummation of the merger, the shares of our common stock owned by Telcrest will remain outstanding and Telcrest will be our sole stockholder. We believe that this structure will enable us to maximize the amount of cash that can be returned to our public stockholders and MTG in a manner that is consistent with the applicable sanctions requirements. We can provide no assurance that OFAC will issue a license in respect of the merger. See "Special Note Regarding Telcrest" beginning on page 1 of this proxy statement and "Material Differences in Rights of Stockholders" beginning on page 112 of this proxy statement.

Q:    What happens to Company stock options in the merger?

A:
At the effective time of the merger, each outstanding option will terminate. All outstanding options have exercise prices in excess of the per share merger consideration.

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Q:    What happens to the restricted stock units of the Company in the merger?

A:
Upon the consummation of the merger, all restricted share units will terminate, subject to our obligations described under the heading "Proposal 3—Advisory Vote on Management Retention Compensation—Management Retention and Incentive Arrangements."

Q.    Why am I receiving this proxy statement and proxy card or voting instruction form?

A.
You are receiving this proxy statement and proxy card or voting instruction form because you own shares of our common stock as of November 16, 2015, the record date for the special meeting. This proxy statement describes matters on which we urge you to vote and is intended to assist you in deciding how to vote your shares of our common stock with respect to such matters.

Q.
When and where is the special meeting?

A.
The special meeting of stockholders of the Company will be held on December 17, 2015 beginning at 4:00 p.m., local time, at the offices of Morgan, Lewis & Bockius UK LLP, Condor House, 5-10 St. Paul's Churchyard, London EC4M 8AL, United Kingdom.

Q.    What am I being asked to vote on at the special meeting?

A.
You are being asked to consider and vote on (i) a proposal to approve the sale by us to UTV-Management of 75% of the participation interests in CTC Investments and the approval by us of the issuance of an additional, new participation interest in CTC Investments to UTV-Management or its affiliate following the closing of the sale, which would result in UTV-Management (together with its affiliate) holding 80% of CTC Investments to ensure compliance with the requirements of the Mass Media Law, (ii) a proposal to adopt the merger agreement that provides for the merger of Merger Sub with and into the Company, with the Company surviving, (iii) a proposal to approve, on an advisory (non-binding) basis, of the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the proposed transactions and (iv) a proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement.

Q.    Why am I being asked to cast an advisory (non-binding) vote to approve management retention compensation that may be paid or become payable to the Company's named executive officers that is based on or otherwise relates to the proposed transactions?

A.
The Securities and Exchange Commission has adopted rules requiring us to seek an advisory (non-binding) vote with respect to certain compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the proposed transactions, or management retention compensation.

Q.    What will happen if stockholders do not approve the management retention compensation at the special meeting?

A.
Approval of management retention compensation payable under existing agreements that such named executive officers may receive in connection with the transactions is not a condition to completion of the transactions. The vote with respect to management retention compensation is an advisory vote and will not be binding on us. Therefore, regardless of whether stockholders approve the management retention compensation, if the sale is approved by the stockholders and the sale is completed, the management retention compensation will still be paid to such named executive officers to the extent payable in accordance with the terms of the agreements relating to such compensation.

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Q.    What vote is required for the Company's stockholders to approve the sale and the sale agreement?

A.
The approval of the sale requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote on the matter. The shares of our common stock held by Telcrest are outstanding for purposes of calculating the number of shares outstanding in connection with the votes required in connection with the sale, although we believe they may not be voted for so long as they continue to be treated as "blocked property" pursuant to applicable sanctions. See "Special Note Regarding Telcrest."

    Because the affirmative vote required to approve the sale is based upon the total number of outstanding shares of our common stock, if you fail to submit a proxy or vote in person at the special meeting, or you abstain, or you do not provide your bank, broker, trustee or other nominee with instructions, as applicable, this will have the same effect as a vote "AGAINST" approval of the sale.

Q.    What vote is required for the Company's stockholders to approve the proposal to adopt the merger agreement?

A.
The adoption of the merger agreement requires either (i) the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon (which outstanding shares include those held by Telcrest) or (ii) if our board determines at or prior to our special meeting of the stockholders that the shares of common stock held by Telcrest have remained beneficially owned by Telcrest and that such shares are not blocked property pursuant to applicable sanctions, then the approval of (a) Telcrest and (b) at least a majority of the holders of the outstanding shares of our common stock that are not beneficially owned by Telcrest.

    Because the affirmative vote required to approve the proposal to adopt the merger agreement is based upon the total number of outstanding shares of our common stock, if you fail to submit a proxy or vote in person at the special meeting, or you abstain, or you do not provide your bank, broker, trustee or other nominee with instructions, as applicable, this will have the same effect as a vote "AGAINST" approval of the proposal to adopt the merger agreement.

Q.    What vote is required for the Company's stockholders to approve the advisory (non-binding) vote on the management retention compensation?

A.
The adoption of the management retention compensation proposal requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock present in person or represented by proxy and voting on the matter at the special meeting.

    Abstaining will not have an effect on the management retention compensation proposal. If your shares of our common stock are held through a bank, broker, trustee or other nominee and you do not instruct your bank, broker, trustee or other nominee to vote your shares of our common stock, your shares of our common stock will not be voted, but this will not have an effect on the management retention compensation proposal.

Q.    What vote of our stockholders is required to approve the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement?

A.
Approval of the proposal to adjourn the special meeting, if necessary, for the purpose of soliciting additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement, requires the affirmative vote of the holders of a majority of the shares of our common stock present in person or represented by proxy and voting on the matter at the special meeting.

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    Abstaining will not have an effect on the proposal to adjourn the special meeting, if necessary, for the purpose of soliciting additional proxies. If your shares of our common stock are held through a bank, broker, trustee or other nominee and you do not instruct your bank, broker, trustee or other nominee to vote your shares of our common stock, your shares of our common stock will not be voted, but this will not have an effect on the proposal to adjourn the special meeting.

Q.    Who can vote at the special meeting?

A.
All of the holders of our common stock (other than holders of shares that have been identified as blocked property by Computershare pursuant to applicable sanctions associated with the Specially Designated Nationals and Blocked Persons List of the U.S. Department of Treasury, Office of Foreign Assets Control) of record as of the close of business on November 16, 2015, the record date for the special meeting, are entitled to receive notice of, and to vote at, the special meeting. Each holder of our common stock that is entitled to vote at the special meeting is entitled to cast one vote on each matter properly brought before the special meeting for each share of our common stock that such holder owned as of the record date.

Q.    What is a quorum?

A.
A majority of the shares of our common stock outstanding at the close of business on the record date and entitled to vote, including shares of our common stock that have been identified as blocked property by Computershare pursuant to applicable sanctions associated with the Specially Designated Nationals and Blocked Persons List of the U.S. Department of Treasury, Office of Foreign Assets Control, present in person or represented by proxy at the special meeting, constitutes a quorum for the purposes of the special meeting. Abstentions (but not broker non-votes) will be counted as present for the purpose of determining whether a quorum is present. A quorum is necessary to transact business at the special meeting.

Q.    How do I vote?

A.
If you are a stockholder of record as of the record date, you can vote your shares or submit a proxy in any of the following ways:

in person—you may attend the special meeting and cast your vote there;

by proxy—stockholders of record may choose to submit a proxy by signing and dating the proxy card they receive and returning it in the accompanying pre-paid reply envelope;

over the Internet—the website for submitting proxies via the Internet is identified on your proxy card; or

by using a toll-free telephone number—the telephone number for submitting proxies by telephone is identified on your proxy card.

    If you are a beneficial owner, please refer to the instructions provided by your bank, broker, trustee or other nominee to see which of the above choices are available to you. Please note that, if you are a beneficial owner and wish to vote in person at the special meeting, you must provide a legal proxy from your bank, broker, trustee or other nominee.

    A control number, located on your proxy card, is designed to verify your identity and allow you to submit a proxy, and to confirm that your voting instructions have been properly recorded, when submitting a proxy over the Internet or by telephone. Please be aware that if you submit a proxy over the Internet, you may incur costs such as telephone and Internet access charges for which you will be responsible.

    Even if you plan to attend the special meeting, we request that you complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying pre-paid reply

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      envelope, or submit your proxy by telephone or the Internet prior to the special meeting, to ensure that your shares of our common stock will be represented at the special meeting if you are unable to attend.

Q.    What is the difference between holding shares as a stockholder of record and as a beneficial owner?

A.
If your shares of our common stock are registered directly in your name with our transfer agent, Computershare Trust Company, you are considered, with respect to those shares of our common stock, the "stockholder of record." This proxy statement and your proxy card have been sent directly to you by us.

    If your shares of our common stock are held through a bank, broker, trustee or other nominee, you are considered the "beneficial owner" of shares of our common stock held in "street name." In that case, this proxy statement has been forwarded to you by your bank, broker, trustee or other nominee who is considered, with respect to those shares of our common stock, the stockholder of record. As the beneficial owner, you have the right to direct your bank, broker, trustee or other nominee how to vote your shares of our common stock by following their instructions for voting.

Q.    If my shares of the Company's common stock are held in "street name" by my bank, broker, trustee or other nominee, will my bank, broker, trustee or other nominee vote my shares of the Company's common stock for me?

A.
Your bank, broker, trustee or other nominee will only be permitted to vote your shares of our common stock if you instruct your bank, broker, trustee or other nominee how to vote. You should follow the procedures provided by your bank, broker, trustee or other nominee regarding the voting of your shares of our common stock. If you do not instruct your bank, broker, trustee or other nominee to vote your shares of our common stock, your shares of our common stock will not be voted, and the effect will be the same as a vote "AGAINST" the proposal to approve the sale and as a vote "AGAINST" the proposal to adopt the merger agreement. There will not be any effect on the approval of the advisory (non-binding) proposal to approve the compensation that may be paid or become payable to our named executive officers that is based on or otherwise related to the proposed transactions or approval of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement.

Q.    How can I change or revoke my proxy?

A.
You have the right to revoke a proxy, whether submitted over the Internet, by telephone or by mail, at any time before it is exercised, by submitting a later-dated proxy through any of the methods available to you, by giving written notice of revocation to our Corporate Secretary, which must be filed with the Corporate Secretary by the time the special meeting begins, or by voting by ballot at the special meeting. Attending the special meeting, by itself, is not enough to revoke a proxy. If you are a beneficial owner and wish to revoke your voting instructions, you should follow the instructions provided by your bank, broker, trustee or other nominee.

Q.    What is a proxy?

A.
A proxy is your legal designation of another person, referred to as a "proxy," to vote your shares of our common stock. The written document describing the matters to be considered and voted on at the special meeting is called a "proxy statement." The document used to designate a proxy to vote your shares of stock is called a "proxy card." Our board of directors has designated Natasha Tsukanova and Werner Klatten, with full power of substitution, as proxies for the special meeting.

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Q.    If a stockholder submits a proxy, how are the shares of the Company's common stock voted?

A.
Regardless of the method you choose to submit a proxy, the individuals named on the enclosed proxy card, or your proxies, will vote your shares of our common stock in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify that your shares of our common stock be voted for or against, or abstain from voting on all, some or none, of the specific items of business to come before the special meeting.

    If you properly sign your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted "FOR" approval of the sale, "FOR" adoption of the merger agreement, "FOR" approval of the advisory (non-binding) proposal to approve the compensation that may be paid or become payable to our named executive officers that is based on or otherwise related to the proposed transactions, and "FOR" approval of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement.

Q.    How are votes counted?

A.
For the proposal to approve the sale, you may vote "FOR," "AGAINST," or "ABSTAIN." Abstentions and broker non-votes will have the same effect as votes "AGAINST" approval of the sale.

    For the proposal to adopt the merger agreement, you may vote "FOR," "AGAINST," or "ABSTAIN." Abstentions and broker non-votes will have the same effect as votes "AGAINST" adoption of the merger agreement.

    For the proposal to approve, on an advisory (non-binding) basis, of the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the proposed transactions, you may vote "FOR," "AGAINST," or "ABSTAIN." Abstentions and broker non-votes will not have an effect on the proposal.

    For the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies, you may vote "FOR," "AGAINST," or "ABSTAIN." Abstentions and broker non-votes will not have an effect on the proposal.

Q.    Who will count the votes?

A.
A representative of our transfer agent, Computershare Trust Company, or of our independent legal counsel, will count the votes and act as an inspector of election.

Q.    What do I do if I receive more than one proxy or set of voting instructions?

A.
If you hold shares of our common stock in "street name" through a bank, broker, trustee or other nominee and also directly as a record holder or otherwise, you may receive more than one proxy and/or set of voting instructions relating to the special meeting.

    These should each be voted and/or returned separately in accordance with the instructions provided in this proxy statement, in order to ensure that all of your shares of our common stock are voted.

Q.    What happens if I sell my shares of the Company's common stock before the special meeting?

A.
The record date for stockholders entitled to vote at the special meeting is earlier than the date of the special meeting. If you transfer your shares of our common stock after the record date, you will retain your right to vote at the special meeting but, unless special arrangements are made, you

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    will transfer the right to receive the per share merger consideration to the person to whom you transfer your shares.

Q.    Who will solicit and pay the cost of soliciting proxies?

A.
We have engaged Georgeson Inc., or Georgeson, a proxy solicitor, to assist in the solicitation of proxies for the special meeting. We estimate that we will pay Georgeson a fee of approximately $13,000, plus $5.00 per each call made to or received from our stockholders. We will reimburse Georgeson for reasonable out-of-pocket expenses and will indemnify Georgeson and our affiliates against certain claims, liabilities, losses, damages and expenses. We may also reimburse banks, brokers, trustees, nominees and other fiduciaries representing beneficial owners of shares of our common stock for their expenses in forwarding soliciting materials to beneficial owners of our common stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Q.    What do I need to do now?

A.
Even if you plan to attend the special meeting, after carefully reading and considering the information contained in this proxy statement, including the attached annexes, please promptly submit your proxy to ensure that your shares are represented at the special meeting. If you hold your shares of our common stock in your own name as the stockholder of record, please submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-paid reply envelope, using the telephone number printed on your proxy card, or using the Internet voting instructions printed on your proxy card. If you decide to attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. If you are a beneficial owner, please refer to the instructions provided by your bank, broker, trustee or other nominee to see which of the above choices are available to you.

Q.    Should I send in my stock certificates now?

A.
No. You will be sent a letter of transmittal promptly after the completion of the merger describing how you may exchange your shares of our common stock for the per share merger consideration. If your shares of our common stock are held in "street name" by your bank, broker, trustee or other nominee, you will receive instructions from your bank, broker, trustee or other nominee as to how to effect the surrender of your "street name" shares of our common stock in exchange for the per share merger consideration. Please do NOT return your stock certificate(s) with your proxy.

Q.    Am I entitled to exercise appraisal rights under the DGCL instead of receiving the per share merger consideration for my shares of the Company's common stock?

A.
Yes, provided that you are entitled to appraisal rights under applicable law and comply with all applicable requirements and procedures pursuant to Section 262 of the DGCL. See the section entitled "Appraisal Rights" beginning on page 95 of this proxy statement, as well as the text of the Delaware appraisal rights statute reproduced in its entirety as Annex C to this proxy statement.

Q.    Who can help answer my other questions?

A.
If you have additional questions about the sale, need assistance in submitting your proxy or voting your shares of our common stock, or need additional copies of the proxy statement or the enclosed proxy card, please contact Georgeson, by telephone toll-free at +1 (866) 821-2614 (banks, brokers, trustees or other nominees may call collect at +1 (781) 575-2137), or by email at CTCMEDIA@georgeson.com.

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SPECIAL FACTORS RELATED TO THE TRANSACTIONS

Background to the Transactions

Overview

        On September 17, 2014, proposed legislation was introduced in the Russian Parliament (the Duma) to impose more restrictive limitations on foreign (non-Russian) ownership and control of registered mass media in Russia, including television broadcasters. This amendment to the Russian law "On Mass Media," which, as amended, we refer to as the Mass Media Law, was signed by the Russian president on October 14, 2014, and will come into force on January 1, 2016. Under the Mass Media Law, among other things, the ultimate beneficial ownership and control of non-Russian persons and entities in Russian mass media entities may not exceed 20%. In the event that a mass media company fails to comply with the ownership and control requirements of the Mass Media Law by January 1, 2016, the non-Russian owners of the Russian mass media company will not be allowed to exercise their voting or other rights in respect of ownership interests in the relevant Russian mass media company, and the Russian governmental authorities would have the authority to revoke the relevant mass media registration and related licenses, including broadcasting licenses. The Mass Media Law provides a one-year grace period for compliant Russian ultimate beneficial holders that hold more than 20% of the participation interests in a Russian mass media company through non-Russian holding entities.

        Neither the ownership by our Company, as a Delaware corporation, of its Russian television broadcasting businesses, nor our current ownership structure, with the majority of our common stock held by non-Russian stockholders, would comply with the foreign-ownership requirements of the Mass Media Law as of January 1, 2016. As of November 6, 2015, our common stock was held as follows:

    approximately 36% was publicly traded on the Nasdaq Global Select Market, and we understand was held principally by institutional investors in the United States and Western Europe;

    approximately 38% was held by MTG Russia AB, which we refer to as MTG, an affiliate of Modern Times Group MTG AB, an international media company incorporated in Sweden, publicly listed on the Nasdaq OMX Stockholm Market; and

    approximately 25% was held by Telcrest (see "Special Note Regarding Telcrest").

        If the ownership structure of our operating businesses (including the ownership of our subsidiary CTC Investments) does not comply with the foreign ownership requirements of the Mass Media Law by January 1, 2016, the consequences would be extremely severe, including the following:

    we would not be permitted to exercise our voting or economic rights in our Russian subsidiaries (which constitute substantially all of the business of our group); and

    the Russian government would have the authority to revoke the mass media registration and broadcasting licenses of our operating businesses in Russia.

        We believe that these consequences would effectively eliminate our ability to obtain any substantial return for our U.S. and European stockholders.

Alternatives Considered

        Since the introduction of the proposed Mass Media Law in September 2014, our board of directors and its committees have sought to identify and consider any potentially viable options for achieving compliance with the Mass Media Law. The principal potential alternatives to a sale or divestiture transaction that were identified by or for our board of directors and considered by our board of directors were the following:

    Lobbying efforts.  Our board of directors pursued the possibility of seeking amendments to the Mass Media Law, or waivers or exemptions from its application to our operating businesses, or

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      to entertainment broadcasters and/or publicly listed companies generally. Such efforts were unsuccessful, and we have confirmed with the relevant government authorities that no such amendments, waivers or exemptions are contemplated.

    Corporate restructuring.  Our board of directors and its committees considered whether it would be feasible, from both a legal and a practical perspective, to separate our operating group's regulated broadcasting business (which requires a mass media registration and broadcasting licenses) from its unregulated businesses (including content acquisition and production, and advertising). After extensive analysis by our board of directors, its advisory committee, our management and external advisors, including consultation with the relevant governmental authorities in Russia, our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, concluded that, in light of the integrated, stand-alone nature of our business, such separation of our operations in a manner that would ensure compliance with the Mass Media Law would not be commercially feasible.

    Capital reorganization or capital markets transactions.  Our board of directors and its committees, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, also considered the feasibility of:

    o
    a self-tender offer or open market repurchase program to repurchase some or all of our common stock. Our board of directors concluded that the financial resources were not available to us to effect such a transaction at a level of return to our public stockholders equal to or in excess of the value anticipated to be returned in connection with the proposed transactions, particularly in light of the limited availability of debt financing in Russia in the current macroeconomic environment.

    o
    a share exchange, reverse merger or similar transaction, to effectively put in place a Russian-incorporated holding company of our operating group. Our board of directors concluded that such a transaction would not be feasible and, in any event, would not ensure compliance with the ultimate beneficial ownership requirements of the Mass Media Law, without a change in the ultimate beneficial ownership of our group.

    o
    the issuance of a "golden share" in our capital stock to a Russian party, which would entitle such party to exercise effective control over the editorial and broadcasting operations of our business. Our board of directors concluded, after consulting with legal counsel and with the relevant Russian governmental authorities, that such an approach would not ensure compliance with the foreign ownership restrictions of the Mass Media Law, given the very broad definitions of ownership and control under that law.

    o
    the creation of non-voting or differential-voting classes of stock to enable Russian stockholders to exercise effective control over the editorial and broadcasting operations of the business. Our board of directors concluded, after consulting with Russian legal counsel and with the relevant Russian governmental authorities, that such an approach would not ensure compliance with the requirements of the Mass Media Law, given the very broad definitions of ownership and control under that law.

    Sale of discrete assets of the business.  Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, concluded that sales of individual affiliate stations or networks, or other assets of our businesses, would not be feasible in the required timeframe or be likely to produce a meaningful return of value, given the integrated nature of our business and operations.

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        Based on the input from our legal and financial advisors, as well as our communications with the relevant Russian government authorities, our board of directors concluded that none of these alternatives would enable our Company or our group companies to achieve compliance with the Mass Media Law while retaining an integrated, commercially attractive business. Accordingly, our advisory committee and our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, determined that, in the absence of viable alternatives, it could be necessary to seek a sale of our Company or our Russian operations, and therefore pursued a potential sale or divestment transaction, ultimately culminating in the proposed sale.

Initial Activities in Response to the Mass Media Law

        On September 17, 2014, draft legislation was introduced in the Duma to impose more restrictive limitations on non-Russian ownership of registered mass media, including television broadcasters.

        On September 19, 2014, our board of directors met by teleconference, with members of senior management and outside legal counsel participating, to review the proposed Mass Media Law and to begin to consider our potential responses in the event of its adoption.

        On September 23, 2014, the proposed Mass Media Law was considered by the Duma in a first reading.

        On September 23, 2014, following the initial consideration by the Duma, our board of directors met by teleconference, with members of senior management and outside legal counsel participating, to review the status of the proposed Mass Media Law and to review and consider potential alternatives available to our business, including the possibility of undertaking lobbying efforts while the proposed law was under consideration. Our board of directors also determined that it would be advisable to engage external financial advisors to assist in developing proposals for appropriate responses to the Mass Media Law as well as potential corporate reorganization efforts.

        On September 24, 2014, Lorenzo Grabau tendered his resignation from our board of directors, and MTG, pursuant to the stockholders' agreement that was currently in place between our two largest stockholders and our Company, designated Jørgen Madsen Lindemann, who was then a member of our board of directors, to serve as Co-Chairman of our board of directors, and Matthias Hermansson to serve as a new member of our board of directors.

        On September 25, 2014, we issued a press release providing an update on the status of the proposed Mass Media Law, and announcing the election of Mr. Lindemann as Co-Chairman of our board of directors and the appointment of Mr. Hermansson as a director, and the resignation of Lorenzo Grabau.

        On September 26, 2014, the proposed Mass Media Law was considered by the Duma in the required second and third readings.

        On September 29, 2014, our board of directors met by teleconference, with members of senior management and outside legal counsel participating, to review the status of the proposed Mass Media Law and to further consider potential alternatives. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, formed an advisory committee, initially consisting of Mr. Hermansson (as Chairman) and Mr. Morel, to identify and analyze potential responses, and to report regularly to our board of directors. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, also appointed Richards, Layton & Finger, P.A., which we refer to as Richards, Layton & Finger, to serve as special Delaware counsel to our board of directors.

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        On September 29, 2014, we issued a press release providing an update on the status of the proposed Mass Media Law.

        On October 6, 2014, our board of directors met by teleconference, with members of senior management and a representative of Morgan, Lewis & Bockius LLP, which we refer to as Morgan Lewis, our newly appointed outside counsel, participating, to review the status of the proposed Mass Media Law and to further consider potential alternatives. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, also appointed Mr. Klatten to the advisory committee.

        On October 13, 2014, our board of directors met by teleconference, with members of senior management and a representative of Morgan Lewis participating, to review the status of the proposed Mass Media Law and to further consider potential alternatives. The advisory committee reported to our board of directors on its efforts to date, including its discussions with potential financial advisors.

        On October 14, 2014, the Russian President signed the Mass Media Law, and on October 15, 2014 we issued a press release reporting its enactment.

        Following the enactment of the Mass Media Law, our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, and senior management initiated a comprehensive process to identify, review, evaluate and implement steps that would enable our businesses to achieve compliance with the ownership and control requirements of the Mass Media Law while safeguarding the interests of our stockholders.

        On October 16, 2014, Mr. Hermansson, as Chairman of the advisory committee, met with a representative of Morgan Lewis to review potential alternatives.

        On October 20, 2014, our board of directors met by teleconference, with members of senior management and a representative of Morgan Lewis participating, to review and consider next steps, including our Company's lobbying efforts and the engagement of external financial advisors.

        On October 21, 2014, the advisory committee met by teleconference, with a representative of Morgan Lewis participating, to review and consider next steps.

        On October 27, 2014, the advisory committee met in person at the offices of Morgan Lewis in London, with a representative of Morgan Lewis participating, to review and consider potential responses to the Mass Media Law.

        On October 27, 2014, our board of directors met in person at the offices of Morgan Lewis in London, with representatives of Morgan Lewis and Richards, Layton & Finger participating. Our board of directors reviewed potential responses to the Mass Media Law, and considered next steps. A representative of Richards, Layton & Finger summarized for our board of directors the fiduciary duties of the members of our board of directors in the context of the current situation. The advisory committee provided a report to our board of directors on efforts undertaken to date.

        On October 29, 2014, Mr. Lindemann, as Co-Chairman of our board of directors, and Mr. Hermansson, as Chairman of the advisory committee, met by teleconference with a representative of Morgan Lewis to review and consider potential responses to the adoption of the Mass Media Law.

        On October 29, 2014, we announced our financial results for the third quarter of 2014, and provided an update on the adoption of the Mass Media Law and our potential responses in that regard.

        On October 31, 2014, the advisory committee met by teleconference with potential financial advisors, with a representative of Morgan Lewis participating.

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        In November 2014, our board of directors, through its advisory committee, engaged UBS Limited, which we refer to as UBS, as its financial advisor to assist in our response to the Mass Media Law.

        On November 7, 2014, the advisory committee met by teleconference with UBS, with a representative of Morgan Lewis participating, to identify and consider potential responses to the Mass Media Law.

        On November 11, 2014, the advisory committee met by teleconference with UBS, with a representative of Morgan Lewis participating, to identify and consider potential responses to the Mass Media Law.

        On November 13, 2014, members of the advisory committee met by teleconference with UBS, with a representative of Morgan Lewis participating, to identify and consider potential responses to the Mass Media Law. The advisory committee agreed to establish a working group, consisting of members of management and financial, legal, tax and communications advisors, to address our efforts to respond to the Mass Media Law.

        Between November 19, 2014 and December 12, 2014, the working group held weekly update meetings by teleconference to review potential alternatives in response to the Mass Media Law.

        On December 5, 2014, the advisory committee met by teleconference with representatives of UBS, with a representative of Morgan Lewis participating, to review the status of our response to the Mass Media Law and to consider next steps.

        On December 10, 2014, representatives of UBS met by teleconference with members of management and a representative of Morgan Lewis to discuss potential corporate restructuring alternatives.

        On December 12, 2014, representatives of UBS and Morgan Lewis met by teleconference to discuss potential corporate restructuring alternatives.

        On December 12, 2014, the advisory committee met by teleconference with representatives of UBS, with a representative of Morgan Lewis participating, to review the status of our response to the Mass Media Law and to consider next steps.

        On December 17, 2014, our board of directors held a regular meeting in person in Copenhagen. The advisory committee provided a report on the status of our response to the Mass Media Law, and UBS provided a detailed presentation in that regard.

        Between January 13, 2015 and February 3, 2015, the working group held weekly update meetings by teleconference to review potential alternatives in response to the Mass Media Law.

        On January 23, 2015, the advisory committee met by teleconference, with representatives of UBS and Morgan Lewis participating, to review preparations for the launch of a formal sale process.

        On January 27, 2015, our board of directors met by teleconference, with members of management and a representative of Morgan Lewis participating, to review the status of our response to the Mass Media Law and to consider next steps, including the potential launch of a formal sale process.

Initial Sales Efforts

        In early 2015, our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, determined that it was prudent to initiate a formal process to assess the viability of a potential sale transaction, while our board of directors and its advisory committee and advisors continued to seek to identify, evaluate and assess alternative approaches. Accordingly, UBS, as financial advisor to the advisory committee, conducted a formal sale process in February and March 2015, as described below.

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        UBS and our board of directors and advisory committee, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, identified potentially interested parties that met the criteria that our board of directors and advisory committee determined were relevant, namely parties that were Russian, to ensure compliance with the Mass Media Law; that were not targets of U.S. or E.U. economic sanctions; and that would be expected to have the financial resources necessary to consummate a transaction, particularly in light of the challenging macroeconomic circumstances in Russia. UBS then made preliminary contact with a total of 35 parties to obtain preliminary indications of potential interest, as described below.

        On February 5, 2015, UBS, as financial advisor, began distributing a process letter and form of non-disclosure agreement to the 35 parties that had been identified, including an affiliate of UTH, to solicit expressions of interest in respect of a transaction.

        Between February 16, 2015 and March 18, 2015, UBS received signed non-disclosure agreements from a total of 11 parties interested in exploring a potential transaction, including an affiliate of UTH, and on that basis provided initial due diligence information to such parties, and organized management presentations with a total of 7 parties with a view to obtaining expressions of interest in a potential transaction.

        Between February 10, 2015 and February 26, 2015, the working group held weekly update meetings by teleconference to review bidder interest and potential alternatives in response to the Mass Media Law.

        On February 23, 2015, the advisory committee met with representatives of UBS by teleconference, with a representative of Morgan Lewis participating, to discuss potential bidder interest.

        On February 26, 2015, the advisory committee met with representatives of UBS by teleconference, with a representative of Morgan Lewis participating, to discuss potential bidder interest.

        On March 3, 2015, the advisory committee met in person at our representative office in Moscow, with representatives of UBS and Morgan Lewis participating, to review the status of the sale process and to discuss potential bidder interest.

        On March 3, 2015, our board of directors held its regularly scheduled meeting in person at our representative office in Moscow. At this meeting, the advisory committee provided a report on our response to the Mass Media Law, and representatives of UBS provided a presentation outlining recent developments in the formal sale process.

        On March 3, 2015, the Compensation Committee of our board of directors met in person at our representative office in Moscow and considered and preliminarily adopted retention arrangements in respect of our key employees, in light of continuing efforts by competitors to solicit key members of our staff, reflecting the uncertainty regarding the outcome of our response to the Mass Media Law, as described in the section headed "Proposal 3—Advisory Vote on Management Retention Compensation—Management Retention and Incentive Arrangements."

        On March 5, 2015, we announced our financial results for 2014, and provided an update on the status of our response to the Mass Media Law.

        On March 5, 2015, we issued a press release announcing the appointment of Natasha Tsukanova as director and Co-Chairman of our board of directors, and of Kaj Gradevik as a director, and the resignations of Jørgen Madsen Lindemann and Matthias Hermansson.

        Between March 10, 2015 and March 31, 2015, the working group held weekly update meetings by teleconference to review bidder interest and potential alternatives in response to the Mass Media Law.

        In the process letter distributed to potentially interested parties, UBS set a deadline of March 13, 2015 for preliminary expressions of interest. Two parties requested extensions, to March 20 and

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March 27, 2015, respectively, which were granted. No expressions of interest were received by either the original or the extended deadlines.

        On March 17, 2015, the working group held a weekly update meeting by teleconference to review bidder interest and potential alternatives in response to the Mass Media Law.

        On March 30, 2015, the advisory committee met in person in London. Representatives of UBS attended and provided an update on the formal sale process and potential alternative responses to the Mass Media Law.

        On April 13, 2015, Ms. Tsukanova and Mr. Gradevik met by teleconference, with a representative of Morgan Lewis participating, to review the outcome of the formal sale process and to consider next steps.

        On April 23, 2015, the advisory committee met by teleconference, with representatives of UBS and Morgan Lewis participating, to review the outcome of the formal sale process and to consider next steps.

        On April 28, 2015, the advisory committee met in person in London, with a representative of Morgan Lewis participating, to review the outcome of the UBS process and of discussions with potential bidders, as well as to consider the viability of alternatives to a sale or divestiture transaction.

        On April 28, 2015, the Compensation Committee met in person in London, with a representative of Morgan Lewis participating, to formally approve the terms of retention arrangements in light of continuing efforts by competitors to solicit key members of our staff, reflecting the uncertainty regarding the outcome of our response to the Mass Media Law, as described in the section headed "Proposal 3—Advisory Vote on Management Retention Compensation—Management Retention and Incentive Arrangements."

        On April 28, 2015, our board of directors held its regularly scheduled meeting in person in London, with a representative of Morgan Lewis participating. Representatives of UBS attended a portion of the meeting, and provided a detailed report on the sale process undertaken. The UBS representatives confirmed that they had received full cooperation from our board of directors and members of management in connection with the process, that they had contacted the parties that UBS and the advisory committee deemed reasonably likely to be interested in making an offer, and who would be expected to meet the criteria for compliance with the Mass Media Law, compliance with applicable international sanctions and availability of financial resources. They confirmed that a total of 35 parties had been contacted, they had held meetings with 7 parties, including an affiliate of UTH, they had sent out forms of non-disclosure agreements to 19 parties, they had received signed non-disclosure agreements from 11 parties, and had sent out "phase 1" process letters to these 11 parties, inviting indications of interest by March 13, 2015. Two parties requested extensions of this deadline, to March 20 and March 27, respectively, which were granted. The UBS representatives confirmed that they had followed up with potential bidders and that no indications of interest had been received by the initial or the extended deadline. They further noted that there had been extensive speculation in the press regarding a potential sale, which in their view would have alerted other potential buyers to the opportunity, and that therefore they did not believe that there were any likely bidders that had not be contacted in the process. Following its delivery of the final report to our board of directors regarding the sale process, we ended the monthly retainer arrangement with UBS at the end of April 2015.

        On April 30, we announced our financial results for the first quarter of 2015, and provided an update on the status of our response to the Mass Media Law.

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Initial Discussions with UTH

        Following the expiration of the extended deadline for the submission of offers in the UBS process on March 27, 2015, the advisory committee commenced efforts to engage in one-on-one discussions with a limited number of parties identified by the advisory committee. Ultimately, representatives of the advisory committee and management had substantive discussions with three parties, including UTH. Two of those parties ultimately informed the advisory committee that they were not prepared to proceed with an offer.

        On April 10, 2015, Ms. Tsukanova, Ms. Gofman, one of our directors, and Ms. Slashcheva, our CEO, met informally with Ivan Tavrin, the chairman of the board of directors of UTH, to discuss potential interest on the part of UTH in pursuing a transaction.

        On April 20, 2015, Ms. Tsukanova and Ms. Slashcheva, on behalf of our board of directors, received a preliminary, non-binding expression of interest from Media-One Holdings Limited, an affiliate of UTH, expressing interest in potentially acquiring a 75% interest in our operating businesses in Russia and Kazakhstan. Such expression of interest did not provide any details regarding the potential offer, other than to state that the affiliate of UTH anticipated that any offer would likely represent a "discount" to our then-current market capitalization. The closing price of our common stock on Nasdaq on April 21, 2015 was $4.38 per share. Although the advisory committee did not believe that the financial terms of such preliminary expression of interest represented were acceptable, the advisory committee believed it was prudent to engage with the affiliate of UTH to see if it would be possible to reach acceptable terms. Members of the advisory committee therefore had extensive discussions with UTH over the following two months to seek to reach agreement on the outline of a transaction that might be acceptable to our board of directors, as described below.

        The advisory committee explored with UTH the possibility of structuring any transaction as a merger or acquisition of our Company or a tender offer for our common stock (subject to compliance with applicable sanctions). In light of the Russian law requirement that the operating business be at least 80% held by Russians by the stated deadline, as well as the complexities presented by the status of 25% of our outstanding shares of common stock as blocked property pursuant to applicable sanctions, UTH was not prepared to entertain a structure that would entail UTH acquiring our Delaware company or an interest in our Company.

        On April 23, 2015, the advisory committee met by teleconference to review the status of discussions with potential bidders, including the preliminary expression of interest from Media-One/UTH. Also on that date, we sent a letter to Media-One/UTH responding to its preliminary expression of interest. In that letter, we expressed our view that that the preliminary indication of valuation set out in its preliminary expression of interest required further discussion. In addition, in light of the lack of success in the recently completed auction process, we confirmed to Media-One/UTH that we would not actively "shop" our business for a period of three months in order to seek to reach agreement with Media-One/UTH on a potential offer.

        On May 5, 2015, the advisory committee met by teleconference, with a representative of Morgan Lewis participating, to review the status of discussions.

        On May 21, 2015, Ms. Tsukanova, on behalf of the advisory committee, met by teleconference with representatives of UTH to discuss the terms of a potential offer.

        On June 5, 2015, Ms. Tsukanova, on behalf of the advisory committee, met with representatives of UTH to discuss further the terms of a potential offer. At that meeting, the parties further discussed the financial parameters of a potential transaction. The representatives of UTH confirmed that UTH would be interested in acquiring a 75% interest in our operating businesses in Russia and Kazakhstan. They further indicated that they were prepared to pay up to a headline purchase price of $285 million, consisting of $100 million in cash and a note with a face amount of $100 million, bearing aggregate interest over its term of $85 million.

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        On June 8, 2015, Ms. Tsukanova, on behalf of the advisory committee, and a representative of Morgan Lewis met by teleconference with representatives of MTG, our largest stockholder. On this call, Ms. Tsukanova outlined the terms of the potential indication of interest from Media-One/UTH.

        On June 18, 2015, Ms. Tsukanova, on behalf of our board of directors, received a further nonbinding indication of interest from UTH, setting forth a brief summary of the proposed financial terms of a transaction.

        On June 19, 2015, our board of directors met by teleconference, with a representative of Morgan Lewis participating. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, considered the indication of interest received from UTH, and concluded that such expression of interest appeared to be genuine and worth exploring, in light of the failure of the auction process, the lack of alternative offers and the limited time remaining until the Mass Media Law was to become effective. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, instructed the advisory committee to review and seek to clarify the terms of the expression of interest to determine if a formal offer could be obtained.

        On June 19, 2015, following the meeting of our board of directors, the advisory committee met by teleconference, with a representative of Morgan Lewis participating, to review the terms of the expression of interest from UTH and to consider next steps.

        On June 23, 2015, a member of the advisory committee, together with a representative of Morgan Lewis, met by teleconference with representatives of MTG, our largest stockholder, to discuss the terms of the potential offer from UTH and MTG's potential support of such offer.

        On June 24, 2015, the advisory committee met by teleconference, with a representative of Morgan Lewis participating, to review the UTH expression of interest.

        On June 30, 2015, the advisory committee met by teleconference, with Mr. Basunia joining as an observer and a representative of Morgan Lewis participating, to review the UTH expression of interest.

        On July 2, 2015, Ms. Tsukanova, on behalf of the advisory committee, and Mr. Basunia, on behalf of the independent directors, with a representative of Morgan Lewis participating, met with representatives of UTH and representatives of MTG to determine whether acceptable terms could be agreed.

Offer from UTH and Subsequent Negotiations of the Sale Agreement

        On July 3, 2015, our board of directors received a formal offer letter from UTH outlining the terms of a proposed transaction. The offer proposed headline consideration of $200 million in cash for the purchase of 75% of the participation interests in CTC Investments. The offer stated that it was based on the assumption that the target group would have no debt or cash (except required working capital adequate for the ongoing operation of the business). The offer was further made on the basis that we would grant UTH a three-month period of exclusivity.

        On July 4, 2015, we received a letter from MTG AB, the parent company of MTG, our largest stockholder, stating that MTG was prepared to support our further exploration of the UTH offer and that it expected to support a binding agreement on the terms set out in the UTH offer, on the assumption that both the sale and the merger would be proposed on the terms anticipated.

        On July 4, 2015, our board of directors met by teleconference, with a representative of Morgan Lewis participating, to review and consider the terms of the proposed July 3 offer. At this meeting our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, formed the special committee, consisting of Mr. Klatten (Chairman), Mr. Basunia and Mr. Morel, to exercise the authority

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of our board of directors in reviewing, evaluating and negotiating the terms of a final offer and related definitive documentation, or an alternative transaction. The special committee led the subsequent negotiations with UTH and met regularly to consider the terms of the transaction.

        On July 4, 2015, the special committee met by teleconference, with a representative of Morgan Lewis participating, to review and consider the terms of the proposed UTH offer. The special committee determined to pursue the offer, and agreed to grant the offeror a period of exclusivity to negotiate definitive documentation in that regard, with the period and terms to be agreed.

        On July 6, 2015, we issued a press release announcing the receipt of an offer from UTH and that our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, was seeking to reach agreement on the definitive terms of a potential transaction.

        Between July 10, 2015 and October 20, 2015 the special committee met at least weekly by teleconference, with Ms. Tsukanova attending as a guest and a representative of Morgan Lewis participating, to review and supervise the negotiations and to provide instructions on the substantive terms that would be acceptable.

        On July 17, 2015, we agreed with UTH that, until September 30, 2015 (subject to specified exceptions) we would not:

    initiate, solicit or seek any inquiries or the making or implementation of any proposal or offer with respect to an acquisition of our business, whether by merger, acquisition of stock, participation interests or assets, or otherwise;

    engage in any negotiations with, or provide any confidential information or data to, any person relating to such a proposal; or

    enter into or consummate any agreement or understanding with any person relating to such a proposal.

        On July 28, 2015, the special committee met in person to discuss the status of negotiations with UTH. On this date, the special committee also formally engaged Xenon Capital Partners, which we refer to as Xenon, a financial advisory firm located in Moscow, as its financial advisors to assist the special committee in reviewing, analyzing and executing the proposed sale and merger transactions. Ms. Tsukanova, the Co-Chairman of our board of directors, who was originally designated to serve on our board of directors by MTG pursuant to the stockholders' agreement that was then in place between our two largest stockholders and our Company, is a founder and managing director of Xenon. Our special committee carefully considered the potential conflict of interest presented by Ms. Tsukanova's relationship with Xenon, and concluded that Xenon was the best qualified financial advisory firm that was available to assist the special committee in connection with the proposed transactions. The special committee concluded that Xenon's familiarity with our Company, through Ms. Tsukanova's role on our board of directors, together with its familiarity with the Russian business environment, best positioned Xenon to provide effective support to the special committee in this regard.

        On July 28, 2015, our board of directors met in person at our representative office in Moscow for its regular meeting, at which the special committee provided an update on the negotiations with UTH.

        On July 28, 2015, the special committee received the first draft of the sale agreement from UTH's legal counsel, Cleary Gottlieb Steen & Hamilton LLC, which we refer to as Cleary Gottlieb. The draft was then discussed in detail with Morgan Lewis and Ms. Tsukanova, with a focus on provisions related to the working capital requirements of the business, the performance of the business in 2015, and the apparently continuing deterioration in the Russian economy, as well as the scope of our rights to terminate the agreement consistent with the fiduciary obligations of our board of directors.

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        On July 31, 2015, at the direction of the special committee, Morgan Lewis and Ms. Tsukanova met with Cleary Gottlieb to discuss key issues with the draft sale agreement, including the scope and survival of warranties, ongoing investments in programming, potential price adjustments and working capital requirements, as well as the scope of our rights to terminate the agreement consistent with the fiduciary obligations of our board of directors.

        On August 5, 2015, Morgan Lewis sent a revised draft of the sale agreement to Cleary Gottlieb. On August, 10, 2015, members of our management, Morgan Lewis and Ms. Tsukanova, Xenon, UTH, UTH's accounting and tax advisers, PricewaterhouseCoopers, and Cleary Gottlieb attended a conference call to discuss, among other things, the status of due diligence, the analysis of the business's working capital requirements, the distribution of cash from our operating group to our Company, the buyer's view regarding the level of cash that would be needed to be retained to fund the anticipated operating losses and working capital of the group, and regulatory matters.

        On August 13, 2015, the special committee received a revised draft of the sale agreement from Cleary Gottlieb, which identified UTV-Management LLC, a subsidiary of UTH, as the purchaser.

        On August 17, 2015, the special committee met with Morgan Lewis, Ms. Tsukanova and representatives of Xenon to discuss outstanding issues presented by the draft sale agreement, including indemnities that had been requested by UTH, the scope and survival of warranties, disclosure against such warranties, proposed adjustments to the purchase price, limitations on the operations of our business in the period to closing, the distribution of cash from the operating businesses to our parent company, and the proposed termination fees.

        In the afternoon of August 17, 2015, at the direction of the special committee, Morgan Lewis and Cleary Gottlieb met by teleconference to discuss the draft sale agreement. There were further discussions between the parties on August 18, 2015, specifically in relation to the amount of cash required to fund the business's working capital requirements, the proposed budget to be agreed in relation to programming expenditure from signing to December 31, 2015, limitations on the operations of our business in the period to closing and the appropriate mechanism to ensure that our operations complied with the 20% Russian ownership limit under the Mass Media Law.

        There were numerous discussions and calls, under the direction of the special committee, between our management, Morgan Lewis, Ms. Tsukanova, representatives of Xenon and Cleary Gottlieb from August 18, 2015 to August 27, 2015, culminating in Morgan Lewis sending to Cleary Gottlieb discussion papers on the proposed purchase price adjustments, working capital requirements and the distribution of cash from the operating businesses to our parent company. On August 28, 2015, there were various conference calls to discuss these issues, including between Ms. Tsukanova and representatives of UTH.

        On September 10, 2015, at the direction of the special committee, Morgan Lewis sent a revised draft of the sale agreement to Cleary Gottlieb, which reflected the outcome of discussions regarding the key topics. This was followed by a conference call on September 11, 2015, between Morgan Lewis, Ms. Tsukanova, a representative of our management, a representative of Xenon, a representative of UTH and Cleary Gottlieb to discuss the September 10, 2015 draft of the sale agreement.

        On September 11, 2015, the special committee received a revised draft of the sale agreement from Cleary Gottlieb, which was then discussed with Morgan Lewis and Ms. Tsukanova. Following such discussion, on September 12, 2015, Morgan Lewis sent a revised draft of the sale agreement to Cleary Gottlieb.

Approval and Recommendation of the Sale

        On September 15, 2015, the special committee received a revised draft of the sale agreement from Cleary Gottlieb. On the same day, the special committee met, with Ms. Tsukanova and a representative of Morgan Lewis participating. The special committee reviewed in detail the terms of the sale agreement, and further reviewed the steps taken by our board of directors, the advisory committee, the

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special committee and management to date in response to the Mass Media Law. Xenon and Morgan Lewis provided a detailed presentation to the special committee regarding the background to and terms of the transaction and answered questions from the special committee. The special committee then approved the sale and the sale agreement and recommended them to our board of directors for approval, subject to a final meeting between the special committee and a representative of UTH. Morgan Lewis sent a revised draft of the sale agreement to Cleary Gottlieb on September 17, 2015.

        On September 16, 2015, our board of directors met by teleconference to review the status of negotiations with UTH, and the special committee provided a report in that regard and addressed the questions of the other members of our board of directors. Xenon and Morgan Lewis provided a detailed presentation to our board of directors regarding the background to and terms of the transaction and answered questions from our board of directors.

        On September 21, 2015, the special committee, with Ms. Tsukanova and Morgan Lewis participating, met in person with a representative of UTH. At this meeting, the special committee reviewed the terms of the transaction with UTH and confirmed that the sale agreement represented UTH's final position with respect to the commercial terms of the transaction.

        On September 22, 2015, the special committee received a revised draft of the sale agreement from Cleary Gottlieb which was discussed with Morgan Lewis and Ms. Tsukanova and then Cleary Gottlieb. On September, 23, 2015, the special committee received the final draft of the sale agreement from Cleary Gottlieb.

        On September 23, 2015, MTG confirmed to the special committee that it remained supportive of the proposed sale and merger.

        On September 24, 2015, our board of directors met in person, with a representative of Morgan Lewis participating, to further review and consider the proposed transaction, the definitive documentation and the special committee's recommendation. The special committee confirmed its approval and recommendation of the transaction and the sale agreement and recommended to the full board of directors that such transaction and documentation be approved. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, approved such transaction and documentation, and resolved to recommend such transaction and documentation to our stockholders for approval.

        On September 24, 2015, we and UTV-Management executed the sale agreement.

Approval and Recommendation of the Merger

        On September 25, 2015, Telcrest notified us that as a result of two transactions with third parties relating to its share capital, that it is no longer 50% or more owned, directly or indirectly, in the aggregate by one or more SDNs, including Bank Rossiya.

        On October 7, 2015, the special committee amended the financial terms of its engagement agreement with Xenon in light of the increased complexity and longer timeframe of the proposed transactions and the unanticipated scope of the related workload of Xenon.

        On October 7, 2015, our board of directors met informally by teleconference to review and consider the detailed terms of the merger, to be effected following the sale. Xenon and Morgan Lewis provided a detailed presentation to our board of directors in that regard and answered questions from our board of directors.

        Between October 12 and October 16, 2015, the special committee met four times by teleconference to consider the status of Telcrest in light of the notification provided to our Company on September 25, 2015 and its potential implications for the proposed transactions.

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        On October 20, 2015, the special committee met by teleconference and approved and recommended the final terms of the proposed merger and the merger agreement to the full board of directors. In addition, the special committee reaffirmed its recommendation with respect to the sale agreement in light of the updated presentation by Xenon.

        On October 21, 2015, our board of directors met by teleconference to review the final terms of the proposed merger. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, approved such transaction and the merger agreement, and resolved to recommend such transaction and merger agreement to our stockholders for approval.

Alternatives to the Merger

        Our special committee and our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, considered various alternatives to be pursued following the consummation of the sale, including the following:

    Continuing our business.  Following the closing of the sale, our business would initially consist of a minority interest in our current operating businesses in Russia and Kazakhstan, together with up to approximately $255 million in cash, representing the net consideration plus the anticipated available cash on hand. Our special committee and our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, concluded that, in light of the historical focus of the operating business since inception on Russia, and the fact that the management team would remain with the operating business in Russia following the sale, the continuation of the business to pursue opportunities in other markets, or to invest available cash, would be unlikely to maximize value for stockholders.

    Liquidating and winding up the Company.  Our special committee and our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, concluded that a liquidation was not feasible, given that Computershare has identified the shares of our common stock held by Telcrest as blocked property pursuant to U.S. economic sanctions, and the fact that a distribution of our continuing minority interest in CTC Investments to our stockholders would not be practicable.

    Distributing all available cash to stockholders by way of a dividend.  Our special committee and our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, concluded that, given the fact that it would not be feasible to distribute our continuing minority interest in CTC Investments to stockholders on a pro rata basis, a dividend of the available cash on a pro rata basis to all stockholders, including Telcrest, would not maximize value for our public stockholders.

Reasons for the Transactions; Recommendation of the Special Committee and Board of Directors; Fairness of the Transactions

Reasons for the Transactions

        In the course of reaching their determinations described below, the special committee and our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, considered the following factors, which is not meant to be an exhaustive list of the factors considered, and potential benefits of the sale and the merger, each of which the members of the special committee and board of directors,

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except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, believed supported their decision:

    The pending effectiveness of the foreign ownership limitations of the Mass Media Law and the implications of non-compliance with such requirements by January 1, 2016, which in the view of the members of the special committee and the board of directors could result in a material decrease in the value of the business in the hands of the Company and its non-Russian stockholders.

    Third-party analyst reports as to the "liquidation value" of the Company of $1.22 per share, significantly below the minimum merger consideration, and "M&A (going concern) value" of the Company of $2.20 per share, slightly above the maximum merger consideration, as described below, and the board of directors' view that the ability of our Company's operating businesses to continue as a going concern was dependent upon its compliance with the Mass Media Law by the stated deadline.

    The comprehensive efforts undertaken by the board of directors, its committees, our management and third-party financial advisors over a period of more than 12 months to identify and evaluate potential alternatives to a sale or divestiture transaction.

    The extensive process undertaken by our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, and its committees to identify a potential buyer, including a comprehensive auction process undertaken by UBS, continued efforts to identify and engage with other potential buyers, and extensive coverage in the Russian and international press regarding our board of directors' interest in a sale transaction.

    The fact that the pool of potential purchasers would be limited to Russian entities and individuals, to ensure ultimate compliance with the Mass Media Law.

    The limited number of eligible Russian parties that would have the financial resources to complete a transaction, particularly in light of the challenging economic conditions in Russia, including the limited availability of debt financing.

    The lack of any firm offers of which our Company or the board of directors or special committee was aware made by any unaffiliated person, other than UTV-Management, during the past two years to acquire our Company through a merger, consolidation, acquisition of a majority of the outstanding equity securities, acquisition of all or substantially all of the assets or any similar transaction.

    The fact that we and our board of directors could not undertake any transaction or have any dealings with any parties that had been named as "specially designated nationals" under the U.S. economic sanctions regime or that were otherwise the target of U.S. or E.U. sanctions.

    The challenges in structuring a transaction that were presented by the identification of our shares held by Telcrest as blocked property pursuant to applicable U.S. economic sanctions, and the need to structure a transaction that allowed us to return the maximum possible value to our other stockholders while retaining sufficient reserves for the orderly liquidation of our Company following the merger, and complying with such sanctions.

    The goal of returning value in cash to our other stockholders.

    The belief that it would not be desirable for our public stockholders to continue to hold an indirect minority interest in our Russian subsidiary following the sale, given the limited protections available to minority stockholders in Russia, and that the costs associated with remaining a publicly traded company in such circumstances would not be warranted.

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    The belief that, if the special committee or our board of directors declined to approve the sale agreement and the merger agreement, there would not be another opportunity for our stockholders to receive a comparable price in another transaction, given the pending effectiveness of the Mass Media Law.

    The historical trading prices of our common stock and decline in the trading price of our common stock since the first public disclosure of the consideration of the Mass Media Law by the Russian Duma in the second half of September 2014, including to an all-time low of $1.67 on September 2, 2015, which was significantly below the minimum merger consideration, and its significant underperformance relative to the market and our Company's peers during this time.

    The belief that our net book value was not a relevant factor because net book value is an indicator of historical cost, less impairment charges, and does not take into account our prospects, market conditions and trends in the industries in which we operate or the business risks inherent in those industries and other pertinent factors, including those caused by the pending effectiveness of the Mass Media Law, which ultimately affect current quotations of shares of our common stock.

    The financial presentations of Xenon as to whether the proposed consideration to be received by the Company for the sale of a 75% participation interest in CTC Investments and the proposed merger consideration (as estimated by Xenon on the basis of the proposed terms of the merger as of the time of such presentations) to be received by the holders of the Company's common stock in the merger, are within a range of reasonableness and whether the proposed transaction is fair to our unaffiliated stockholders.

    The macroeconomic environment in Russia and Kazakhstan, the group's operating markets, including the substantial contraction of GDP in Russia in 2015, the decrease in advertising budgets in Russia, the substantial depreciation of the Russian ruble and the Kazakh tenge, and the continuing uncertainty with respect to geopolitical and macroeconomic conditions.

    The operating performance of our business, which has been negatively affected by significant declines in audience share in recent periods, as well as decreases in revenue and operating margin as a result of the broader macroeconomic environment.

    The publicly available information on transactions undertaken by other international media companies that have been necessitated by the Mass Media Law, including those announced by Discovery Communications on August 27, 2015 and by Axel Springer on September 17, 2015.

The special committee did not obtain an opinion from an independent financial advisor regarding the fairness, from a financial point of view, of the cash consideration to be paid to our unaffiliated stockholders. Our board of directors and special committee, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, considered the feasibility and value of obtaining such a fairness opinion in light of the following:

    Our board of directors (except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy) and its advisory and special committees approached several major international investment banks that declined to advise us or our board of directors or its committees due to concerns regarding their compliance obligations in light of the then-status of Telcrest as a deemed SDN pursuant to applicable U.S. economic sanctions.

    The high cost of such an opinion from the small number of international banks that were prepared to undertake efforts to deliver such an opinion, in light of the desire of our board of directors and its committees to return the maximum possible amount of cash to stockholders (other than Telcrest).

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    The fact that, in the view of our board of directors and its committees (except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy), any opinion based on the intrinsic value of our operating business would be of limited value, as normal valuation methodologies would not give effect to the consequences of potential non-compliance with the requirements of the Mass Media Law by January 1, 2016.

    The view of our board of directors (except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy) and the special committee that the appropriate valuation benchmark would be the value of the business in the hands of CTC Media and its current stockholders as of January 1, 2016, at which point our board of directors and the special committee believe that substantially all value of the operating business could be lost in the absence of a transaction that results in compliance with the Mass Media Law.

    The review of our board of directors' (except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy) and the special committee of independent, third-party market analyst reports, which reported the views of such analysts as to the "liquidation value" of our Company in the event of non-compliance with the requirements of the Mass Media Law by the stated deadline, including:

    o
    A report by Raiffeisen Research dated September 18, 2015, indicating a liquidation value of $1.22.

    o
    A report by Goldman Sachs dated July 15, 2015, indicating a valuation of $2.20 per share, based on both an "M&A value" of $2.20, and a price/earnings value of $2.20 per share, reflecting a "20% discount to reflect risk of license withdrawal from 2016."

        The foregoing discussion of the information and factors considered and given weight by the special committee and our board of directors is not intended to be exhaustive, but includes the factors considered by the special committee and our board of directors that each member of the special committee and our board of directors believes to be material regarding the fairness of the sale and the merger for the purpose of complying with the requirements of Rule 13e-3 and the related rules under the Exchange Act. Although the special committee and our board of directors believes that the implications of the pending effectiveness of the Mass Media Law and lack of viable alternatives were the most important factors in making their determinations, they did not find it practicable to, and did not, quantify or otherwise attach relative weights to the foregoing factors in reaching their position as to the fairness of the sale and the merger to our Company and our stockholders, including our unaffiliated stockholders, but made their fairness determination after considering all of the factors as a whole. In addition, individual members of the special committee may have assigned different weights to various factors.

        In addition to taking into account the foregoing factors, the special committee and our board of directors (except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy), also considered the following risks and other countervailing factors, which is not meant to be an exhaustive list of the risks and factors considered, related to entering into the sale agreement and the merger agreement and the transactions contemplated by the sale agreement and the merger agreement at this time, including:

    the understanding that, although the transactions contemplated by the sale agreement and the merger agreement are expected to be completed, there can be no assurance that the transactions will be consummated in a timely manner or that all conditions to the parties' obligations to complete the transactions will be satisfied and, as a result, it is possible that the transactions may not be completed as described under "The Sale Agreement—Conditions to the Sale" beginning

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      on page 87 of this proxy statement and "The Merger Agreement—Conditions to the Merger" beginning on page 93 of this proxy statement;

    the understanding that the merger will be viewed by OFAC as a transaction relating to the property that is blocked pursuant to applicable sanctions, and that will therefore require a license from OFAC, which may not be issued;

    that our stockholders other than Telcrest, including MTG, will be receiving consideration different from that which will be retained by Telcrest in the merger, which consideration may ultimately be of higher or lower value than the consideration received by Telcrest, and that such differential treatment could give rise to claims by stockholders, including Telcrest, against our Company;

    that, under the terms of the sale agreement, we would be required to pay a termination fee if we were to terminate the sale agreement to accept a superior proposal for a business combination with or acquisition of our Company or our operating businesses and that our obligation to pay the termination fee might discourage other parties from proposing any such transaction, as described under "The Sale Agreement—Termination Fees";

    that the per share merger consideration will be at least $1.77 per share, which reflects the maximum potential reduction in the purchase price pursuant to the terms of the sale agreement; the actual merger consideration will be based upon the amount of our cash available as of the effectiveness of the merger, which is dependent upon, among other things, our operating performance in the remainder of 2015 and the anticipated cash reserves that will be appropriate in light of potential liabilities at the time of closing; and

    that our executive officers and directors have certain interests in the sale and merger that may be different from other stockholders that may have influenced them to approve the sale agreement, sale, merger agreement and merger and to recommend the adoption of the sale agreement and the merger agreement.

        After considering these factors, the special committee and our board of directors concluded that the positive factors relating to the sale and the merger significantly outweighed the potential negative factors.

Fairness of the Merger

        In the course of making the determinations described above, the special committee and our board of directors (except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy), also considered the following procedural safeguards involved in the negotiation of the merger agreement (all of which factors tended to support the recommendation and consummation of such agreement and transaction, but which factors are not intended to be exhaustive and are not presented in any relative order of importance):

    that the consideration and negotiation of the merger agreement was conducted under the oversight of the special committee, which is comprised solely of independent and disinterested members of our board of directors who are not employees of the Company or otherwise affiliated with the Company (other than as directors) and who have no personal or financial interests in the completion of the merger, supported the special committee's recommendation and the recommendation and fairness determination of our board of directors;

    although we and the special committee did not retain any unaffiliated representative to act solely on behalf of the unaffiliated stockholders for purposes of negotiating a transaction or preparing a report, the absence of which was not a factor in the special committee's recommendation or the recommendation or fairness determination of our board of directors, the fact that the special committee was advised by Xenon, as its financial advisor, and by Morgan Lewis, as the legal

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      advisor to our Company, and because the terms of the merger treat the unaffiliated stockholders and MTG, our largest stockholder, equally, supported the special committee's recommendation and the recommendation and fairness determination of our board of directors;

    that, from the special committee's formation on July 4, 2015 through its recommendation of the merger agreement to our board of directors on October 20, 2015, the special committee held approximately 20 formal meetings, including by teleconference, and was involved in extensive discussions and deliberations prior to our execution of the merger agreement, supported the special committee's recommendation and the recommendation and fairness determination of our board of directors;

    that the members of our board of directors who participated in the decision and unanimously agreed to such determinations constituted a majority of the directors who are not employees of our Company, which supported the special committee's recommendation and the recommendation and fairness determination of our board directors; and

    although the shares of common stock held by Telcrest may not be voted for so long as they are "blocked property" pursuant to applicable U.S. economic sanctions and approval of a majority of shares held by the unaffiliated stockholders is not required, the absence of which was not a factor in the special committee's recommendation or the recommendation or fairness determination of our board of directors, the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon (which outstanding shares include those held by Telcrest) will be required to approve the merger agreement, unless our board determines at or prior to our special meeting of the stockholders that the shares of common stock held by Telcrest have remained beneficially owned by Telcrest and that such shares are not blocked property pursuant to such sanctions, in which case the approval of both (a) Telcrest and (b) at least a majority of the holders of the outstanding shares of our common stock that are not beneficially owned by Telcrest will be required to approve the merger agreement.

Special Committee

        The special committee, consisting solely of non-employee independent directors not originally designated by either MTG or Telcrest, and acting with the advice and assistance of its financial advisors and the Company's legal advisor, evaluated and negotiated the acquisition proposal by UTH, including the terms and conditions of the sale agreement, and separately evaluated and agreed upon the terms of the merger agreement. In light of the totality of the circumstances and the absence of viable alternatives to ensure compliance with the Mass Media Law by the deadline of January 1, 2016, the special committee determined that the sale and the sale agreement are expedient and for the best interests of, and fair to, the Company and its stockholders, determined that the merger agreement is advisable and in the best interests of, and fair to, the Company and its stockholders, approved and declared it advisable to enter into the sale agreement and the merger agreement and unanimously recommended that our board of directors: (i) determine that the sale and the sale agreement are expedient and for the best interests of, and fair to, the Company and its stockholders, (ii) determine that the merger agreement is advisable and in best interests of, and fair to, the Company and its stockholders; and (iii) recommend that the stockholders of the Company approve sale and adopt the merger agreement.

        The special committee determined that the sale reflects the best possible terms that can be obtained in the extraordinary external circumstances we face. Assuming no change in Russian law, failure to consummate the sale in the absence of any viable alternatives would be likely to result in our operating businesses failing to comply with the foreign ownership and control limitations of the Mass Media Law as of January 1, 2016. The special committee believes that such an outcome would likely destroy substantially all remaining value for our stockholders. The special committee believes that the

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sale enables us to extract significant value from the group's operating businesses, and that the merger allows us to then return such value to our stockholders.

Board of Directors

        Our board of directors (except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy):

    determined that the sale, the sale agreement and the other transactions contemplated by the sale agreement are expedient and for the best interests of, and fair to, our Company, and its stockholders, including the unaffiliated stockholders, and declared it advisable to enter into the sale agreement;

    determined that the merger, the merger agreement and the other transactions contemplated by the merger agreement are expedient and for the best interests of, and fair to, our Company and its stockholders, including the unaffiliated stockholders, and declared it advisable to enter into the merger agreement;

    approved the execution and delivery of the sale agreement and, subject to the approval of our stockholders, the performance by our Company of its covenants and agreements contained in the sale agreement and the consummation of the transactions contemplated thereby, including the sale, upon the terms and subject to the conditions contained in the sale agreement; and

    approved the execution and delivery of the merger agreement and, subject to the approval of our stockholders, the performance by our Company of its covenants and agreements contained in the merger agreement and the consummation of the transactions contemplated thereby, including the merger, upon the terms and subject to the conditions in the merger agreement; and

    recommended that our stockholders approve the sale and adopt the merger agreement, and directed that such matters be submitted for consideration of our stockholders at the special meeting.

        In reaching these determinations, our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, considered: (i) a variety of business, financial and market factors, including in particular the pending effectiveness of the Mass Media Law; (ii) the financial presentations of Xenon to the special committee dated September 15, 2015, to our board of directors dated September 24, 2015, and to the special committee and our board of directors dated October 20, 2015; (iii) each of the positive and negative factors considered by the special committee in its unanimous recommendation, as described above; and (iv) the unanimous recommendation of the special committee. Such determinations were made despite the absence of certain procedural safeguards described above, including the absence of an unaffiliated representative acting on behalf of the unaffiliated stockholders and the absence of a requirement that the transaction be approved by a majority of shares held by the unaffiliated stockholders.

Reasons of the Company for the Transactions; The Company's Determination of the Fairness of the Transactions

        The Company has determined to enter into the transactions based on the analyses, determinations and conclusions of the special committee and the board of directors described in detail above under "—Reasons for the Transactions; Recommendations of the Special Committee and Board of Directors; Fairness of the Transactions" beginning on page 39, which the Company has adopted. In connection with such determination, the Company has determined that the transactions are for the best interests of, and fair to, our Company and its stockholders, including the unaffiliated stockholders, for the reasons described in such subsection.

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Analysis of Financial Advisor of the Special Committee—Xenon Capital Partners

        Xenon delivered to the special committee a letter, dated September 15, 2015, which was updated and confirmed by a further letter dated October 20, 2015, both to the effect that the sale reflects the best possible terms that can be obtained in the extraordinary external circumstances faced by our Company and that the proposed consideration to be received by us for the sale of 75% of the participation interests in CTC Investments and the proposed merger consideration (as estimated by Xenon on the basis of the proposed terms of the merger as of the time of its letters) to the stockholders (other than Telcrest) in the merger, are within a range of reasonableness and that the proposed transactions are fair to the unaffiliated stockholders. Xenon noted that, if the ownership structure of the Company's Russian business does not comply with the Mass Media Law by January 1, 2016, the value of the business in the hands of the Company and its foreign stockholders would be expected to decrease materially.

        The full text of Xenon's letters to the special committee, which describe the assumptions made and the matters considered by Xenon in evaluating the sale and the merger, are attached as Annex D. Xenon provided its analysis to the special committee for the information and assistance of the special committee in connection with, and for purposes of, the special committee's evaluation of the sale and the merger. Xenon's analysis does not constitute a recommendation to any stockholder as to any action in connection with the sale, the merger or any other matter.

        In connection with delivering the letters described above and performing its related financial analyses, Xenon:

    reviewed the provisions of the Mass Media Law and its implications for our Company;

    reviewed certain publicly available business and financial information relating to us that Xenon deemed relevant;

    reviewed certain information, including financial projections, which are referred to in this section of the proxy statement as the "forecasts", and other financial and operating data concerning our Company, prepared by our management;

    discussed our past and current business, operations, financial condition and prospects with members of our senior management;

    reviewed the trading history for our common stock and a comparison of that trading history with the trading histories of certain other publicly traded companies that Xenon deemed relevant;

    compared certain of our financial and stock market information with similar publicly available information of certain other companies that Xenon deemed relevant;

    compared the proposed financial terms of the sale and the terms of the merger as proposed as of the time of Xenon's letters with the financial terms, to the extent publicly available, of certain other transactions that Xenon deemed relevant;

    reviewed the sale agreement and the proposed terms of the merger agreement; and

    performed such other analyses and studies and considered such other factors as Xenon deemed appropriate.

        In preparing its analyses, Xenon assumed and relied upon, without independent verification, the accuracy and completeness of all of the financial and other information and data, including without limitation the forecasts prepared by management in early 2015, publicly available or provided to or otherwise reviewed by or discussed with it, and relied upon the assurances of the members of our management that they are not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect, including, in respect of such forecasts, as of the date of such forecasts. With respect to the forecasts, Xenon assumed, without independent

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verification, that such forecasts were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of our management as to our future financial performance. Xenon did not make, and was not provided, with any independent evaluation or appraisal of our assets or liabilities (contingent or otherwise), nor did it make any physical inspection of our properties or assets. Xenon did not evaluate our solvency under any applicable laws relating to bankruptcy, insolvency or similar matters. Xenon assumed that the sale would be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the sale, no delay, limitation, restriction or condition will be imposed that would have an adverse effect on us or the contemplated benefits of the sale. Xenon similarly assumed that the merger would be consummated in accordance with the proposed terms as of the respective dates it delivered its letters to the special committee, which terms are substantially similar to those included in the merger agreement, as described further in the section entitled "The Merger Agreement—The Merger" beginning on page 93 of this proxy statement. Xenon's letters to the special committee expressed no view or opinion as to any terms or other aspects of the sale or the merger (other than, in each case, the consideration to be received therewith, to the extent expressly specified in such letters). In addition, Xenon's letters expressed no recommendation to the special committee as to whether it should recommend the approval of the sale, the merger, the sale agreement or the merger agreement to our board of directors, and such letters expressed no recommendation as to how any stockholder should vote or act in connection with the sale or the merger. The special committee imposed no other limitations on the investigations made or procedures followed by Xenon in rendering its analyses.

        Xenon's analyses were necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to Xenon as of, the respective dates of its letters to the special committee. It should be understood that subsequent developments may affect Xenon's analyses, and Xenon does not have any obligation to update, revise, or reaffirm its analyses. The following represents a summary of the material financial analyses undertaken by Xenon in connection with preparing its letters to the special committee. The following summary, however, does not purport to be a complete description of the financial analyses performed by Xenon, nor does the order of analyses described represent relative importance or weight given by Xenon to those analyses. The financial analyses summarized below include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Xenon's financial analyses. Considering the data set forth in the tables below without considering the full narrative description of the financial and other analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by Xenon.

Historical Stock Trading Analysis

        Xenon analyzed the consideration to be received in the sale, as well as the consideration of between $1.77 and $2.19 per share (revised downward from earlier estimates of the range of proposed merger consideration in light of updated estimates of our Company's available cash as of the effective time of the merger) of our common stock that it estimates will be paid to our stockholders (other than Telcrest) in connection with the merger, in relation to market prices of our common stock over selected dates and selected periods.

        A combination of uncertainty around the future ownership structure of our business and the resulting implications for compliance with the Mass Media Law, weak operating performance and the challenging overall macro environment has driven a substantial de-rating of our common stock in 2015, with our common stock currently trading at historical all-time lows. Since the first public disclosure of the consideration of the Mass Media Law by the Russian Duma in the second half of September 2014,

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the public trading price of our common stock has significantly underperformed the market and has sharply dropped, including to a historical low of $1.67 on September 2, 2015.

        This analysis indicated that the high end of the anticipated range of per share consideration of $2.19 estimated to be received pursuant to the merger by stockholders (other than Telcrest) represented:

    a premium of 15.9%, based on the closing market price of $1.89 per share on September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015;

    a premium of 1.4%, based on the closing market price of $2.16 per share on July 2, 2015, being the last trading day before we announced the receipt of a non-binding offer from UTH for 75% of participation interests in CTC Investments;

    a premium of 18.4%, based on the volume-weighted average price (VWAP) of $1.85 over the period from July 6, 2015, being the date on which we announced the receipt of a non-binding offer from UTH, to September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015;

    a premium of 10.6%, based on volume-weighted average price (VWAP) of $1.98 for the last 90 days of the period ended on September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015; and

    a premium of 21.7%, based on the volume-weighted average price (VWAP) of $1.80 for the last 30 days of the period ended on September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015.

        The mid-point of the anticipated range of per share consideration of $1.98 estimated to be received pursuant to the merger by stockholders (other than Telcrest) represented:

    a premium of 4.8%, based on the closing market price of $1.89 per share on September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015;

    a discount of 8.3%, based on the closing market price of $2.16 per share on July 2, 2015, being the last trading day before we announced the receipt of a non-binding offer from UTH for 75% of participation interests in CTC Investments;

    a premium of 7.0%, based on the volume-weighted average price (VWAP) of $1.85 over the period from July 6, 2015, being the date on which we announced the receipt of a non-binding offer from UTH, to September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015;

    a premium of 0.0%, based on volume-weighted average price (VWAP) of $1.98 for the last 90 days of the period ended on September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015; and

    a premium of 10.0%, based on the volume-weighted average price (VWAP) of $1.80 for the last 30 days of the period ended on September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015.

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        The low end of the anticipated range of per share consideration of $1.77 estimated to be received pursuant to the merger by stockholders (other than Telcrest) represented:

    a discount of (6.3)%, based on the closing market price of $1.89 per share on September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015;

    a discount of (18.1)%, based on the closing market price of $2.16 per share on July 2, 2015, being the last trading day before we announced the receipt of a non-binding offer from UTH for 75% of participation interests in CTC Investments;

    a discount of (4.3)%, based on the volume-weighted average price (VWAP) of $1.85 over the period from July 6, 2015, being the date on which we announced the receipt of a non-binding offer from UTH, to September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015;

    a discount of (10.6)%, based on volume-weighted average price (VWAP) of $1.98 for the last 90 days of the period ended on September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015; and

    a discount of (1.7)%, based on the volume-weighted average price (VWAP) of $1.80 for the last 30 days of the period ended on September 24, 2015, being the last trading day before we announced the execution of the sale agreement with UTV-Management on September 25, 2015.

Selected Publicly Traded Companies Analysis

        Xenon reviewed and compared certain of our financial information with corresponding financial information, ratios and public market multiples for selected publicly traded companies in the television broadcasting business, referred to below as "selected companies." None of these companies have broadcasting businesses solely in Russia and Kazakhstan, and therefore such data were considered for illustrative purposes only. The selected companies are as follows:

European TV broadcasting companies:

    Modern Times Group (Sweden)

    RTL Group (Germany)

    Mediaset (Italy)

    ITV PLC (UK)

    M6 (France)

    ProSiebenSat. 1 (Germany)

    Telecinco (Spain)

    Antena3 (Spain)

    TF1 (France)

US diversified media and TV broadcasting companies:

    CBS Corporation

    Discovery Communications

    Time Warner

    Viacom

    Walt Disney

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Eastern European TV broadcasting companies:

    TVN (Poland)

    Central European Media Enterprises (CEE).

        No selected company used in this analysis is identical or directly comparable to our Company. The selected companies were chosen because they are publicly traded companies with certain operational and financial characteristics (including, but not limited to their size and business lines), which, for purposes of this analysis, may be considered similar to our certain operational or financial characteristics. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Xenon made qualitative judgments, based on its experience in the industry and judgment as a financial advisor, concerning differences between our business, financial and operating characteristics and prospects and those of the selected companies that could affect the public trading values of the companies to which we were compared.

        Xenon calculated and compared the financial multiples and ratios for the selected companies and our Company based on the information it obtained from the SEC filings, Bloomberg and closing stock prices of each such company as of September 24, 2015, the last trading day before we announced the execution of the sale agreement with UTV-Management.

        With respect to the selected companies and our Company, Xenon calculated and compared:

    annual percentage growth rate of estimated EBITDA from calendar year 2014 to calendar year 2015;

    ratio of estimated EBITDA to estimated total revenue, referred to as "EBITDA margin," for calendar year 2015;

    estimated enterprise value, which is the market value of outstanding common equity plus the book value of debt, preferred stock and minority interest less cash and cash equivalents, as a multiple of estimated EBITDA for calendar year 2015.

The results of these analyses are summarized in the table below.

 
  EBITDA growth 2015 vs. 2014   EBITDA margin 2015   Enterprise value as a multiple of EBITDA for 2015  

European broadcasters

                   

Low

    (45.2 %)   9.1 %   4.5x  

Mean

    (6.7 %)   22.9 %   10.6x  

Median

    (6.9 %)   23.3 %   10.8x  

High

    20.0 %   38.9 %   15.0x  

US diversified media and broadcasters

   
 
   
 
   
 
 

Low

    (7.7 %)   22.8 %   7.6x  

Mean

    5.3 %   29.6 %   9.6x  

Median

    1.3 %   29.6 %   9.7x  

High

    17.0 %   37.7 %   11.6x  

Eastern European broadcasters

   
 
   
 
   
 
 

Low

    (33.1 %)   19.5 %   11.2x  

Mean

    (16.1 %)   26.4 %   13.4x  

Median

    (16.1 %)   26.4 %   13.4x  

High

    0.9 %   33.3 %   15.5x  

For reference, the Company

    (81.6 %)   10.7 %      

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        When considering risks related to our potential operating performance in 2015 in an extremely challenging market environment and continued difficult macroeconomic conditions, Xenon determined that a discount to our valuation multiples compared to our publicly traded US and European peers was appropriate. Based on the historical analysis of valuation multiples described below, a 45% discount was reasonable in Xenon's opinion.

        The analysis of the enterprise value / EBITDA 2015 of publicly traded comparables was then adjusted for our increased risk profile and challenging growth outlook. From this Xenon drew an illustrative range of multiples of 2.5x-8.3x for our enterprise value / EBITDA 2015. Xenon then applied this illustrative range to our EBITDA for the calendar year of 2015 based on the internal forecasts for our Company prepared by our management, converted at a projected exchange rate of $1.00 to RUB70. The results of this analysis implied a value per share range for our shares of common stock of approximately $1.23 to $2.63. This range of $1.23 to $2.63 per share was compared to the per share merger consideration.

Historical Valuation Multiples Analysis

        Xenon reviewed and compared our historical performance in respect of multiples of Enterprise Value / EBITDA to the dynamics of corresponding multiples for the following publicly traded companies in the European TV broadcasting industry that Xenon, based on its experience in the industry and judgment as a financial advisor, deemed comparable to our Company, which we refer to as the selected companies:

European TV broadcasting companies:

    Modern Times Group (Sweden)

    RTL Group (Germany)

    Mediaset (Italy)

    ITV PLC (UK)

    M6 (France)

    ProSiebenSat. 1 (Germany)

    Telecinco (Spain)

    Antena3 (Spain)

    TF1 (France)

US diversified media and TV broadcasting companies:

    CBS Corporation

    Discovery Communications

    Time Warner

    Viacom

    Walt Disney

Eastern European TV broadcasting companies:

    TVN (Poland)

    Central European Media Enterprises (CEE)

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        Xenon compared the performance of financial multiples for the selected companies over the period of three years ended on September 24, 2015, the last trading day before the announcement of the execution of the sale agreement with UTV-Management. With respect to the selected companies and our Company, Xenon calculated an estimated enterprise value, which is the market value of outstanding common stock plus the book value of debt, preferred stock and minority interest less cash and cash equivalents, as a multiple of estimated one-year forward EBITDA for the next twelve month calculated at each trading day based on broker consensus available from Bloomberg.

        The results of the analysis were as follows:

 
  Our
EV/NTM EBITDA
  European Broadcasters
median EV/NTM
EBITDA
  US diversified
media median EV/NTM
EBITDA
  Eastern
European
broadcasters
median EV/NTM
EBITDA
 

Last three-year period ended on September 24, 2015

                         

Low

    2.4x     6.3x     7.9x     9.1x  

Mean

    5.1x     9.3x     10.1x     11.8x  

% (discount) of CTC to peers

    (45.4 %)   (49.5 %)   (56.7 %)      

Median

    5.4x     9.4x     10.4x     11.6x  

% (discount) of CTC to peers

    (45.8 %)   (51.0 %)   (55.9 %)      

High

    7.2x     12.7x     11.5x     14.8x  

Period from September 24, 2012 to October 15, 2014, the date when the Mass Media Law was adopted

                         

Low

    2.6x     6.3x     7.9x     9.1x  

Mean

    5.7x     8.7x     9.9x     11.8x  

% (discount) of CTC to peers

    (41.3 %)   (48.2 %)   (56.6 %)      

Median

    5.7x     8.7x     10.1x     11.2x  

% (discount) of CTC to peers

    (41.2 %)   (49.6 %)   (54.4 %)      

High

    7.2x     11.2x     11.5x     14.8x  

Period from to October 15, 2014 to September 24, 2015

                         

Low

    2.4x     8.1x     8.8x     10.5x  

Mean

    3.8x     10.8x     10.7x     11.8x  

% (discount) of CTC to peers

    (52.6 %)   (52.2 %)   (56.9 %)      

Median

    3.5x     11.0x     10.9x     12.0x  

% (discount) of CTC to peers

    (53.7 %)   (53.2 %)   (57.3 %)      

High

    6.0x     12.7x     11.4x     12.6x  

        While historically, prior to adoption of the Mass Media Law, our common stock traded at an average discount of 45% on EV/NTM EBITDA multiples vs. publicly-European broadcast (derived from comparison of median multiples for the corresponding period), the discount has significantly increased recently to over 53%. A discount of our market valuation compared with the level of European broadcasters stems largely from the increased risk and high volatility of the Russian market in the current macroeconomic environment.

        Based on the results of this analysis and on other factors Xenon considered appropriate, Xenon applied an enterprise value/next-12 months' EBITDA ratio range of 2.4x to 6.0x to our projections of EBITDA over a period of the next 12 months ending September 24, 2016, being equal to $59,000,000 based on EBITDA in respect of fiscal year 2015 of RUB2,321,000,000 converted at an average 2015 exchange rate of $1=61.4RUB and EBITDA in respect of fiscal year 2016 of RUB4,591,000,000

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converted at a projected exchange rate of $1=70.0 RUB and assuming equal distribution of EBITDA throughout the calendar year. Xenon derived the following implied per share equity value range for our shares of common stock of $1.52 to $2.87. This range of $1.52 to $2.87 per share was compared with the anticipated range of per share merger consideration.

Illustrative Discounted Cash Flow Analysis

        Xenon performed an illustrative discounted cash flow analysis on our Company using the financial forecasts provided by our management, our SEC filings, and Bloomberg data as of September 24, 2015, being the assumed valuation date. The latest long-term financial projections were prepared by our management in early 2015, when there was a limited visibility on the TV advertising market dynamics from the second half of 2015 and 2016 onwards and do not reflect subsequent developments in our business, industry, regulatory environment or general economic and market conditions that may have an effect on our performance for the remainder of 2015 and future periods. Therefore, the results of the discounted cash flow analysis were presented to our board of directors for illustrative and completeness purposes only. In light of the extraordinary external circumstances faced by our Company and the lack of current visibility on our Company's performance in the medium and long-term, our board of directors acknowledged the implications of this analysis but did not rely on it in arriving at its decision to recommend the sale or the merger. Such discounted cash flow analysis included calculating the estimated present value of the standalone, unlevered, after-tax free cash flows (representing EBIT, less taxes, plus depreciation and amortization, less capital expenditures, less the amount of any increase or plus the amount of any decrease in the net working capital) that we could generate from the year ended December 2015 through the year ended December 2020. The following is a summary of the projections of the standalone, unlevered, after-tax free cash flows used in the illustrative discounted cash flow analysis:

In US$ millions
Period of Cash Flows
  2015F
24 Sep-Dec'15
  2016F
Full-year
  2017F
Full-year
  2018F
Full-year
  2019F
Full-year
  2020F
Full-year
 

Free Cash Flows

    19     41     46     56     54     59  

        Xenon also calculated an illustrative range of terminal values based on assumed perpetuity growth rates of revenues from year 2020 ranging from 0.5% to 1.5%. The standalone, unlevered, after-tax free cash flows and terminal values (i.e. the implied cash flow resulting from ranging terminal period revenues) were discounted to present value using discount rates ranging from 14.0% to 16.0%, reflecting estimates of our weighted average cost of capital, which was determined by Xenon based on its experience in the industry and judgment as a financial advisor, taking into account certain metrics including levered and unlevered beta, tax rates and current yields for the Russian Eurobonds and U.S. treasury notes.

        This analysis resulted in implied values per share of our common stock of approximately $3.05 to $3.54, compared with the range of per share consideration of $1.77 to $2.19 per share (revised downward from earlier estimates of the range of proposed merger consideration in light of updated estimates of our Company's available cash as of the effective time of the merger). The special committee and board of directors noted that the discounted cash flow analysis outlined above assumed that our Company would continue as a going concern. However, the failure of our Company to comply with the amended Mass Media Law before the deadline on January 1, 2016 could potentially result in substantial destruction of all remaining value for our stockholders. Accordingly, at our request, Xenon performed a probability weighted illustrative analysis of an indicative value range assuming a 50% probability of the liquidation of our Company and a 50% probability of our Company continuing as a going concern. This illustrative analysis resulted in implied values per share of our common stock of approximately $1.55 to $1.73, compared with the range of per share consideration of $1.77 to $2.19 per share.

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Selected Precedent Transaction Analysis

        Taking into account the extraordinary external circumstances faced by our Company, Xenon concluded that an analysis of precedent transactions would not be informative.

Considerations Related to Xenon's Analyses

        The preparation of a financial analysis is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to particular circumstances and, therefore, a financial analysis is not readily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Xenon's analysis. Xenon did not form a recommendation as to whether any individual analysis or factor, considered in isolation, supported or failed to support its cumulative analysis. Xenon considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Xenon made its determination on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to our Company, the sale or the merger.

        Xenon prepared its letters to the special committee for purposes of analyzing whether the proposed consideration to be received by us for the sale of 75% of the participation interests in CTC Investments and the proposed merger consideration (as estimated by Xenon on the basis of the proposed terms of the merger as of the time of its letters) to our unaffiliated stockholders in the merger, are within a range of reasonableness and whether the proposed transaction is fair to unaffiliated stockholders. Xenon's analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold or the prices at which any securities have traded or may trade at any time in the future. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by Xenon's analyses. Because such analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of us or our affiliates, Xenon or any other person assumes responsibility if future results are materially different from those forecast. Xenon provided advice to the special committee during the negotiation of the sale and evaluation of the merger. Xenon did not, however, recommend any specific amount of consideration to us or the special committee or that any specific amount of consideration constituted the only appropriate consideration for the sale or the merger.

        The decisions to recommend the entry into and to enter into the sale agreement and the merger agreement were solely those of the special committee and our board of directors. As described under "Special Factors Related to the Transactions—Reasons for the Transactions; Recommendation of the Special Committee and Board of Directors; Fairness of the Transactions" beginning on page 39 of this proxy statement, Xenon's analyses were only one of many factors considered by the special committee and the board, in their evaluation of the sale and the merger and should not be viewed as determinative of the views of the special committee or our board of directors with respect to the sale or the merger or the consideration to be received in connection therewith. The foregoing summary does not purport to be a complete description of the analyses performed by Xenon in connection with its letters to the special committee and is qualified in its entirety by reference to the letters to the special committee attached as Annex D to this proxy statement.

        Our special committee retained Xenon to act as its financial advisor because it concluded that Xenon was the best qualified financial advisory firm that was available to assist it in connection with the transactions. The special committee concluded that Xenon's familiarity with our Company, including through Ms. Tsukanova's role on our board of directors, together with its familiarity with

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the Russian business environment, best positioned Xenon to provide effective support to the special committee in this regard. Pursuant to a letter agreement dated July 28, 2015, Xenon was engaged to act as financial advisor to the special committee. Pursuant to an engagement agreement with Xenon dated July 28, 2015, fees for services by Xenon were set at $1,500,000. This agreement was amended on October 7, 2015 to increase the total fees to $2,000,000, in light of the increased complexity and longer time frame of the proposed transactions and the unanticipated scope of the related workload of Xenon. Such fees are payable in four equal installments upon the following milestones: the signing of the sale agreement, the mailing of a definitive proxy statement to our stockholders, the approval of the transactions by our stockholders, and the closing of the merger. We have also agreed to reimburse Xenon for reasonable out-of-pocket costs and expenses (including fees and expenses of its counsel) reasonably incurred by it in connection with its services, and will indemnify Xenon against potential liabilities arising out of its engagement, including certain liabilities under the U.S. federal securities.

Certain Company Forecasts

        Although we have historically provided public guidance for our financial performance on an annual basis, and periodically updated such guidance during the course of the fiscal year, we do not, as a matter of course, publicly disclose financial projections as to future financial performance, earnings or other results longer than one year. We are especially cautious of making financial projections for periods longer than one year, due to unpredictability of the underlying assumptions and estimates. However, in connection with the evaluation of a possible transaction involving CTC Investments, in early 2015, our senior management prepared certain non-public financial projections covering multiple years that were subsequently provided to UTV-Management, our board of directors, the special committee and Xenon, which were not prepared with a view toward public disclosure. The financial projections were utilized by Xenon, at the direction of the special committee, for purposes of the financial analyses it rendered to the special committee and our board of directors during the process of evaluating the sale and its related analyses. We note that the forecasts of the operating performance of our business do not give effect to our potential noncompliance with the foreign ownership requirements of the Mass Media Law, which circumstances could require us to cease operations entirely. See "Special Factors Related to the Transactions—Analysis of Financial Advisor of the Special Committee—Xenon Capital Partners" beginning on page 46.

        A summary of these financial projections is being included in this proxy statement, not to influence your decision whether to vote for or against the proposal to adopt the sale agreement, but rather because these financial projections were made available to our board of directors, the special committee, Xenon and UTV-Management. The inclusion of these projections or any other projections provided in connection with the transaction should not be regarded as a representation by us, our board of directors, the special committee, Xenon, UTV-Management or any other person, and should not be regarded as a representation by us that we considered, or now consider, the projections to be necessarily representative of actual future results.

        We believe that the assumptions our management used as a basis for the projections were reasonable at the time the projections were prepared, given information that our senior management had at the time. However, the projections were prepared in early 2015 and do not reflect subsequent developments in our business, industry, regulatory environment or general economic and market conditions that may have an effect on our performance for the remainder of 2015 and future periods. Except to the extent required by applicable federal securities laws, we do not intend, and expressly disclaim any responsibility, to update or otherwise revise the projections to reflect circumstances existing after the date when prepared or to reflect the occurrence of future events. The assumptions upon which these projections were based are subjective in many respects, and are subject to various interpretations.

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        Although the projections are presented with numerical specificity, the projections reflect numerous assumptions with respect to industry performance, general business, economic, market, regulatory and financial conditions and other matters, all of which are difficult to predict, and many of which are beyond our control. The projections are also subject to significant uncertainties in connection with changes to our business and its financial condition and results of operations, and include numerous estimates and assumptions related to our business that are inherently subject to significant economic, political and competitive uncertainties, including those factors described under "Risk Factors" incorporated herein by reference from our Annual Report on Form 10-K, filed on March 5, 2015, and Amendment No. 1 thereto, filed on May 1, 2015, and our Quarterly Report on Form 10-Q filed on August 7, 2015, all of which are difficult to predict and many of which are beyond our control. As a result, although the projections set forth below were prepared in good faith based upon assumptions believed to be reasonable at the time the projections were prepared, there can be no assurance that the projected results will be realized, or that actual results will not be significantly higher or lower than projected. Given the projections below cover multiple years, such information by its nature becomes less reliable with each successive year. For the foregoing reasons, the inclusion of projections in this proxy statement should not be regarded as an indication that such projections will be necessarily predictive of actual future events, and they should not be relied upon as such.

        The projections were not prepared with a view to compliance with published guidelines of the SEC regarding projections, or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Furthermore, our independent auditor has not examined, compiled or otherwise applied procedures to the projections and, accordingly, assumes no responsibility for, and expresses no opinion on, them. We have made no representation to UTV-Management or any other person in the sale agreement or otherwise concerning these financial projections.

        The financial projections are forward-looking statements. For information on factors that may cause our future financial results to materially vary, see "Cautionary Statement Concerning Forward-Looking Information" beginning on page 62 of this proxy statement.

        The following is a summary of the financial projections prepared by our senior management and provided to UTV-Management, our board of directors, the special committee and Xenon:

in RUB, millions
  2015F   2016F   2017F   2018F   2019F   CAGR'
2015-2019
 

Total Revenue

    21,614     24,847     27,293     30,109     33,426     11.5 %

% Growth

    (20.7 %)   15.0 %   9.8 %   10.3 %   11.0 %      

Programming expenses

   
(10,868

)
 
(12,044

)
 
(12,660

)
 
(13,418

)
 
(14,144

)
 
6.8

%

% Growth

    (5.8 %)   10.8 %   5.1 %   6.0 %   5.4 %      

% of Total Revenue

    (50.3 %)   (48.5 %)   (46.4 %)   (44.6 %)   (42.3 %)      

Other Operating expenses

   
(8,425

)
 
(8,212

)
 
(8,694

)
 
(9,314

)
 
(11,826

)
 
8.8

%

% Growth

    6.4 %   (2.5 %)   5.9 %   7.1 %   27.0 %      

% of Total Revenue

    (39.0 %)   (33.0 %)   (31.9 %)   (30.9 %)   (35.4 %)      

OIBDA*

   
2,321
   
4,591
   
5,939
   
7,377
   
7,456
   
33.9

%

% Growth

    (70.2 %)   97.8 %   29.4 %   24.2 %   1.1 %      

% Margin

    10.7 %   18.5 %   21.8 %   24.5 %   22.3 %      

*
In our standard disclosure to the investor community we report OIBDA, defined as operating income before depreciation and amortization. OIBDA is a non-U.S. GAAP financial measure.

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Effects of the Merger

Treatment of Common Stock, Options and Other Equity Awards in the Merger

    Common Stock.  At the effective time of the merger, each share of our common stock issued and outstanding (except for shares held by us, shares held by stockholders who have properly exercised appraisal rights and shares that are held by Telcrest), including the shares held by MTG, our largest stockholder, will convert into the right to receive the per share merger consideration, without interest, less any applicable withholding taxes. The shares of our common stock held by Telcrest will not be so converted, and will remain outstanding and unaffected by the merger, as a result of which Telcrest will become our sole stockholder. See "Special Note Regarding Telcrest".

    Options.  At the effective time of the merger, each outstanding option will terminate. All outstanding options have exercise prices in excess of the per share merger consideration.

    Restricted Stock Units.  At the effective time of the merger, subject to our obligations described under the heading "Proposal 3—Advisory Vote on Management Retention Compensation—Management Retention and Incentive Arrangements," each outstanding restricted stock unit will terminate.

Interests of Certain Persons in the Merger

        In considering the recommendation of our board of directors that you vote to adopt the merger agreement, you should be aware that certain of our directors and executive officers have financial interests in the merger that may be different from, or in addition to, those of our stockholders generally. These interests include the following:

    the receipt by each of the members of the special committee of fees as described above, whether or not the merger occurs; and

    that each share of our common stock held by MTG or our unaffiliated stockholders will be cancelled and exchanged for the merger consideration, while each share of our common stock that is held by Telcrest will remain outstanding and the holder thereof shall not be entitled to receive any merger consideration, as a result of which Telcrest will become our sole stockholder.

        In addition, our board of directors and special committee are considering the composition of the management of our Company following the closing of the sale, at which time the existing management team will remain with our operating business. Our board of directors is considering the possibility of appointing a member of the special committee to a management role in our Company following the closing of the sale, although no decision has yet been made in this regard.

        Our board of directors, except for those members originally designated by Telcrest (who did not participate in the decision in accordance with our economic sanctions compliance policy) was aware of and considered these interests, among other matters, in evaluating the merger agreement and the merger, and in recommending that the merger agreement be adopted by our stockholders.

Equity Compensation and Incentive Awards

        See "Proposal 3—Advisory Vote on Management Retention Compensation—Management Retention and Incentive Arrangements."

Indemnification and Insurance

        We have agreed to, until six years after the effective time of the merger: (a) indemnify and hold harmless our Company's present and former directors and officers and the present and former directors

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and officers of the Company's subsidiaries against all claims, liabilities, losses, damages, judgments, fines and reasonable fees, costs and expenses (including attorneys' fees and disbursements) incurred in connection with any claim, action, suit, proceeding or investigation (whether civil, criminal, administrative or investigative) arising out of or pertaining to the fact that such persons were directors or officers of our Company or any of its subsidiaries or matters existing or occurring at or prior to the effective time of the merger (including in connection with the merger agreement and the merger) to the fullest extent permitted by law, whether asserted or claimed prior to or after the effective time of the merger, to the extent not otherwise paid for by insurance, and (b) advance to such present and former directors and officers all expenses incurred in the defense of any claim, action, suit, proceeding or investigation. We have also agreed that from and after the effective time of the merger the certificate of incorporation and by-laws of the surviving corporation will contain provisions no less favorable to our present and former directors and officers, employees and agents, with respect to indemnification, advancement of expenses and exculpation, than those set forth in our governing documents as of the date of the merger, which provisions will not be amended, repealed or otherwise modified in a manner that would adversely affect the rights of our present and former officers and directors.

        We have agreed to maintain, until six years after the effective time of the merger, our current directors' and officers' liability insurance policies with respect to matters existing or occurring at or prior to the effective time of the merger, so long as the annual premium for that policy would not be in excess of 300% of the last annual premium paid prior to the signing of the merger agreement, which we refer to as the Maximum Premium. If our existing insurance expires or is terminated or cancelled, or the annual premium of such insurance would exceed the Maximum Premium during such six-year period, the we shall obtain for the remainder of such period, replacement directors' and officers' liability insurance with the most advantageous limits, deductibles and other terms and conditions available for an annualized premium not in excess of the Maximum Premium.

Reduced Compliance Costs

        If the merger is completed, our common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Exchange Act, and we will no longer file periodic reports with the SEC on account of our common stock. In 2014, we incurred approximately $2.3 million in legal, accounting and other compliance costs relating to being a publicly traded company. We currently estimate that our Company will benefit from annual cost savings of approximately $2.0 million following the completion of the transactions. Stockholders other than Telcrest, who will be our sole remaining stockholder, will not benefit from these cost savings realized by the Company after it ceases to be a publicly traded company. Certain of our directors and executive officers, including the members of our board of directors designated by Telcrest, may have employment or other financial interests in Telcrest.

Material U.S. Federal Income Tax Consequences of the Merger

        The following is a summary of the material U.S. federal income tax consequences of the merger to U.S. holders and non-U.S. holders (each as defined below) whose shares of our common stock are converted into the right to receive cash in the merger. This summary does not purport to consider all aspects of U.S. federal income taxation that might be relevant to our stockholders. For purposes of this discussion, we use the term "U.S. holder" to mean a beneficial owner of shares of our common stock that is, for U.S. federal income tax purposes:

    an individual who is a citizen or resident of the United States;

    a corporation created or organized under the laws of the United States or any of its political subdivisions;

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    a trust that (i) is subject to the supervision of a court within the United States and the control of one or more U.S. persons, or (ii) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person; or

    an estate that is subject to U.S. federal income tax on its income regardless of its source.

        The term "non-U.S. holder" means a beneficial owner (other than an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes) of shares of common stock that is not a U.S. holder.

        If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holds common stock, the tax treatment of a partner in that partnership generally will depend on the status of the partner and the activities of the partnership. A partner of a partnership holding common stock should consult the partner's tax advisor regarding the U.S. federal income tax consequences of the merger to such partner.

        This discussion is based upon the Internal Revenue Code of 1986, as amended, which we refer to in this proxy statement as the Code, as well as U.S. Treasury Regulations, Internal Revenue Service rulings and other guidance, and judicial decisions now in effect, all of which are subject to change (possibly with retroactive effect) or different interpretations. The discussion applies only to beneficial owners who hold shares of the Company's common stock as capital assets within the meaning of Section 1221 of the Code, and does not apply to: (i) shares of the Company's common stock received in connection with the exercise of employee stock options or otherwise as compensation; (ii) stockholders who validly exercise their rights under the DGCL to object to the merger; or (iii) certain types of beneficial owners who may be subject to special rules (such as U.S. expatriates and certain former citizens or long-term residents of the United States, insurance companies, banks, tax-exempt organizations, financial institutions, broker-dealers or traders in securities or foreign currencies, partnerships, S corporations or other pass-through entities, real estate investment trusts or regulated investment companies, "controlled foreign corporations," "passive foreign investment companies," and corporations that accumulate earnings to avoid U.S. federal income tax, mutual funds, traders in securities who elect the mark-to-market method of accounting, stockholders subject to the alternative minimum tax, stockholders that have a functional currency other than the U.S. dollar or stockholders who hold common stock as part of a hedge, straddle, constructive sale or conversion transaction). This discussion does not address the receipt of cash in connection with the cancellation of options to purchase shares of the Company's common stock or any other matters relating to equity compensation or benefit plans. This discussion does not address any aspect of state, local or foreign tax laws, or federal estate or gift tax laws. Also note that this discussion is intended to provide only a general summary and does not purport to consider all aspects of U.S. federal income taxation that might be relevant to our stockholders. This discussion does not address any tax consequences arising under the unearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010. The U.S. federal income tax laws are complex and subject to varying interpretations. This discussion is not binding on the U.S. Internal Revenue Service (which we refer to as the IRS) or the courts and, therefore, could be subject to challenge, which could be sustained. We will not seek any ruling from the IRS with respect to the merger.

Exchange by U.S. Holders of Shares of the Company's Common Stock for Cash Following the Merger

        The exchange of shares of our common stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder whose shares of our common stock are converted into the right to receive cash in the merger will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount of cash received with respect to such shares (determined before the deduction of any applicable withholding taxes) and the U.S. holder's adjusted tax basis in such shares. A U.S. holder's adjusted tax basis in our

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shares common stock for U.S. federal income tax purposes will generally equal the price the U.S. holder paid for such shares. Gain or loss will be determined separately for each block of shares of our common stock (i.e., shares of our common stock acquired at the same cost in a single transaction). Such gain or loss will be long-term capital gain or loss, provided that the U.S. holder's holding period for such shares of our common stock is more than 12 months at the time of the completion of the merger. There are limitations on the deductibility of capital losses.

Non-U.S. Holders

        The receipt of cash by a non-U.S. holder in exchange for shares of common stock pursuant to the merger will generally not be subject to U.S. federal income tax unless:

    the gain, if any, on such shares is effectively connected with the conduct by the non-U.S. holder of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to the non-U.S. holder's permanent establishment or fixed base in the United States), in which event (a) the non-U.S. holder will generally be subject to U.S. federal income tax on such gain in the same manner as if it were a U.S. holder and (b) if the non-U.S. holder is a corporation, it may also be subject to a branch profits tax at a rate of 30% (or such lower rate as may be specified under an applicable income tax treaty);

    the non-U.S. holder is an individual who was present in the United States for 183 days or more in the taxable year of the exchange of shares of Common Stock for cash pursuant to the merger and certain other conditions are met, in which event the non-U.S. holder will be subject to tax at a rate of 30% (or such lower rate as may be specified under an applicable income tax treaty) on the gain from the exchange of such shares net of any applicable U.S. source capital losses from sales or exchanges of capital assets recognized during the year; or

    we are or have been a U.S. real property holding corporation, which we refer to as a USRPHC, as defined in Section 897 of the Code at any time within the five-year period preceding the merger (or the non-U.S. holder's holding period, if shorter), the non-U.S. holder owned (directly, indirectly or constructively) more than five percent of the Common Stock at any time within that five-year period (or the non-U.S. holder's holding period, if shorter), and certain other conditions are satisfied. We believe that, as of the closing date of the merger, we will not have been a USRPHC at any time within the five-year period ending on the closing date of the merger.

Backup Withholding and Information Reporting

        Backup withholding of tax may apply to cash payments to which a non-corporate U.S. holder is entitled in connection with the merger, unless the U.S. holder or other payee provides a taxpayer identification number, certifies that such number is correct, and otherwise complies with the backup withholding rules. Each of our U.S. holders should complete and sign, under penalty of perjury, the Substitute Form W-9 included as part of the letter of transmittal that will be sent promptly after the completion of the merger (but in no event more than 5 business days thereafter) and return it to the paying agent, in order to provide the information and certification necessary to avoid backup withholding, unless an exemption applies and is established in a manner satisfactory to the paying agent.

        In general, a non-U.S. holder will not be subject to U.S. federal backup withholding or information reporting with respect to cash received by the non-U.S. holder in exchange for shares of Common Stock pursuant to the merger if the non-U.S. holder (i) certifies under penalty of perjury that it is not a United States person (by providing a properly executed IRS Form W-8BEN, IRS Form W-8BEN-E or other applicable IRS Form W-8, or any of the successor forms) and the payor does not have actual

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knowledge or reason to know that the holder is a "United States person" as defined under the Code, or (ii) such holder otherwise establishes an exemption from backup withholding.

        Backup withholding is not an additional tax. Any amounts withheld from cash payments to a U.S. holder pursuant to the merger under the backup withholding rules will be allowable as a refund or a credit against such U.S. holder's U.S. federal income tax liability, provided the required information is timely furnished to the Internal Revenue Service.

        Cash payments made pursuant to the merger will also be subject to information reporting unless an exemption applies.

        The U.S. federal income tax consequences described above are not intended to constitute a complete description of all tax consequences relating to the merger. Because individual circumstances may differ, each stockholder should consult the stockholder's tax advisor regarding the applicability of the rules discussed above to the stockholder and the particular tax effects to the stockholder of the merger, in light of such stockholder's particular circumstances, the application of federal, state, local and foreign tax laws.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

        This proxy statement, and the documents to which we refer you in this proxy statement, contain forward-looking statements that involve numerous risks and uncertainties. The statements contained in this proxy statement that are not purely historical are forward-looking statements, including, without limitation, statements regarding the expected benefits and closing of the proposed transaction and our expectations, beliefs and intentions. All forward-looking statements included in this proxy statement are based on information available to the Company on the date hereof. There are forward-looking statements throughout this proxy statement, including, without limitation, under the headings "Summary Term Sheet," "Questions and Answers about the Special Meeting, the Sale and the Merger," "Proposal 1—The Sale," "Special Factors Related to the Transactions—Analysis of Financial Advisor of the Special Committee—Xenon Capital Partners" and "Proposal 1—The Sale—Regulatory Approvals." In some cases, you can identify forward-looking statements by terminology such as "may," "can," "will," "could," "expects," "intends," "anticipates," "believes," "estimates," "predicts," "projects," or variations of such words, similar expressions, or the negative of these terms or other comparable terminology. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on our results of operations or financial condition. Accordingly, actual results may differ materially and adversely from those expressed in any forward-looking statements. There are various important factors that could cause actual results to differ materially from those in any such forward-looking statements, many of which are beyond our control. In addition to other factors and matters contained or incorporated in this document, these statements are subject to risks, uncertainties, and other factors, including, among others:

    the occurrence of any event, change or other circumstance that could give rise to the termination of the sale agreement or the merger agreement;

    the inability to complete the sale or the merger due to the failure to obtain stockholder approval or the failure to satisfy other conditions required for the consummation of the sale or the consummation of the merger, respectively;

    the inability to complete the merger because we do not receive any license that may be required by OFAC in that regard;

    any failure or delay in consummation of the sale or the merger for other reasons;

    changes in Russian law or the macroeconomic or geopolitical environment;

    the disruption by the proposed transactions of current plans and operations and the potential difficulties in employee retention as a result of the sale;

    the effect of the announcement of the sale and the merger on our business relationships, operating results and business generally;

    the diversion of our management's attention from our ongoing business concerns;

    the outcome of any legal proceedings that have been or may be instituted against us and/or others relating to the sale agreement or the merger agreement;

    limitations placed on our ability to operate the business by the sale agreement;

    the amounts of the costs, fees, expenses and charges related to the sale;

    changes in laws or regulations;

    changes in the financial or credit markets or economic conditions generally;

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and any other risks as are mentioned in reports filed by the Company with the SEC from time to time, including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. See "Where You Can Find More Information" beginning on page 118 of this proxy statement. We do not undertake any obligation to publicly release any revision to any forward-looking statements contained in this proxy statement to reflect events, changes and circumstances occurring after the date of this proxy statement or to reflect the occurrence of unanticipated events. Caution should be taken that these factors could cause the actual results to differ from those stated or implied in this proxy statement.

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RISKS RELATING TO THE PROPOSED TRANSACTIONS

        Set forth below are various risks relating to the proposed transactions. The following is not intended to be an exhaustive list of the risks relating to the sale and merger and should be read in conjunction with the other information in this proxy statement. In addition, you should refer to the section entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and our subsequently filed Quarterly Reports on Form 10-Q.

If we fail to complete the sale prior to January 1, 2016, amendments to the Russian law "On Mass Media" will likely materially adversely affect our operations and/or our stockholders and the value of our common stock.

        An amendment to the Mass Media Law will reduce the permitted level of foreign ownership in Russian mass media companies, including television broadcasters, from 50% direct ownership to 20% beneficial ownership or control, whether direct or indirect. No amendments to or waivers from the Mass Media Law have been approved to date, and therefore the core provision of this amended law will become effective on January 1, 2016. Neither our Company nor the current beneficial ownership structure of our Company would currently comply with the requirements of the new law. In the event of non-compliance by the stated deadline, the Russian government would have the authority to revoke the mass media registration and broadcasting licenses of our businesses, and we would be unable to exercise our voting rights in our Russian subsidiaries. Any such revocation would result in the diminution of substantially all of the value of our businesses.

        Accordingly, if we fail to complete the sale prior to January 1, 2016, the value of our common stock could substantially decline, and you may lose all or a significant portion of your investment.

The per share merger consideration will be based upon the amount of our cash available as of the merger, which is dependent upon our financial performance.

        The per share merger consideration is expected to be in a range between $1.77 and $2.19 in cash. The minimum merger consideration of $1.77 per share reflects the maximum possible potential price adjustment under the sale agreement, and the actual amount of such consideration will depend on the operating performance of our business during the second half of 2015 and the anticipated cash reserves that will be appropriate in light of potential liabilities at the time of closing. If our available cash at the effective time of the merger is insufficient to distribute merger consideration of at least $1.77 per share, we will resolicit stockholder approval for the proposed transactions. Otherwise, we may consummate the sale and the merger if our board of directors determines that all applicable conditions have been satisfied and the merger consideration is at least $1.77 per share.

        Our primary source of cash as of the merger will be the net proceeds of the sale. UTV-Management will pay us approximately $200 million in cash as consideration for the sale, subject to reduction if we do not achieve certain targets for net cash flows from operating and investing activities during the second half of 2015, as well as specific indemnification obligations, as set forth in the Sale Agreement and described in "The Sale Agreement—Consideration to be Received Pursuant to the Sale; Adjustments to the Purchase Price" beginning on page 80 of this proxy statement.

        Our ability to generate adequate cash flows from operations and to achieve such targets will depend upon our audience shares and our financial performance in the remainder of 2015. Our financial performance is dependent upon many factors, including macroeconomic and geopolitical conditions, tensions in Ukraine and the Crimea and the value of the Russian ruble, as well as competitive forces and our ability to maintain our audience and advertising market share. Based on our management's current forecast for operating performance through the remainder of 2015, we currently anticipate that the potential shortfall in cash flow from operating and investing activities during the second half of 2015 compared with the agreed target may result in a downwards adjustment of the

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purchase price payable by UTH in the low-to-mid single-digit million dollar range. The actual result may be higher or lower than this estimate depending on the actual performance of the business in the remainder of the year, which will depend significantly on macroeconomic and market developments.

        In addition, because a part of our business that is being sold to UTV-Management is located in Kazakhstan, our financial performance is also dependent on fluctuations in Kazakhstan's national currency, the tenge. Although from the beginning of 2015 until August 20, 2015, the tenge lost 7% against the U.S. dollar, once the National Bank of Kazakhstan switched from an exchange rate pegged against the U.S. dollar to a floating exchange rate on August 20, 2015, the tenge lost 22% of its value against the U.S. dollar during the day following the introduction of the new policy. Weakness in operating performance in our Kazakhstan operations, or the adverse impact of currency depreciation in Kazakhstan, could adversely affect our overall operating performance in the remainder of 2015, and therefore adversely affect the ultimate purchase price received in connection with the sale.

Failure to complete the proposed transactions could negatively impact the future business and financial results of the Company.

        We cannot assure you that we will be able to satisfy all of the conditions to the sale or the merger or succeed in any litigation brought in connection with the proposed transactions. If the proposed transactions are not completed, in addition to the other risks described herein, our business, financial condition, results of operations and cash flows may be adversely affected and we will be subject to several risks, including but not limited to:

    the market price of our common stock may decline substantially;

    being required to pay a termination fee of $5 million (or a "no vote" fee of $2.6 million), and reimbursement of expenses, under certain circumstances provided in the sale agreement;

    payment of costs relating to the merger, such as legal, accounting, financial advisor and printing fees, whether or not the proposed transactions are completed; and

    having had the focus of our management on the proposed transaction instead of on pursuing other opportunities that could have been beneficial to our Company.

        If the proposed transactions are not completed, we cannot assure you that these risks will not materialize and will not materially and adversely affect our business, financial condition, results of operations and cash flows. Further, if the sale and the merger are not completed and our board of directors seeks another business combination or similar transaction, our stockholders cannot be certain that we will be able to find a party willing to pay a price equivalent to or better than the price to be paid in the proposed sale, or that any alternative transaction could be completed by the stated deadline under the Mass Media Law.

We are subject to business uncertainties and contractual restrictions while the proposed transactions are pending, which could adversely affect our business and operations.

        In connection with the pendency of the proposed transactions, it is possible that some customers, suppliers and other persons with whom we have a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with us as a result of the proposed transactions, which could negatively affect our revenues, earnings and cash flows, as well as the market price of our common stock, regardless of whether the proposed transactions are completed.

        Under the terms of the sale agreement, we are subject to certain restrictions on the conduct of our business prior to completing the sale, which may adversely affect our ability to execute certain of our business strategies, including the ability in certain cases to enter into or amend contracts, acquire or

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dispose of assets, incur indebtedness or incur capital expenditures. Such limitations could adversely affect our businesses and operations prior to the completion of the sale.

        Each of the risks described above may be exacerbated by delays or other adverse developments with respect to the completion of the proposed transactions.

Uncertainties associated with the transactions may result in the loss of key personnel.

        Our current and prospective employees may be uncertain about their future roles and relationships with our operating business following the completion of the transactions. This uncertainty may adversely affect our ability to attract and retain key management and personnel.

The merger is subject to the receipt of a license from OFAC, and an adverse determination by OFAC could prevent the consummation of the merger.

        The United States has imposed economic sanctions that affect transactions with designated foreign countries, nationals and others, which are administered by OFAC. In particular, the United States prohibits U.S. persons from engaging with individuals and entities identified as SDNs, including financial transactions with, or relating to, the SDN, and require the blocking of assets in which the SDN has an interest. Blocked assets (e.g., property or bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC.

        Since Telcrest was, on March 20, 2014, deemed an SDN by virtue of the fact that it was majority owned by Bank Rossiya, an SDN, Computershare has identified the shares of common stock held by Telcrest as blocked property under the sanctions regime and filed a blocking report with OFAC with respect to such shares. While Telcrest notified us on September 25, 2015 that it is no longer 50% or more owned, directly or indirectly, in the aggregate by one or more SDNs, including Bank Rossiya, we believe that because our shares held by it have been reported as blocked property, such shares remain blocked until affirmatively unblocked by OFAC. In August, we approached OFAC for confirmation that the proposed transactions did not require a license, or in the alternative, that OFAC issue us a license permitting us to engage in the proposed transactions. It is our view that the sale does not require an OFAC license and, consistent with that view, OFAC has indicated informally that it does not intend to exercise jurisdiction over the sale. However, OFAC's informal guidance is not binding on OFAC, and if OFAC were ultimately to determine that a license is required to complete the sale but not issue such a license, we would be unable to complete the sale. Furthermore, if OFAC were to determine after closing that a license would have been required, we could potentially be subject to substantial fines or penalties. While we do not believe that either of these outcomes is likely, there can be no assurance that OFAC will not take a different view, particularly given the broad discretion granted to OFAC under the sanctions regime.

        Even if the sale is consummated, we do not intend to consummate the merger until such time as we receive a license from OFAC expressly permitting us to do so. There can be no assurance that OFAC will issue such a license within any given timeframe or at all. In the event of any delay in obtaining, or inability to obtain, a sufficient OFAC license, we will continue to investigate alternatives for returning the proceeds of the sale to our stockholders. However, our ability to do so may be substantially delayed, may need to be substantially restructured or altered, including in terms of the amount of such proceeds returned to our stockholders, or may not be possible for the foreseeable future.

Even if the merger is not consummated, we may decide to delist and deregister our common stock, which could result in risks for our stockholders

        Following the sale, as one element of an attractive exit for all of our stockholders, we may elect to delist and deregister our common stock by filing a Form 15 to deregister our common stock under the

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Exchange Act. As a result, our stockholders would be subject to the risks of an investment in a private rather than a public company, because the duty to file periodic reports (i.e., annual, quarterly and current reports) with the SEC would be suspended. As such public information regarding the Company would not be readily available.

        As a deregistered company, our shares would not be listed on a national securities exchange, and there may not be a sufficient number of shares outstanding and publicly traded shares following deregistration to ensure a continued or viable trading market. Our stockholders also could be adversely affected by the minimal or lack of a "public float," that is, the number of shares owned by outside shareholders and available for trading. The suspension of our reporting obligations under the Exchange Act may reduce or eliminate any trading market for our shares and may result in further declines in the price of our shares and reduced liquidity in any trading market for our shares in the future. We may also have less access to capital markets as a non-reporting company.

Litigation filed against the Company or UTV-Management could prevent or delay the consummation of the proposed transactions or result in the payment of damages following completion of the proposed transactions.

        In connection with the proposed transactions, our Company and UTV-Management could be subject to litigation. Any such litigation could seek to enjoin the proposed transactions and other relief. The outcome of any such litigation is uncertain. If a dismissal is not granted or a settlement is not reached, litigation could prevent or delay completion of the proposed transactions and result in substantial costs to our Company, including any costs associated with indemnification. The defense or settlement of any lawsuit or claim may adversely affect our business, financial condition, results of operations and cash flows.

Our executive officers and directors have certain interests in the sale and merger that may be different from other stockholders that may have influenced them to approve the sale agreement, sale, merger agreement and merger and to recommend the adoption of the sale agreement and the merger agreement.

        Our directors and executive officers have interests in the proposed transactions that may be different from, and in addition to, the interests of our stockholders generally, including with respect to employment, indemnification, retention bonuses and other arrangements, which may present a potential conflict of interest. Our board of directors was aware of these interests and considered that these interests may be different from, and in addition to, the interests of our stockholders generally in approving the sale agreement, sale, merger agreement and the merger, and in determining to recommend that our stockholders vote for the approval of the sale and the adoption of the merger agreement. For more information, see "Special Factors Related to the Transactions—Effects of the Merger—Interests of Certain Persons in the Merger" beginning on page 57 and "The Sale—Interests of Certain Persons in the Sale" beginning on page 77.

Following completion of the transactions, the Company will no longer exist as an independent public company and the Company's stockholders will forego any increase in the value of our operating business.

        If the sale and merger are completed, we will no longer be a publicly held corporation, and our stockholders will forego any increase in the value of our common stock that might otherwise result from our possible growth.

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PARTIES TO THE SALE

The Company

CTC Media, Inc.
31A Leningradsky Prospekt
Moscow 125284
Russia

        CTC Media, Inc., is a Delaware corporation. We are the holding company of a group of Russian (and other) legal entities, including CTC Investments LLC, which we refer to as CTC Investments, that operate four commercial television networks in Russia, as well as broadcasting operations in Kazakhstan. Unless the context otherwise requires, references to the Company, we or us in this proxy statement include the Company and our subsidiaries on a consolidated basis. For more information about the Company, please visit our website at http://www.ctcmedia.ru. Our website is provided as an inactive textual reference only. The information provided on our website is not part of this proxy statement, and therefore is not incorporated by reference. See also "Where You Can Find More Information" beginning on page 118. Our common stock is publicly traded on the Nasdaq Global Select Market under the symbol "CTCM".

UTV-Management

UTV-Management LLC
Varshavskoe Shosse, 25a, building 6
Moscow, Russia 117105

        UTV-Management LLC, which we refer to as UTV-Management, is a company organized under the law of Russia that is a privately held Russian commercial television broadcasting group. It is a subsidiary of UTH Russia Limited or UTH, a prominent Russian commercial television broadcaster, which operates in Russia the U Channel, the Disney Channel and the cable channel MUZ-TV. For more information about UTV-Management, please visit their website at http://www.uthrussia.ru. UTV-Management's website is provided as an inactive textual reference only. The information provided on UTV-Management's website is not part of this proxy statement, and therefore is not incorporated by reference.

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PARTIES TO THE MERGER

The Company

        CTC Media, Inc. is a party to the merger. Under the terms of the merger agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation.

Merger Sub

CTCM Merger Sub, Inc.
31A Leningradsky Prospekt
Moscow 125284
Russia

        CTCM Merger Sub, Inc., which we refer to as Merger Sub, is a Delaware corporation that is a wholly owned subsidiary of the Company and was organized solely for the purpose of entering into the merger agreement and consummating the transactions contemplated by the merger agreement. Under the terms of the merger agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation. Upon consummation of the proposed merger, Merger Sub will cease to exist.

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FEE ARRANGEMENTS

Special Committee Fees

        In accordance with the resolutions of our board of directors (except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy), the members of the special committee, which was formed on July 4, 2015, are entitled to the following fees, regardless of whether the sale or the merger are completed: Each member is entitled to receive $50,000 per month for the months of July and August 2015, and $25,000 per month thereafter, up to a capped amount of $200,000. In addition, the chairman of the special committee is entitled to receive an additional $10,000 per month for July and August 2015, and an additional $5,000 per month thereafter, up to a capped aggregate amount of $240,000.

Xenon Fee Arrangements

        Pursuant to an engagement agreement between our Company and Xenon dated as of July 28, 2015, the special committee agreed to pay Xenon $1,500,000 for services in connection with the sale and the merger. This agreement was amended on October 7, 2015 to increase the total fees to $2,000,000, in light of the increased complexity and longer timeframe of the proposed transactions and the unanticipated scope of the related workload of Xenon. Such fees are payable in four equal installments upon the following milestones: the signing of the sale agreement, the mailing of a definitive proxy statement to our stockholders, the approval of the transactions by our stockholders, and the closing of the merger. We have also agreed to reimburse Xenon for reasonable out-of-pocket costs and expenses (including fees and expenses of its counsel) reasonably incurred by it in connection with its services, and will indemnify Xenon against potential liabilities arising out of its engagement, including certain liabilities under the U.S. federal securities.

Expenses of the Proposed Transactions and Solicitation

        Whether or not the sale and merger are completed, we will incur certain fees and expenses. Total fees and expenses incurred or to be incurred by our Company in connection with the sale and merger are estimated at this time to be as follows:

 
  Amount  

Financial advisory fees and expenses

  $ 2,900,000  

Legal fees

  $ 2,660,000  

Accounting and tax advisory fees

  $ 850,000  

Investor relations related expenses

  $ 440,000  

SEC filing fees

  $ 51,000  

Printing costs

  $ 40,000  

Proxy solicitation costs

  $ 30,000  

Miscellaneous

  $ 209,000  

Total

  $ 7,180,000  

        These expenses may reduce our available cash as of the effective time of the merger and, accordingly, the merger consideration.

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THE SPECIAL MEETING

Time, Place and Purpose

        This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by our board of directors for use at the special meeting to be held on December 17, 2015, starting at 4:00 p.m., local time, at the offices of Morgan, Lewis & Bockius UK LLP, Condor House, 5-10 St. Paul's Churchyard, London EC4M 8AL, United Kingdom, or at any adjournment thereof. At the special meeting, holders of our common stock will be asked to approve the sale, to adopt the merger agreement, to approve an advisory (non-binding) proposal to approve the compensation that may be paid or become payable to our named executive officers that is based on or otherwise related to the proposed transactions, and to approve the proposal to adjourn the special meeting, if necessary, for the purpose of soliciting additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement.

        Our stockholders must approve the sale in order for the sale to occur, and must both approve the sale and adopt the merger agreement for the merger to occur. If our stockholders fail to approve the sale, the sale will not occur. If our stockholders fail to approve the sale and/or fail to adopt the merger agreement, the merger will not occur. If our stockholders approve the sale but fail to adopt the merger agreement, the sale will occur but the merger will not occur. If our stockholders adopt the merger agreement but fail to approve the sale, the merger will not occur. The failure of our stockholders to approve the advisory (non-binding) management retention compensation proposal will have no effect on the sale, merger or the payment of management retention compensation to our named executive officers to the extent payable in accordance with the terms of the agreements relating to such compensation. A copy of the sale agreement is attached as Annex A to this proxy statement and a copy of the merger agreement is attached as Annex B to this proxy statement. We encourage you to read each of the sale agreement and the merger agreement carefully in their entirety.

Record Date and Quorum

        Our board of directors (except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy) has fixed the close of business on November 16, 2015 as the record date for the special meeting, and only holders of record of our common stock on the record date are entitled to vote at the special meeting. You are entitled to receive notice of, and to vote at, the special meeting if you owned shares of our common stock at the close of business on the record date. On the record date, there were 156,103,854 shares of our common stock outstanding. Each share of our common stock entitles its holder to one vote on all matters properly coming before the special meeting. The shares of common stock held by Telcrest may not be voted for so long as they are blocked property pursuant to U.S. economic sanctions. See "Special Note Regarding Telcrest".

        A majority of the shares of our common stock outstanding at the close of business on the record date and entitled to vote, present in person or represented by proxy at the special meeting, constitutes a quorum for the purposes of the special meeting (which outstanding shares of our common stock includes those held by Telcrest, even though they may not be voted so long as they are treated as blocked property pursuant to U.S. economic sanctions). Shares of our common stock represented at the special meeting but not voted, including shares of our common stock for which a stockholder directs an "abstention" from voting (but not "broker non-votes," as described below), will be counted for purposes of establishing a quorum. A quorum is necessary to transact business at the special meeting. Once a share of our common stock is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting and any adjournment of the special meeting. However, if a new record date is set for the adjourned special meeting, then a new quorum will have to

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be established. In the event that a quorum is not present at the special meeting, it is expected that the special meeting will be adjourned or postponed to solicit additional proxies.

Attendance

        You are entitled to attend the special meeting only if you were a holder of our common stock as of the close of business on November 16, 2015, which we refer to as the record date, or hold a valid proxy for the special meeting. Given that seating is limited, admission to the special meeting will be on a first-come, first-served basis. You should be prepared to present photo identification for admittance. If you are not a stockholder of record but hold shares through a bank, broker, trustee or other nominee (i.e., in "street name"), you should provide proof of beneficial ownership as of the record date, such as your most recent account statement prior to the record date, a copy of the voting instruction card provided by your bank, broker, trustee or other nominee, or similar evidence of ownership.

Vote Required

        The approval of the sale requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon (which outstanding shares include those held by Telcrest), and the adoption of the merger agreement requires either (i) the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon (which outstanding shares include those held by Telcrest) or (ii) if our board determines at or prior to our special meeting of stockholders that the shares of common stock held by Telcrest have remained beneficially owned by Telcrest and that such shares are not blocked property pursuant to applicable sanctions, then the approval of (a) Telcrest and (b) at least a majority of the holders of the outstanding shares of our common stock that are not beneficially owned by Telcrest. For each of the proposal to approve the sale and the proposal to adopt the merger agreement, you may vote "FOR," "AGAINST," or "ABSTAIN." If you fail to submit a proxy or vote in person at the special meeting, or if you abstain, or you do not provide your bank, broker, trustee or other nominee with instructions, as applicable, it will have the same effect as a vote "AGAINST" the proposal to approve the sale and as a vote "AGAINST" the proposal to adopt the merger agreement.

        The proposal to approve, on an advisory (non-binding) basis, of the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the proposed transactions requires the affirmative vote of the holders of a majority of the shares of our common stock, present in person or represented by proxy and voting on the matter at the special meeting. For the management retention compensation proposal, you may vote "FOR," "AGAINST," or "ABSTAIN." For purposes of this proposal, if your shares of our common stock are present at the special meeting but are not voted on this proposal, or if you have given a proxy and abstained on this proposal, this will not be counted in respect of, and not have an effect on, the management retention compensation proposal. If you fail to submit a proxy or if your shares of our common stock are not present at the special meeting, or there are broker non-votes on the issue, as applicable, the shares of our common stock not voted will not be counted in respect of, and will not have an effect on, the management retention compensation proposal.

        If your shares of our common stock are registered directly in your name with our transfer agent, Computershare Trust Company, you are considered, with respect to those shares of our common stock, the "stockholder of record." This proxy statement and proxy card have been sent directly to you by us.

        If your shares of our common stock are held through a bank, broker, trustee or other nominee, you are considered the "beneficial owner" of shares of our common stock held in street name. In that case, this proxy statement has been forwarded to you by your bank, broker, trustee or other nominee who is considered, with respect to those shares of our common stock, the stockholder of record. As the

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beneficial owner, you have the right to direct your bank, broker, trustee or other nominee how to vote your shares by following their instructions for voting.

        Brokers who hold shares in street name for customers have the authority to vote on "routine" proposals when they have not received instructions from beneficial owners. However, brokers are precluded from exercising their voting discretion with respect to approving non-routine matters. All of the proposals to be presented at the special meeting are "non-routine" matters and, as a result, absent specific instructions from the beneficial owner of such shares of our common stock, brokers are not empowered to vote those shares of our common stock on the proposals. The failure of a stockholder who holds shares in "street name" through a broker or other nominee to give voting instructions to such broker or other nominee is referred to generally as broker non-votes. These broker non-votes will not be counted for purposes of determining a quorum, and will have the same effect as a vote "AGAINST" the sale and merger proposals presented at the special meeting.

        The proposal to adjourn the special meeting, if necessary, to solicit additional proxies requires the affirmative vote of the holders of a majority of the shares of our common stock present in person or represented by proxy and voting on the matter at the special meeting. For the proposal to adjourn the special meeting, if necessary, you may vote "FOR," "AGAINST," or "ABSTAIN." For purposes of this proposal, if your shares of our common stock are present at the special meeting but are not voted on this proposal, or if you have given a proxy and abstained on this proposal, this will not be counted in respect of, and will not have an effect on, the proposal to adjourn the special meeting. If you fail to submit a proxy or if your shares of our common stock are not present at the special meeting, or there are broker non-votes on the issue, as applicable, the shares of our common stock not voted will not be counted in respect of, and will not have an effect on, the proposal to adjourn the special meeting.

        If you are a stockholder of record, you may vote shares of our common stock or submit your proxy in any of the following ways:

    in person—you may attend the special meeting and cast your vote there;

    by proxy—stockholders of record can choose to submit a proxy by signing and dating the proxy card you receive and returning it in the enclosed pre-paid reply envelope;

    over the Internet—the website for submitting a proxy via the Internet is identified on your proxy card; or

    by using a toll-free telephone number—the telephone number for submitting proxy by telephone is identified on your proxy card.

        If you are a beneficial owner, you will receive instructions from your bank, broker, trustee or other nominee that you must follow in order to have your shares of our common stock voted. Those instructions will identify which of the above choices are available to you in order to have your shares voted. Please note that if you are a beneficial owner and wish to vote in person at the special meeting, you must provide a legal proxy from your bank, broker, trustee or other nominee.

        A control number, located on your proxy card, is designed to verify your identity and allow you to submit a proxy, and to confirm that your voting instructions have been properly recorded, when submitting a proxy over the Internet or by telephone. Please be aware that if you vote submit a proxy the Internet or by telephone, you may incur costs such as telephone and Internet access charges for which you will be responsible.

        Please refer to the instructions on your proxy or voting instruction card to determine the deadlines for submitting a proxy over the Internet or by telephone. If you choose to submit a proxy by mailing a proxy card, your proxy card must be received by the Corporate Secretary of the Company by the time the special meeting begins. Please do not send in your stock certificates with your proxy card.

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        If you submit a proxy, regardless of the method you choose to submit a proxy, the individuals named on the enclosed proxy card, and each of them, with full power of substitution, or your proxies, will vote your shares of our common stock in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify whether your shares of our common stock should be voted for or against, or to abstain from voting on all, some or none, of the specific items of business to come before the special meeting.

        If you properly sign and submit your proxy card but do not mark the boxes showing how your shares of our common stock should be voted on a matter, the shares of our common stock represented by your properly signed proxy will be voted "FOR" approval of the sale , "FOR" adoption of the merger agreement, "FOR" approval of the management retention compensation proposal and "FOR" approval of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the sale or to adopt the merger agreement.

        If you have any questions or need assistance voting your shares, please contact our proxy solicitor, Georgeson, by telephone toll-free at +1 (866) 821-2614 (banks, brokers, trustees or other nominees may call collect at +1 (781) 575-2137), or by email at CTCMEDIA@georgeson.com.

        IT IS IMPORTANT THAT YOU SUBMIT YOUR PROXY PROMPTLY. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY CARD IN THE ACCOMPANYING PRE-PAID REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. STOCKHOLDERS WHO ATTEND THE SPECIAL MEETING MAY REVOKE THEIR PROXIES AND VOTE BY BALLOT AT THE SPECIAL MEETING.

Proxies and Revocation

        Any stockholder of record entitled to vote at the special meeting may submit a proxy by telephone, over the Internet, or by returning the enclosed proxy card in the accompanying pre-paid reply envelope, or may vote in person at the special meeting. If your shares of our common stock are held in "street name" by your bank, broker, trustee or other nominee, you should instruct your bank, broker, trustee or other nominee on how to vote your shares of our common stock using the instructions provided by your bank, broker, trustee or other nominee. If you fail to submit a proxy or vote in person at the special meeting, or abstain, or you do not provide your bank, broker, trustee or other nominee with instructions, as applicable, your shares of our common stock will not be voted on the proposal to approve the sale or to adopt the merger agreement, which will have the same effect as a vote "AGAINST" approval of the sale and as a vote "AGAINST" the adoption of the merger agreement.

        You have the right to revoke a proxy, whether submitted over the Internet, by telephone or by mail, at any time before it is exercised, by submitting a later-dated proxy through any of the methods available to you, by giving written notice of revocation to our Corporate Secretary, which must be received by the Corporate Secretary by the time the special meeting begins, or by voting by ballot at the special meeting. Attending the special meeting, by itself, is not enough to revoke a proxy. If you are a beneficial owner and wish to revoke your voting instructions, you should follow the instructions provided by your bank, broker, trustee or other nominee.

Adjournments and Postponements

        Although it is not currently expected, the special meeting may be adjourned or postponed for the purpose of soliciting additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the sale agreement. Other than an announcement to be made at the special meeting of the time, date and place of an adjourned meeting, any adjournment may be made without notice (if the adjournment is not for more than 30 days and a new record date has not been

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fixed). Any adjournment or postponement of the special meeting for the purpose of soliciting additional proxies will allow our stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting if the special meeting is adjourned or postponed.

Anticipated Dates of Completion of the Sale and the Merger

        We are working towards completing each of the sale and the merger as soon as possible. Assuming timely satisfaction or waiver of conditions to the sale, we anticipate that the sale will be completed on December 21, 2015 or on such other date as may be mutually agreed by the parties to the sale agreement. See the section entitled "The Sale Agreement—When the Sale Will be Effective" beginning on page 79 of this proxy statement.

        Assuming the closing of the sale and the subsequent satisfaction of the conditions to the merger, including receipt of a license from OFAC, we anticipate that the merger will be completed in the first calendar quarter 2016, on a date to be determined by the Company and Merger Sub following the completion of the sale. See the sections entitled "The Merger Agreement—Closing" and "The Merger Agreement—Effective Time" beginning on page 93 of this proxy statement.

Rights of Stockholders Who Seek Appraisal

        If the sale is approved and the merger agreement is adopted by our stockholders, stockholders who do not vote in favor of the adoption of the merger agreement, who are entitled to appraisal rights under applicable law and who properly exercise and perfect their demand for appraisal of their shares of our common stock will be entitled to appraisal rights under Section 262 of the DGCL in connection with the merger. This means that stockholders who meet all requirements under Section 262 of the DGCL are entitled to receive payment in cash of the fair value of their shares of our common stock as determined by the Delaware Court of Chancery. Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined by Section 262 of the DGCL could be less than, equal to or more than the amount they would have received pursuant to the merger agreement if they did not seek appraisal of their shares.

        To exercise your appraisal rights, you must submit a written demand for appraisal to the Company before the vote is taken on the proposal to adopt the merger agreement, and you must not vote in favor of the proposal to adopt the merger agreement and you must continue to hold shares of our common stock of record through the effective time of the merger. Your failure to follow exactly the procedures specified under the DGCL may result in the loss of your appraisal rights. See the section entitled "Appraisal Rights" beginning on page 95, as well as the text of the Delaware appraisal rights statute reproduced in its entirety as Annex C to this proxy statement. If you hold your shares of our common stock through a bank, broker, trustee or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker, trustee or other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee. In view of the complexity of the procedures specified under the DGCL, stockholders who may wish to pursue appraisal rights should promptly consult their legal and financial advisors.

Solicitation of Proxies; Payment of Solicitation Expenses

        We have engaged Georgeson to assist in the solicitation of proxies for the special meeting. We estimate that we will pay Georgeson a fee of approximately $13,000, plus $5.00 per each call made to or received from our stockholders. We will reimburse Georgeson for reasonable out-of-pocket expenses, and will indemnify Georgeson and our affiliates against all losses, claims, damages, liabilities, disbursements and reasonable out-of-pocket expenses. We may also reimburse banks, brokers, trustees, nominees and other fiduciaries representing beneficial owners of shares of our common stock for their expenses in forwarding soliciting materials to beneficial owners of our common stock, and in obtaining

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voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Questions and Additional Information

        If you have more questions about how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact our proxy solicitor, Georgeson, by telephone toll-free at +1 (866) 821-2614 (banks, brokers, trustees or other nominees may call collect at +1 (781) 575-2137), or by email at CTCMEDIA@georgeson.com.

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PROPOSAL 1—THE SALE

        This discussion of the sale is qualified in its entirety by reference to the sale agreement, which is attached to this proxy statement as Annex A. You should read the entire sale agreement carefully, as it is the legal document that governs the sale.

        The sale agreement provides for the sale by our Company to UTV-Management of 75% of the participation interests in CTC Investments. In addition, we have agreed to approve the issuance by CTC Investments of an additional, new participation interest to UTV-Management or its affiliate following the closing of the sale, which would result in UTV-Management (together with its affiliate) holding 80% of CTC Investments to ensure compliance with the requirements of the Mass Media Law.

Consideration

        In exchange for the sale of the 75% participation interest in CTC Investments, UTV-Management will pay aggregate consideration of $200,540,000, referred to as the purchase price, less any shortfall in cash flow from operating and investing activities during the second half of 2015 compared with an agreed target for this period and subject to further adjustments described in the section entitled "The Sale Agreement—Consideration to be Received Pursuant to the Sale; Adjustments to the Purchase Price" beginning on page 80 of this proxy statement.

Background, Reasons and Recommendations

        See "Special Factors Related to the Transactions—Reasons for the Transactions; Recommendation of the Special Committee and Board of Directors; Fairness of the Transactions" beginning on page 39 of this proxy statement.

Analysis of Financial Advisor of the Special Committee—Xenon Capital Partners

        See "Special Factors Related to the Transactions—Analysis of Financial Advisor of the Special Committee—Xenon Capital Partners" beginning on page 46 of this proxy statement.

Certain Company Forecasts

        See "Special Factors Related to the TransactionsCertain Company Forecasts" beginning on page 55 of this proxy statement.

Financing of the Sale

        The sale is not conditioned upon the receipt of financing by UTV-Management.

Interests of Certain Persons in the Sale

        In considering the recommendation of our board of directors that you vote to approve the sale, you should be aware that certain of our directors and executive officers have financial interests in the sale that may be different from, or in addition to, those of us and our stockholders generally. Our board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the sale agreement and the sale, and in recommending that the sale agreement be approved by our stockholders.

Arrangements with the UTV-Management and CTC Investments

        As of the date of this proxy statement, we have been advised that no members of our current management team have entered into any agreement, arrangement or understanding with UTV-Management or its affiliates regarding employment with UTV-Management or its affiliates.

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        Certain members of our current management team may, following the consummation of the sale, continue to be employed by CTC Investments or its subsidiaries, and some of these members may enter into new arrangements with CTC Investments or its subsidiaries or with UTV-Management or its affiliates regarding future employment. Neither CTC Investments nor, to our knowledge, UTV-Management or its affiliates have entered into, or negotiated the terms of, any such arrangements with any members of our management, and UTV-Management's obligations to consummate the sale are not conditioned upon entry into any such arrangements with members of our management team.

        Except as disclosed in this proxy statement, there is no present or proposed material agreement, arrangement, understanding or relationship between UTV-Management or any of its executive officers, directors, controlling persons or subsidiaries, on the one hand, and us or any of our executive officers, directors, controlling persons or subsidiaries, on the other hand.

Accounting Treatment

        The sale will be accounted for as "discontinued operations" in the period in which such transaction is approved by both our board of directors and our stockholders and thus becomes probable.

Regulatory Approvals

        Completion of the sale is subject to clearance by the Russian Federal Antimonopoly Service, the Russian Government Commission on Strategic Foreign Investments and the Agency of the Republic of Kazakhstan for the Protection of Competition. In addition, we have conferred with OFAC regarding the sale, and have received informal guidance from OFAC that OFAC will not assert jurisdiction in respect of the sale.

        We believe that each of our directors and executive officers (except for those members of our board of directors originally designated by Telcrest, who have not stated their intentions) intend to vote all of their shares of common stock "FOR" approval of the sale. Our board of directors believes that the sale and the sale agreement are expedient and for the best interests of, and fair to, our Company and our stockholders and recommends that the stockholders approve the sale. Our board of directors recommends that you vote "FOR" the approval of the sale.

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THE SALE AGREEMENT

        The following summary describes the material terms of the sale agreement, but does not purport to describe all of the terms of the sale agreement. This summary of the sale agreement is qualified by reference to the full text of the sale agreement, a copy of which is attached as Annex A, and is incorporated by reference into this proxy statement. The sale agreement has been included to provide you with information regarding its terms. We encourage you to read the sale agreement carefully and in its entirety, because it is the legal document that governs the sale. It is not intended to provide you with any factual information about our Company. Such information can be found elsewhere in this proxy statement and in the public filings we make with the SEC, as described in the section entitled "Where You Can Find More Information," beginning on page 118 of this proxy statement.

Explanatory Note Regarding the Sale Agreement

        The sale agreement has been attached as Annex A to provide our stockholders with information regarding its terms. It is not intended to provide to any person not a party thereto any other factual information about our Company. The sale agreement contains representations and warranties of our Company, negotiated between our Company and UTV-Management and made as of specific dates solely for purposes of the sale agreement, including setting forth the respective rights of the parties with respect to their obligations to complete the sale. This description of the representations and warranties is not intended to provide any other factual information about our Company. The representations, warranties and covenants contained in the sale agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the sale agreement. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the sale agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the sale agreement, which subsequent information may or may not be fully reflected in our public disclosures. As a result, no person should rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of us or any of our subsidiaries or affiliates.

The Sale

        The sale agreement provides for the sale by us to UTV-Management of 75% of the participation interests in CTC Investments.

        In addition, in the sale agreement we have agreed to approve the issuance by CTC Investments of an additional, new participation interest in CTC Investments to UTV-Management or its affiliate following closing of the sale, which would result in UTV-Management (together with its affiliate) holding 80% of CTC Investments to ensure compliance with the requirements of the Mass Media Law. These participation interests would be issued in consideration of a promissory note to be issued by UTV-Management or its affiliate to CTC Investments. The promissory note would have the face value of approximately RUB 10,000,000,000, which has been determined on the basis of the value of the charter capital of CTC Investments, and would have a maturity of 15 years and interest rate of 10%.

When the Sale Will be Effective

        The closing of the sale will take place on December 21, 2015 or on such other date as may be mutually agreed by the parties, provided that the conditions to the closing of the sale, described in the

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section entitled "The Sale Agreement—Conditions to the Sale" beginning on page 87 of this proxy statement, have been each satisfied or waived.

Consideration to be Received Pursuant to the Sale; Adjustments to the Purchase Price

        UTV-Management will pay the purchase price, less an amount equal to any shortfall in cash flow from operating and investing activities during the second half of 2015 compared with an agreed target for this period, and subject to further adjustments described below. In addition, prior to closing, we currently expect to receive approximately $55,000,000 (net of Russian dividend withholding taxes) of available cash from the operating businesses. The purchase price will be payable as follows:

    $150,540,000 (subject to adjustments discussed below) will be paid at closing; and

    $50,000,000 will be held back by UTV-Management pending the calculation of any net cash flow shortfall described above and any application of the indemnity in respect of our overdraft loan facility discussed below. UTV-Management will then pay such amount (as may be reduced by such shortfall or application of the overdraft loan facility indemnity) no later than the 5th business day after such calculation (currently expected by February 1, 2016).

        The purchase price, less any net cash flow shortfall as described above, is subject to further adjustments. Adjustments (if any) are expected to be confirmed as at the 5th business day prior to the scheduled closing of the sale and are as follows:

    Programming Expenditure Adjustment

    o
    we will indemnify UTV-Management for the amount of any shortfall between the expected programming expenditures planned to be made in the period from June 30, 2015 to the closing of the sale and the actual amount of programming purchased plus cash retained by our subsidiaries;

    o
    expected programming expenditure for the period from June 30, 2015 to the closing of the sale is $23,499,649 in the case of programming to be paid in dollars and RUB 5,278,139,445 in the case of programming to be paid in Russian rubles; and

    o
    the potential purchase price adjustment in respect of programming expenditures will be equal to 75% of any such shortfall, denominated in US dollars.

    Kazakh Cash and Indebtedness Adjustment

    o
    The headline purchase price is based on certain anticipated levels of cash and indebtedness of our Kazakhstan subsidiaries. The purchase price will be reduced by 45% of any shortfall if, upon closing of the sale, the actual levels diverge from the assumed levels of cash and indebtedness.

    Cash Reserve Adjustment

    o
    It was agreed that $15,000,000 will be retained by our subsidiaries for working capital post-closing. If the cash reserve at closing is less than $15,000,000, the purchase price will be adjusted by an amount equal to 75% of any shortfall of such cash reserve.

    Litigation Indemnity Adjustment

    o
    In September 2015, CTC Network received a draft statement of claim to be filed with the Superior Court of Justice on Ontario, Canada, from Ethnic Channels Group Inc., which we refer to as ECG, for compensation of general damages in the amount of $3,000,000, as well as special damages (in the amount to be particularized prior to trial) under the exclusive agency agreement between CTC Network and ECG dated September 15, 2014. In the event there are any outstanding amounts as of the 5th business day prior to the scheduled closing

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      of the sale pursuant to claims asserted in the ongoing litigation, the purchase price will be adjusted downwards by the amount equal to 75% of such outstanding amounts.

Indemnities

        We have undertaken certain indemnity obligations in the sale agreement pursuant to which we will have to indemnify, defend and hold harmless UTV-Management, its affiliates and their respective employees, officers and directors from any losses they may suffer arising from:

    any breach of the critical warranties, described in the section entitled "The Sale Agreement—Representations and Warranties" beginning on page 81 of this proxy statement, and any breach of covenants under the sale agreement;

    any claim by any of our stockholders relating to the sale agreement or any transaction contemplated by the sale agreement;

    any unauthorized leakage of funds from our business;

    programming expenditures, Kazakh cash & indebtedness and cash reserve (in the event that the purchase price adjustments at the time of closing of the sale described above were insufficient to take account of the relevant shortfalls); and

    any indebtedness as of December 31, 2015 of our Company and our subsidiaries under the overdraft loan facility made available under a credit agreement with JSC Alfa-Bank with a maximum borrowing limit of RUB 600,000,000.

        Aside from any indemnity claims in respect of either breaches of the critical warranties or claims brought by stockholders, any and all indemnity claims of UTV-Management will have to be brought within the first 40 days following the closing of the sale. Any indemnity claims in respect of breaches of the critical warranties may be brought during the applicable statutes of limitation. Our overall liability in respect of any and all claims under the sale agreement is capped at the amount of the purchase price actually received by us.

Representations and Warranties

        We made certain representations and warranties in the sale agreement that are subject, in some cases, to specified exceptions and qualifications contained in the sale agreement, in the confidential disclosure schedules to the sale agreement or, subject to certain exceptions, in certain documents filed with the SEC. These representations and warranties relate to, among other things:

    our title to the participation interests in CTC Investments that we are selling;

    our filings with the SEC and the accuracy of information in those filings, including our financial statements;

    our corporate organization;

    our ownership of our subsidiaries;

    our authorization to execute and deliver the sale agreement;

    no consents being needed other than our stockholders' approval;

    the corporate documentation and minutes provided to purchaser;

    the capital structure of CTC Investments and our other subsidiaries;

    compliance with applicable laws and orders, no defaults under material contracts, and possession of permits by our subsidiaries;

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    no other third parties having equity interests in our subsidiaries;

    our financial statements;

    aggregate working capital of CTC Investments and its subsidiaries as of June 30, 2015 and July 31, 2015;

    the accuracy of our material accounting records and other statutory records;

    the solvency of our Company and of our subsidiaries;

    the conduct of our business and the business of CTC Investments and its subsidiaries in the ordinary course, and the absence of a material adverse effect with respect to our Company and our subsidiaries, since December 31, 2014;

    the absence of material litigation and other proceedings;

    matters relating to labor law compliance;

    matters relating to employee benefits;

    tax matters;

    matters relating to owned and leased real property of our subsidiaries;

    matters relating to machinery and equipment;

    intellectual property matters;

    our material contracts, the enforceability thereof and the performance of obligations thereunder;

    the absence of undisclosed material liabilities;

    environmental matters;

    insurance matters;

    our assets;

    the disclosure of related party transactions;

    our broadcasting, transmission and computer systems;

    the absence of any powers of attorney executed by our subsidiaries that are not held by their employees;

    the receipt by our board of directors of an informal recommendation from our financial advisor; and

    the due authorization of the contemplated further issuance of participation interests in CTC Investments to UTV-Management (or its affiliate).

        All of our representations and warranties other than critical warranties will terminate at, and do not survive, closing. The critical warranties will remain in full force and survive the closing. Critical warranties include:

    title;

    corporate organization;

    our subsidiaries;

    our authorization to execute and deliver the sale agreement;

    our capital structure and capital structure of CTC Investments and our other subsidiaries;

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    the absence of any conflict of the sale agreement with our organizational documents;

    the absence of any contracts with respect to shares in any of our subsidiaries or any rights of first refusal or pre-emptive rights in respect of participation interests in CTC Investments; and

    authorization of the contemplated further issuance of participation interests in CTC Investments to UTV-Management (or its affiliate).

        The sale agreement also contains representations and warranties made by UTV-Management that are subject, in some cases, to specified exceptions and qualifications contained in the sale agreement. The representations and warranties of UTV-Management relate to, among other things:

    the availability of financing necessary for UTV-Management to consummate the sale and the other transactions contemplated by the sale agreement;

    its organizational documents;

    its authorization to execute and deliver the sale agreement;

    its compliance with applicable laws and orders; and

    the accuracy of the statements and information supplied by UTV-Management to us for inclusion in this proxy statement.

Stockholders' Meeting

        We agreed to establish a record date for a meeting of our stockholders not later than within 5 business days following the date on which the SEC confirms that it either has no comments on this proxy statement, or does not intend to review this proxy statement. We further agreed to thereafter call, give notice of, convene and hold a meeting of our stockholders for the purpose of obtaining stockholder approval of the sale agreement. Subject to the provisions of the sale agreement described in the section entitled "The Sale Agreement—Restrictions on Solicitation of Takeover Proposals" beginning on page 86 of this proxy statement, our board of directors will recommend that our stockholders vote to approve the sale. Our board of directors, except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy, has agreed not to:

    withdraw (or qualify or modify in any manner materially adverse to UTV-Management), or publicly propose to withdraw (or so qualify or modify), its recommendation to approve the sale,

    fail to publicly reaffirm its recommendation to approve the sale within 10 days after UTV-Management so requests in writing (which request may only be made once with respect to each acquisition proposal and each material modification thereto),

    fail to recommend, in a solicitation/recommendation statement on Schedule 14D-9, against any acquisition proposal (as defined below in the section entitled "The Sale Agreement—Restrictions on Solicitation of Takeover Proposals" beginning on page 86 of this proxy statement) subject to Regulation 14D under the Exchange Act within 10 days after the commencement of such acquisition proposal,

    approve, adopt or recommend any acquisition proposal or any acquisition agreement pursuant to such acquisition proposal,

    propose publicly to approve, adopt or recommend, any acquisition proposal or any acquisition agreement or an arrangement pursuant to such acquisition proposal,

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    publicly announce that an acquisition proposal constitutes a superior proposal (as defined below in the section entitled "The Sale Agreement—Restrictions on Solicitation of Takeover Proposals" beginning on page 86 of this proxy statement), or

    allow our Company or any of its subsidiaries to execute or enter into any agreement or arrangement with any third party relating to any acquisition proposal, or requiring, or which would reasonably be expected to cause, our Company to abandon, terminate, materially delay or fail to consummate, the sale,

        other than in the process of taking and disclosing any position or disclosing any information required under Rule 14d-9 or Rule 14e-2 of the Exchange Act or making any "stop, look and listen" communication to our stockholders pursuant to Rule 14d-9(f) of the Exchange Act. Notwithstanding the above, however, at any time prior to our stockholders approving the sale, in the event a material development or material change in circumstances (other than an acquisition proposal) becomes known by our board of directors, our board of directors may withdraw or publicly propose to withdraw, or qualify or modify in any manner materially adverse to UTV-Management its recommendation to approve the sale or fail to publicly reaffirm its recommendation to approve the sale within 10 days after UTV-Management so requests in writing, if our board of directors determines in good faith that the failure to take such action would be reasonably likely to be inconsistent with the directors' fiduciary duties to our stockholders applicable law; provided, that (i) our Company has provided UTV-Management 8 days prior written notice advising UTV-Management that it intends to take such action and specifying, in reasonable detail, the reasons for such action and (ii) prior to such change in recommendation, our Company will, and will direct our legal advisors and the special committee's financial advisors to, during such 8-calendar-day period, negotiate with UTV-Management in good faith to make such adjustments in the terms and conditions of the sale agreement that would allow our board of directors not to make such change in recommendation consistent with its fiduciary duties. We may adjourn, recess or postpone the stockholders' meeting with the consent of UTV-Management, to the extent necessary to ensure that any required supplement or amendment to this proxy statement is filed and provided to our stockholders, or if, as of the time for which the stockholders' meeting is originally scheduled, there are insufficient shares of our common stock represented to constitute a majority of the outstanding shares of our common stock.

Conduct of CTC Investment's Business Pending the Sale

        Under the sale agreement, we have, subject to certain exceptions in the sale agreement, agreed to certain restrictions on the operation of the business of CTC Investments and our other subsidiaries until either the closing date of the sale or the termination of the sale agreement pursuant to its terms, unless UTV-Management gives its prior consent. In general, we have agreed to conduct our business in the ordinary course and to use reasonable best efforts to preserve our present relationships with governmental authorities, customers, suppliers, licensors, licensees, distributors, wholesalers, lessors and others having significant business dealings with us and our subsidiaries.

        In addition, we have agreed that, among other things and subject to certain exceptions, we must cause CTC Investments and its subsidiaries not to, without UTV-Management's prior consent:

    amend their organizational documents;

    declare, authorize, set aside or pay any dividends, other than as specifically outlined by the sale agreement;

    split, combine or reclassify any of their capital stock or issue or grant any capital stock or other securities or other rights to acquire or receive any such capital stock or other securities;

    repurchase, redeem or otherwise acquire any of their capital stock or other securities or rights;

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    incur, assume, guarantee or become obligated for any indebtedness;

    increase rate of compensation or other benefits payable or provided to any of their current or former directors, officers or employees, which we refer to as a service provider;

    grant any equity or equity-based awards, other than permitted equity-based awards disclosed in the sale agreement;

    adopt or amend, modify or terminate any employee benefit plan;

    make any bonus, profit sharing, pension, severance or termination pay, retirement or insurance payment, distribution or arrangement to or with any service provider or any of its subsidiaries except for payments that were already accrued prior to the date of the sale agreement and were disclosed to the purchaser;

    enter into, terminate or renew any employment agreement with any service provider of any of its subsidiaries in the case of any employment agreement which contemplates annual remuneration in excess of RUB 5,000,000;

    enter into any new, or amend any existing, collective bargaining agreement covering any service provider of any of its subsidiaries or increase the aggregate employee headcount of the subsidiaries as of the date hereof;

    acquire or purchase any ownership interests, or make any investment in another entity;

    sell, lease, license or otherwise dispose of or subject to any lien any material assets of our subsidiaries, except for those with a value of less than of RUB 50,000,000, in the aggregate; or other than pursuant to an existing disclosed material contract;

    sell, lease, license or otherwise dispose of or subject to any lien any intellectual property;

    make any loans or advances to any person (other than to another subsidiary of the Company);

    adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

    cancel, modify, terminate or grant a waiver under any of their material contracts, or enter into a material contract or a contract that contains a change of control provision in favor of the other party;

    merge or consolidate with any person;

    make any expenditures that exceed singly or in aggregate RUB 50,000,000, other than those set forth in the subsidiaries' cash flow budgets;

    make any changes in any method of tax or financial accounting or, subject to certain exceptions, make or change any material tax election;

    file any material amended tax return, settle or compromise any material tax liability, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of material taxes, enter into any closing agreement with respect to any material tax or surrender any right to claim a material tax refund;

    enter into a material new line of business; or

    agree in writing to take any of the foregoing actions.

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Restrictions on Solicitation of Takeover Proposals

        We have agreed that prior to the effective time of the sale, we and our subsidiaries will not, and we will not authorize or permit our representatives to, directly or indirectly:

    initiate, solicit, knowingly encourage or facilitate any inquiry, proposal or offer that would reasonably be expected to lead to an acquisition proposal; or

    engage in or participate in any discussions or negotiations with, or furnish any non-public information concerning our Company that would reasonably be expected to lead to, any acquisition proposal.

        We are required to provide UTV-Management with prompt written notice (and in any event within 24 hours of receipt) of any acquisition proposal or any inquiries, which notice shall include a copy of any written proposal and the material terms and conditions of any such acquisition proposal, including the identity of the party making such proposals. We are also required to keep UTV-Management reasonably informed of the status and material changes regarding any acquisition proposal.

        If our board of directors receives an unsolicited written acquisition proposal and determines in good faith that it constitutes a superior proposal, and we have complied with certain obligations under the sale agreement, then our board of directors will be permitted to terminate the sale agreement and enter into an agreement with respect to the superior proposal, provided that (i) such agreement is entered into concurrently with termination of the sale agreement, (ii) we complied with our obligation to notify UTV-Management of the acquisition proposal, (iii) we terminated the sale agreement pursuant to its terms and (iv) we paid a termination fee of $5,000,000 and reimbursed UTV-Management's out-of-pocket expenses.

        In addition, if UTV-Management is notified by us that our board of directors intends to terminate the sale agreement, UTV-Management will have eight days, following receipt of such notice, to propose adjustments to the sale agreement, and we will be required to consider the terms of such adjustments and determine whether such adjustments would permit us or our board of directors not to terminate the sale agreement for a superior proposal.

        The sale agreement defines "acquisition proposal" and "superior proposal" as follows:

    "acquisition proposal" means any bona fide proposal or offer (other than a proposal or offer by UTV-Management or any of its affiliates) from a third party relating to (i) a merger, reorganization, sale of assets, share exchange, consolidation, business combination, recapitalization, dissolution, liquidation, joint venture or similar transaction that, if consummated, would result in any person other than (x) our Company or (y) UTV-Management owning, directly or indirectly, any of the equity interests of any of our subsidiaries held as of the date of the sale agreement directly or indirectly by our Company; (ii) the acquisition in any manner, directly or indirectly, by any third party of beneficial ownership of any of the equity interests of any of our subsidiaries; (iii) any purchase, acquisition, tender offer or exchange offer that, if consummated, would result in any third party beneficially owning any of the equity interests of any of our subsidiaries, (iv) the acquisition (whether by merger, consolidation, equity investment, joint venture or otherwise) by any third party of any of the assets of any of our subsidiaries (other than in the ordinary course of business); or (v) any combination of the foregoing.

    "superior proposal" means an acquisition proposal made by a third party as to which our board of directors determines in good faith, and considering such factors as our board of directors considers in good faith to be appropriate, is on terms that are superior to our Company than the transactions contemplated by the sale agreement.

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        Except as contemplated above, our board of directors may not (i) withdraw (or qualify or modify in any manner materially adverse to UTV-Management), or publicly propose to withdraw (or so qualify or modify), its recommendation, (ii) fail to publicly reaffirm its recommendation within 10 days after UTV-Management so requests in writing (which request may only be made once with respect to each acquisition proposal and each material modification thereto), (iii) fail to recommend, in a solicitation/recommendation statement on Schedule 14D-9, against any acquisition proposal subject to Regulation 14D under the Exchange Act within 10 days after the commencement of such acquisition proposal, (iv) approve, adopt or recommend any acquisition proposal or alternative acquisition agreement or propose publicly to approve, adopt or recommend, any acquisition proposal or alternative acquisition agreement, or (v) publicly announce that an acquisition proposal constitutes a superior proposal. Notwithstanding the above, however, at any time prior to our stockholders approving the sale, in the event a material development or material change in circumstances (other than an acquisition proposal) becomes known by our board of directors, our board of directors may withdraw or publicly propose to withdraw, or qualify or modify in any manner materially adverse to UTV-Management its recommendation to approve the sale or fail to publicly reaffirm its recommendation to approve the sale within 10 days after UTV-Management so requests in writing, if our board of directors determines in good faith that the failure to take such action would be reasonably likely to be inconsistent with the directors' fiduciary duties to our stockholders applicable law; provided that (a) our Company has provided UTV-Management 8 days' prior written notice advising UTV-Management that it intends to take such action and specifying, in reasonable detail, the reasons for such action and (b) prior to such change in recommendation, our Company will, and will direct our legal advisors and the special committee's financial advisors to, during such 8-calendar-day period, negotiate with UTV-Management in good faith to make such adjustments in the terms and conditions of the sale agreement that would allow our board of directors not to make such change in recommendation consistent with its fiduciary duties.

Agreement to Use Best Reasonable Efforts

        We and UTV-Management will cooperate and use our respective best reasonable efforts to take or cause to be taken as soon as reasonably practicable all actions, and will do or cause to be done all things reasonably necessary for purpose of carrying at the intent of the sale agreement and the transactions contemplated by the sale agreement.

Conditions to the Sale

Mutual Conditions

        The respective obligations of us and UTV-Management to effect the sale are subject to the satisfaction or waiver, if permissible under applicable law, of the following conditions:

    the approval of the sale by holders of a majority of the outstanding shares of our common stock; and

    the absence of any law or any temporary, preliminary or permanent restraining order, decree or ruling making illegal or otherwise preventing the consummation of the sale.

Conditions to UTV-Management's Obligations

        The obligations of UTV-Management to effect the sale are also subject to the satisfaction or waiver, if permissible under applicable law, of the following additional conditions:

    All of our representations and warranties being true and correct, except where the failure of such representations and warranties to be so true and correct has not resulted and is not

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      reasonably likely to result in a loss to our subsidiaries in excess of $10,000,000 or otherwise in a material adverse effect with respect to CTC Investments and its subsidiaries;

    No material adverse effect having occurred;

    Our having performed all covenants required to be performed by us under the sale agreement at or prior to the closing;

    Our having executed and delivered transaction documents to be entered into pursuant to the sale agreement;

    Approvals by the competition authorities in Russia and Kazakhstan and an approval pursuant to Russian Foreign Strategic Investment Law having been received;

    The new charter of CTC Investments being adopted and properly registered;

    Confirmation of cash reserves in the amount of $15,000,000 and our Kazakhstan subsidiaries holding cash in the amount of $2,700,000;

    Aggregate working capital of CTC Investments and its subsidiaries, in the view of UTV-Management (acting in good faith) and in light of information received, being not reasonably likely to be below RUB 10,648,000,000 as of December 31, 2015;

    The amount outstanding under our overdraft facility being not more than RUB 600,000,000 and our subsidiaries having no other indebtedness except for the agreed level of indebtedness at our Kazakhstan subsidiaries;

    In respect of certain contracts that have change of control provisions, third party consents having been obtained; and

    All guaranties by CTC Investments in respect of our management incentive plan being released prior to closing.

        For purposes of the sale agreement, "material adverse effect" means any event, occurrence, fact, condition or change that is, individually or in the aggregate, materially adverse to (i) the business, condition (financial or otherwise), revenues, properties, assets, liabilities, operations, prospects or results of operations of the subsidiaries, taken as a whole, or (ii) our ability to consummate the transactions contemplated by the sale agreement or to perform its express obligations under any transaction document entered into pursuant to the sale agreement; provided, however, that none of the following will constitute or be considered in determining whether there has been a material adverse effect:

    any change in United States generally accepted accounting principles or any change relating to or arising from the execution of the sale agreement or any transaction document entered into pursuant to the sale agreement or the announcement of the transactions contemplated by the sale agreement or by other transaction documents;

    any breach by UTV-Management of any provision of the sale agreement or any transaction document; or

    any action required to be taken under the sale agreement or taken at the request or with the written consent of UTV-Management.

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Conditions to the Company's Obligations

        Our obligation to effect the sale is subject to the satisfaction or waiver, if permissible under applicable law, of the following additional conditions:

    all representations and warranties of UTV-Management being true and correct, except where the failure of such representations and warranties to be so true and correct does not materially and adversely affect the ability of UTV-Management to consummate the transaction contemplated by the sale agreement;

    UTV-Management having performed all covenants required to be performed by it under the sale agreement at or prior to closing;

    UTV-Management having executed and delivered the transaction documents to be entered into pursuant to the sale agreement; and

    our subsidiaries having paid dividends to our Company in the amount of approximately $55,000,000.

Termination

        We and UTV-Management may, by mutual written agreement, terminate the sale agreement and abandon the sale at any time prior to the effective time of the sale, whether before or after the adoption of the sale agreement by our stockholders.

        The sale agreement may also be terminated and the sale abandoned at any time prior to the effective time of the sale, as follows:

    by either us or UTV-Management:

    o
    if the sale has not been consummated on or before December 30, 2015; provided that this right to terminate will not be available to a party if the failure to consummate the sale on or before December 30, 2015 was primarily due to that party's failure to perform any of its obligations under the sale agreement;

    o
    if the material transactions contemplated by the sale are permanently restrained, enjoined or otherwise prohibited by a governmental authority; or

    o
    if our stockholders' meeting has been held and completed and our stockholders have not adopted the sale agreement at such meeting or any adjournment or postponement of such meeting.

    by UTV-Management:

    o
    if we have breached or failed to perform any of our representations, warranties, covenants or other obligations in the sale agreement, which breach or failure to perform would give rise to a failure of the condition to UTV-Management's obligation to consummate the sale and such breach or failure cannot be cured by us by December 30, 2015 or (if capable of being cured) shall not have been cured within 10 days following receipt of written notice from UTV-Management of such breach or failure; provided that UTV-Management cannot terminate for breach if it is then in material breach of any of its warranties, agreements, covenants or obligations under the sale agreement;

    o
    if at any time prior to stockholder approval, our board of directors (a) changes or notifies UTV-Management that it intends to change its recommendation that the stockholders adopt the sale agreement, (b) we have intentionally breached our obligations described in the section entitled "The Sale Agreement—Restrictions on Solicitation of Takeover Proposals" beginning on page 86 of this proxy statement in any material respect provided that, if

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      capable of being cured, such breach shall not have been cured within ten days following receipt of written notice from UTV-Management of such breach, or (c) we have failed to include our recommendation in this proxy statement;

      o
      if after the date of the sale agreement, there is a material adverse effect; or

      o
      if matters that are the subject of any supplemental disclosure at closing would reasonably be expected to result in a loss to our subsidiaries in excess of $10,000,000 or otherwise in a material adverse effect.

    by us:

    o
    if UTV-Management has breached or failed to perform any of its representations, warranties, covenants or agreements in the sale agreement, which breach or failure to perform would give rise to a failure of a condition to our obligation to consummate the sale, and such breach or failure cannot be cured by UTV-Management by December 30, 2015 or (if capable of being cured) shall not have been cured within ten days following receipt of written notice from us of such breach or failure; provided that we cannot terminate for breach if we are then in material breach of any of our warranties, agreements, covenants or obligations under the sale agreement; or

    o
    if at any time prior to stockholder approval, we have determined to enter an agreement with respect to into a superior proposal in accordance with our obligations described in the section entitled "The Sale Agreement—Restrictions on Solicitation of Takeover Proposals" beginning on page 86 of this proxy statement; provided that, concurrently with such termination, we pay UTV-Management the termination fee described in the section entitled "The Sale Agreement—Termination Fees" beginning on page 90 of this proxy statement and enter into such superior proposal.

Effect of Termination

        In the event of the termination of the sale agreement, written notice must be given to the other parties specifying the provision pursuant to which such termination is made. The parties will have no further liability or obligation under the sale agreement except in respect of claims which arose before or gave rise to the termination.

Termination Fees

        If the sale agreement is terminated in certain circumstances described under "The Sale Agreement—Termination" beginning on page 89 of this proxy statement, we are obligated to pay a termination fee of $5,000,000. In the event that the stockholders do not vote in favor of the sale, we are obligated to pay a "no vote" fee of $2,600,000. In each such case, in addition, we are also obligated to reimburse UTV-Management's out-of-pocket expenses.

        We will be obligated to pay by wire transfer, the termination fee or the no vote fee not later than the second business day following such termination.

Remedies

        We and UTV-Management are entitled to injunctions to prevent breaches of the sale agreement and to specifically enforce the terms and provisions of the sale agreement, in addition to any other remedy to which they are entitled at law or in equity.

        Where the termination fee and UTV-Management's expenses are payable under the sale agreement, UTV-Management's receipt of a termination fee and UTV-Management's expenses will be the sole and exclusive remedy of UTV-Management against our Company and any of our former,

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current and future affiliates, and each of their respective directors, officers, employees, stockholders, controlling persons or representatives, for any loss or damage in connection with the sale agreement, the negotiation, execution or performance thereof, or the sale. In no event we shall be required to pay the termination fee on more than one occasion. In the event that a no vote fee has already been paid, we shall be entitled to credit the amount of the no vote fee actually paid against the amount of the termination fee we are required to pay under the sale agreement, if any.

Amendment or Supplement

        At any time prior to the effective time of the sale, the parties to the sale agreement may amend or supplement the sale agreement, whether before or after the stockholder approval, by written agreement of the parties and by action of their respective boards of directors. However, following stockholder approval, the parties may not amend the provisions of the sale agreement in any manner which would require further approval by our stockholders under applicable law without such approval.

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PROPOSAL 2—THE MERGER

        Upon the consummation of the merger, which will not be undertaken until a date determined by us and Merger Sub following the consummation of the sale, Merger Sub will merge with and into the Company, with the Company surviving and each holder of our common stock as of the effective time of the merger, other than shares of our common stock held by stockholders who have properly demanded appraisal rights under the DGCL with respect to such shares, if any, and shares of our common stock owned by the Telcrest or by our Company or any of its direct or indirect wholly owned subsidiaries, becoming entitled to receive the merger consideration. Following the merger, we will cease to be a publicly traded company. If the merger is completed, you will not own any shares of the capital stock of the surviving corporation. Assuming timely satisfaction of necessary closing conditions, including receipt of a license from OFAC, we anticipate that the merger will be completed in the first quarter of calendar year 2016.

Merger Consideration

        In the merger, each outstanding share of our common stock (other than shares of our common stock held by stockholders who have properly demanded appraisal rights under the DGCL with respect to such shares, if any, and shares of our common stock owned by the Telcrest or by our Company or any of its direct or indirect wholly owned subsidiaries) will be converted into the right to receive the per share merger consideration in cash, without interest, less any applicable withholding taxes. The merger consideration will be between $1.77 and $2.19 per share in cash. The minimum merger consideration of $1.77 per share reflects the maximum potential reduction in the purchase price adjustment pursuant to the terms of the sale agreement, and the actual amount of such consideration will depend on the operating performance of our business during the second half of 2015 and the anticipated cash reserves that will be appropriate in light of potential liabilities at the time of closing. If our available cash at the effective time of the merger is insufficient to distribute merger consideration of at least $1.77 per share, we will resolicit stockholder approval for the proposed transactions. Otherwise, we may consummate the sale and the merger if our board of directors determines that all applicable conditions have been satisfied and the merger consideration is at least $1.77 per share.

Background, Reasons and Recommendations

        See "Special Factors Related to the Transactions—Reasons for the Transactions; Recommendation of the Special Committee and Board of Directors; Fairness of the Transactions" beginning on page 40 of this proxy statement.

Interests of Certain Persons in the Merger

        See "Special Factors Related to the Transactions—Effects of the Merger—Interests of Certain Persons in the Merger" beginning on page 57 of this proxy statement.

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THE MERGER AGREEMENT

        The following summary describes the material terms of the merger agreement, but does not purport to describe all of the terms of the merger agreement. This summary of the merger agreement is qualified by reference to the full text of the merger agreement, a copy of which is attached as Annex B, and is incorporated by reference into this proxy statement. The merger agreement has been included to provide you with information regarding its terms. We encourage you to read the merger agreement carefully and in its entirety, because it is the legal document that governs the merger. It is not intended to provide you with any factual information about our Company. Such information can be found elsewhere in this proxy statement and in the public filings we make with the SEC, as described in the section entitled "Where You Can Find More Information," beginning on page 118 of this proxy statement.

The Merger

        The merger agreement provides for the merger of Merger Sub with and into our Company upon the terms and subject to the conditions set forth in the merger agreement. As the surviving corporation, our Company will continue to exist following the merger.

Closing

        We and Merger Sub will determine a date on which the closing of the merger will take place. Such date will be a date following the date on which the conditions to the closing of the merger (described in the section entitled "The Merger Agreement—Conditions to the Merger" beginning on page 93 of this proxy statement) have been satisfied or waived (other than the conditions that by their nature are to be satisfied at the closing of the sale, but subject to the fulfilment or waiver of those conditions), unless another date is agreed to in writing by Merger Sub and us.

Effective Time

        The effective time of the merger will occur upon such time as the surviving entity files a certificate of merger with the Secretary of State of the State of Delaware, or any later time set forth in that certificate.

Conditions to the Merger

        The respective obligations of our Company and Merger Sub to consummate the merger are subject to the satisfaction (or waiver, if permissible under applicable law) of the following conditions:

    either (i) the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon (which outstanding shares include those held by Telcrest) or (ii) if our board determines at or prior to our special meeting of the stockholders that the shares of common stock held by Telcrest have remained beneficially owned by Telcrest and that such shares are not blocked property pursuant to applicable sanctions, then the approval of (a) Telcrest and (b) at least a majority of the holders of the outstanding shares of our common stock that are not beneficially owned by Telcrest;

    the final determination of the consideration payable in respect of the sale;

    the granting by OFAC of a license permitting the merger;

    the absence of any temporary restraining order, preliminary or permanent injunction or other order issued by any Federal, state or local government administrative agency, commission or other governmental authority or agency or other legal restraint or prohibition having the effect of preventing or prohibiting the consummation of the merger; and

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    the absence of any statute, rule, order or regulation enacted or promulgated by any Federal, state or local government administrative agency, commission or other governmental authority or agency of competent jurisdiction having the effect of prohibiting the consummation of the merger.

Termination

        We and Merger Sub may terminate the merger agreement by mutual written consent of us and Merger Sub at any time before consummation of the merger. Additionally, either we or Merger Sub may terminate the merger agreement at any time before the consummation of the merger if following a vote on the adoption of the merger agreement at a meeting of the stockholders, or any postponement or adjournment of such meeting, the merger agreement is not adopted by the approval of at least a majority in voting power of the outstanding shares of common stock.

Amendment

        At any time prior to the effective time of the merger, the parties to the merger agreement may amend the merger agreement, whether before or after the stockholder approval, by written agreement of the parties and by action of their respective boards of directors. However, following stockholder approval, the parties may not amend the provisions of the merger agreement in any manner which would require further approval by our stockholders under applicable law without obtaining or conditioning the effectiveness of such amendment on obtaining such approval.

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APPRAISAL RIGHTS

        Stockholders who are entitled to appraisal rights under applicable law and comply with the provisions of Section 262 of the DGCL, or Section 262, are entitled to seek appraisal of their shares of our common stock and, if the merger is completed, to receive payment in cash for the fair value of their shares of our common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, as determined by the Delaware Court of Chancery, together with interest, if any, to be paid upon the amount determined to be fair value. The "fair value" of your shares of our common stock as determined by the Delaware Court of Chancery may be more or less than, or the same as, the per share amount that you are otherwise entitled to receive under the terms of the merger agreement. These rights are known as appraisal rights. Our stockholders who elect to exercise appraisal rights must not vote in favor of the proposal to adopt the merger agreement, must continuously be the record holders of their shares through the effective time of the merger and must comply with the provisions of Section 262 in order to perfect their appraisal rights. Strict compliance with the statutory procedures in Section 262 is required. Failure to follow precisely any of the statutory requirements may result in the loss of your appraisal rights.

        This section is intended as a brief summary of the material provisions of the Delaware statutory procedures that a stockholder must follow in order to seek and perfect appraisal rights. This summary, however, is not a complete statement of all applicable requirements, and it is qualified by reference to Section 262, the full text of which appears in Annex C to this proxy statement. The following summary does not constitute any legal or other advice, nor does it constitute a recommendation that stockholders exercise their appraisal rights under Section 262.

        Section 262 requires that, where a merger agreement is to be submitted for adoption at a meeting of stockholders, the corporation, not less than 20 days before the stockholder meeting to vote on the merger, shall notify each of its stockholders that appraisal rights are available. A copy of Section 262 must be included with such notice. This proxy statement constitutes our notice to our stockholders that appraisal rights are available in connection with the merger, in compliance with the requirements of Section 262 and the full text of Section 262 is attached to this proxy statement at Annex C. If you wish to consider exercising your appraisal rights, you should carefully review the text of Section 262 contained in Annex C to this proxy statement. Failure to comply timely and properly with the requirements of Section 262 will result in the loss of your appraisal rights under the DGCL. A stockholder who loses his, her or its appraisal rights will be entitled to receive the per share merger consideration described in the merger agreement. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of common stock, the Company believes that if a stockholder considers exercising such rights, such stockholder should seek the advice of legal counsel.

        If you elect to demand appraisal of your shares of our common stock, you must satisfy each of the following conditions:

    you must deliver to us a written demand for appraisal of your shares of our common stock before the vote is taken on the proposal to adopt the merger agreement at the special meeting, which written demand must reasonably inform us of the identity of the holder of record of our common stock who intends to demand appraisal of his, her or its shares of our common stock and that such holder intends thereby to demand appraisal of his, her or its shares;

    you must not vote in favor of the proposal to adopt the merger agreement. Because a proxy received that does not contain voting instructions will, unless revoked, be voted in favor of the merger agreement, a stockholder who votes by proxy and who wishes to exercise appraisal rights must vote against the proposal to adopt the merger agreement or abstain;

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    you must continuously hold the shares from the date of making the demand through the effective time of the merger. A stockholder will lose appraisal rights if the stockholder transfers the shares before the effective time of the merger; and

    you or the surviving company must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares within 120 days after the effective time of the merger. The surviving company is under no obligation to file any petition and has no intention of doing so.

        If you fail to comply with any of these conditions and the merger is completed, you will be entitled to receive payment for your shares of our common stock as provided for in the merger agreement. A holder of shares of our common stock wishing to exercise appraisal rights must hold of record the shares of our common stock on the date the written demand for appraisal is made and must continue to hold the shares of our common stock of record through the effective time of the merger, because appraisal rights will be lost if the shares of our common stock are transferred prior to the effective time of the merger. Voting against or failing to vote for the proposal to adopt the merger agreement by itself does not constitute a demand for appraisal within the meaning of Section 262. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted in favor of the proposal to adopt the merger agreement, and it will constitute a waiver of the stockholder's right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must either submit a proxy containing instructions to vote against the proposal to adopt the merger agreement or abstain from voting on the proposal to adopt the merger agreement. The written demand for appraisal must be in addition to and separate from any proxy or vote on the proposal to adopt the merger agreement. A stockholder's failure to make the written demand prior to the taking of the vote on the proposal to adopt the merger agreement at the special meeting will constitute a waiver of appraisal rights.

        All demands for appraisal should be addressed to CTC Media, Inc., 31A Leningradsky Prospekt, Moscow, 125284 Russia, Attention: Corporate Secretary, and must be delivered before the stockholder vote is taken on the proposal to adopt the merger agreement at the special meeting, and should be executed by, or on behalf of, the record holder of the shares of our common stock. The demand must reasonably inform us of the identity of the stockholder and the intention of the stockholder to demand appraisal of his, her or its shares of our common stock.

        To be effective, a demand for appraisal by a stockholder of our common stock must be made by, or in the name of, the registered stockholder. The demand cannot be made by the beneficial owner if he or she does not also hold the shares of our common stock of record. The beneficial holder must, in such cases, have the registered owner, such as a bank, broker, trustee or other nominee, submit the required demand in respect of those shares of our common stock. If you hold your shares of our common stock through a bank, broker, trustee or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker, trustee or other nominee to determine the appropriate procedures for the making of a demand for appraisal by the bank, broker, trustee or other nominee. A person having a beneficial interest in shares held of record in the name of another person, such as a broker, bank or other nominee, must act promptly to cause the record holder to follow property and in a timely manner the steps necessary to perfect appraisal rights.

        If shares of our common stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal should be made in that capacity. If the shares of our common stock are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or for all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner.

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A record owner, such as a broker, who holds shares of our common stock as a nominee for others, may exercise his or her right of appraisal with respect to the shares of our common stock held for one or more beneficial owners, while not exercising this right for other beneficial owners. In that case, the written demand should state the number of shares of our common stock as to which appraisal is sought. Where no number of shares of our common stock is expressly mentioned, the demand will be presumed to cover all shares of our common stock held in the name of the record owner.

        Within ten days after the effective date of the merger, the surviving corporation in the merger must give written notice that the merger has become effective and the effective date thereof to each of our stockholders who has properly filed a written demand for appraisal and who did not vote in favor of the proposal to adopt the merger agreement. At any time within 60 days after the effective time of the merger, any stockholder who has not commenced an appraisal proceeding or joined a proceeding as a named party may withdraw the demand for appraisal and accept the merger consideration. However, any attempt to withdraw the demand for appraisal made more than 60 days after the effective time of the merger will require written approval of the surviving corporation. No appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, with approval conditioned upon the terms as the Court deems just. However, notwithstanding the foregoing, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party may withdraw such stockholder's demand for appraisal and accept the terms offered upon the merger within 60 days after the effective time.

        Within 120 days after the effective date of the merger, either the surviving corporation or any stockholder who has complied with the requirements of Section 262 and is entitled to appraisal rights under Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares of our common stock held by all stockholders entitled to appraisal. Upon the filing of the petition by a stockholder, service of a copy of the petition must be made upon the surviving corporation. The surviving corporation has no obligation to and has not present intention to file a petition, and holders should not assume that the surviving corporation will file a petition. Accordingly, any stockholders who desire to have their shares appraised should initiate all necessary action to perfect their appraisal rights in respect of shares of our common stock within the time and in the manner prescribed in Section 262. The failure of a stockholder to file a petition within the period specified could nullify the stockholder's previous written demand for appraisal. In addition, within 120 days after the effective date of the merger, any stockholder who complied with the requirements of Section 262, upon written request, will be entitled to receive from the surviving corporation, a statement setting forth the aggregate number of shares of our common stock not voted in favor of the proposal to adopt the merger agreement and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares of our common stock. The statement must be mailed to the requesting stockholder within ten days after written request has been received by the surviving corporation or within ten days after expiration of the period for delivery of demands for appraisal, whichever is later. A person who is the beneficial owner of shares of our common stock held either in a voting trust or by a nominee on behalf of a person may, in the person's own name, file a petition or request from the surviving corporation the statement.

        If a petition for appraisal is duly filed by a stockholder and a copy of the petition is delivered to the surviving corporation, then the surviving corporation must, within 20 days after receiving service of a copy of the petition, file with the Delaware Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares of our common stock and with whom agreements as to the value of their shares of our common stock have not been reached. After the Delaware Register in Chancery gives notice of the time and place of the hearing to stockholders who have demanded appraisal, if notice is ordered by the Delaware Court of Chancery, the Delaware Court of Chancery is empowered to conduct a hearing upon the petition and to determine those stockholders who have complied with Section 262 and who

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have become entitled to the appraisal rights provided by Section 262. The Delaware Court of Chancery may require stockholders who have demanded payment for their shares of our common stock to submit their stock certificate(s) to the Delaware Register in Chancery for notation of the pendency of the appraisal proceedings, and if any stockholder fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to that stockholder.

        After determination of the stockholders entitled to appraisal of their shares of our common stock, the Delaware Court of Chancery will appraise the shares of our common stock, determining their fair value as of the effective time of the merger after taking into account all relevant factors exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value. When the value is determined, the Delaware Court of Chancery will direct the payment of value upon surrender by those stockholders of the certificate(s) representing their shares of our common stock. Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective time of the merger and the date of payment of the judgment.

        Although we believe that the per share merger consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery and stockholders should recognize that an appraisal could result in a determination of a value higher or lower than, or the same as, the per share merger consideration. Moreover, we do not anticipate offering more than the per share merger consideration to any stockholder exercising appraisal rights and reserve the right to assert, in any appraisal proceeding, that, for purposes of Section 262, the "fair value" of a share of our common stock is less than the per share merger consideration. In determining "fair value," the Delaware Court of Chancery is required to take into account all relevant factors. In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that "proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court" should be considered and that "[f]air price obviously requires consideration of all relevant factors involving the value of a company." The Delaware Supreme Court has stated that in making this determination of fair value the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts which could be ascertained as of the date of the merger which throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be "exclusive of any element of value arising from the accomplishment or expectation of the merger." In Cede & Co. v. Technicolor,  Inc., the Delaware Supreme Court stated that such exclusion is a "narrow exclusion [that] does not encompass known elements of value," but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court construed Section 262 to mean that "elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered."

        Costs of the appraisal proceeding (which do not include attorneys' fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and imposed upon the surviving corporation and the stockholders participating in the appraisal proceeding by the Delaware Court of Chancery, as it deems equitable in the circumstances. Upon the application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys' fees and the fees and expenses of experts used in the appraisal proceeding, to be charged pro rata against the value of all shares of our common stock entitled to appraisal. Any stockholder who demanded appraisal rights will not, after the effective time of the merger, be entitled to vote shares of our common stock

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subject to that demand for any purpose or to receive payments of dividends or any other distribution with respect to those shares of our common stock, other than with respect to dividends or distributions payable to stockholders of record as of a record date prior to the effective time of the merger.

        In view of the complexity of Section 262 of the DGCL, Company's stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors.

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PROPOSAL 3—ADVISORY VOTE ON MANAGEMENT RETENTION COMPENSATION

        Section 14A of the Exchange Act and Rule 14a-21(c) under the Exchange Act require that we seek an advisory (non-binding) vote from our stockholders to approve the management retention compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the proposed transactions. As required by these provisions, we are asking our stockholders to vote on the adoption of the following resolution:

        "RESOLVED, that the compensation that may be paid or become payable to our named executive officers in connection with the transactions, as disclosed in the table entitled "Management Retention Compensation" pursuant to Item 402(t) of Regulation S-K, including the associated narrative discussion, and the agreements or understandings pursuant to which such compensation may be paid or become payable, are hereby APPROVED."

        Our board of directors (except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy) recommends that you vote "FOR" approval of this advisory (non-binding) proposal. Approval of this proposal requires the affirmative vote of the holders of a majority of the shares of our common stock, present in person or represented by proxy and voting on the matter at the special meeting. Approval of this proposal is not a condition to completion of the sale or the merger. The vote with respect to this proposal is an advisory vote and will not be binding on us. Therefore, regardless of whether stockholders approve this proposal, if the sale and merger are approved by the stockholders and completed, the management retention compensation will still be paid to such named executive officers to the extent payable in accordance with the terms of such compensation contracts and arrangements.

Management Retention and Incentive Arrangements

2015 Management Incentive Plan

        A management incentive plan, which we refer to as the MIP, was approved by the compensation committee of our board of directors on April 28, 2015, and subsequently amended on October 19, 2015. The purpose of the MIP was to encourage the retention of our key personnel and the key personnel of our subsidiaries in light of substantial uncertainty regarding our group's future, and the significant risk of management departures in light of attempted recruitment by competitors, following the adoption of the Mass Media Law. Pursuant to the MIP, all outstanding equity awards granted under the previous equity compensation arrangements are required to be forfeited or offset against amounts payable under the MIP.

        As originally adopted, the total cash pool available under the MIP was $10 million. As amended, the total cash pool available under the MIP in connection with the sale is $6 million. An additional $4 million will be retained by CTC Investments and its subsidiaries following the sale, as a retention tool for participants in respect of the 12 months following the sale, upon terms to be agreed following the sale.

        A total of 28 executives and key employees are eligible for payments under the MIP in connection with the proposed sale, as follows:

    6 are eligible for an amount in excess of $300,000 each;

    4 are eligible for an amount between $150,000 and $300,000 each;

    18 are eligible for an amount between $60,000 and $150,000 each; and

    2 are eligible for an amount less than $60,000 each.

        All allocations were determined based on a formula that reflected the relative size of an individual's equity awards previously granted under our equity compensation arrangements. The

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entitlements will vest upon the closing of the sale, unless a recipient resigns from his or her position prior to any such event. If we terminate participant's employment, the payment of an entitlement is due within one month following the termination. In the event of the disability or death or a participant, the payment of an entitlement remains due to the participant or his or her heirs.

Discretionary Bonus Pool

        On September 25, 2015, our board of directors approved an additional discretionary bonus pool of $1,000,000. This bonus pool is intended to provide an incentive to our key personnel and the key personnel of our subsidiaries to run our business prior to the closing of the sale efficiently so as to minimize any potential reduction of the consideration for the sale under the terms of the sale agreement based on our failure to achieve certain targets for net cash flows from operating and investing activities during the second half of 2015 compared with an agreed target for this period. Therefore:

    if no such reduction is made, the amount payable out of this bonus pool reserve will be $1,000,000;

    if such reduction is less than $5,000,000, the amount payable out of this bonus pool reserve will be $800,000;

    if such reduction is greater than $15,000,000, no bonuses will be awarded out of this bonus pool reserve; and

    if such reduction is more than $5,000,000 but less than $15,000,000, the amount payable out of this bonus pool reserve will be determined on a linear sliding scale from zero to $800,000, based on the amount by which such reduction in consideration under the sale agreement is less than $15,000,000 but greater than $5,000,000.

        Any bonus awards out of this bonus pool will be payable only upon final determination of purchase price, as adjusted, actually paid in connection with the sale transaction. The individuals eligible to receive awards from this bonus pool reserve will be identified by our CEO and COO, acting jointing (with the consent of the special committee).

Management Retention Compensation Table

        The following tables set forth the information required by Item 402(t) of Regulation S-K regarding the compensation for each of our named executive officers (which we refer to as NEOs) under the MIP that is based on or otherwise becomes payable immediately prior to, or upon the effectiveness of, the sale and merger, assuming the closing of the sale and merger occurred on October 1, 2015, which is the latest practicable date prior to the filing of this proxy statement.

Name
  Cash(1)   Equity   Perquisites/
Benefits
  Tax
Reimbursement
  Other   Total  

Yuliana Slashcheva

  $ 801,776                        

Nikolay Surikov(2)

                           

Vyacheslav Murugov(3)

                           

Elmira Makhmutova

  $ 417,087                        

Sergey Petrov

  $ 492,808                        

(1)
Amounts shown reflect payments under the 2015 management incentive plan in connection with the sale, and exclude any amounts that may be payable under the discretionary bonus pool described above, the allocations for which have not been determined.

(2)
Mr. Surikov resigned as our Chief Financial Officer effective January 23, 2015.

(3)
Mr. Murugov resigned as our Chief Content Officer effective December 31, 2014.

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PROPOSAL 4—ADJOURNMENT OF THE SPECIAL MEETING

        If we fail to receive a sufficient number of votes to approve the sale or to adopt the merger agreement, we may propose to adjourn the special meeting for the purpose of soliciting additional proxies to approve the sale or to adopt the merger agreement. We currently do not intend to propose adjournment of our special meeting if there are sufficient votes to approve the sale and to adopt the merger agreement

        Approval of the proposal to adjourn the special meeting, if necessary, for the purpose of soliciting additional proxies, requires the affirmative vote of holders of a majority of the shares of our common stock present in person or represented by proxy and voting on the matter at the special meeting.

        Our board of directors (except for those members originally designated by Telcrest, who did not participate in the decision in accordance with our economic sanctions compliance policy) recommends that you vote "FOR" the proposal to adjourn the special meeting to solicit additional proxies if there are insufficient votes at the time of the meeting to approve the sale or to adopt the merger agreement.

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RATIO OF EARNINGS TO FIXED CHARGES

        Our ratio of earnings to fixed charges for the periods presented was as follows:

 
  Nine Months Ended
September 30,
  Year Ended
December 31,
 
 
  2014   2015   2013   2014  
 
  (in millions of U.S. dollars, except ratios)
 

Earnings(a)

    132     21     216     163  

Fixed Charges(b)

    0.3     0.2     0.6     0.4  

Ratio of earnings to fixed charges

    397     122     354     395  

(a)
Earnings consist of income before income taxes, equity income and noncontrolling interest; plus fixed charges and distributed income of equity investees; less noncontrolling interest in pre-tax income of subsidiaries with no fixed charges.

(b)
Fixed charges consist of interest expense.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

        The following unaudited pro forma condensed consolidated financial statements are based on our historical consolidated financial statements as adjusted to give effect to the sale of the 75% participation interest in CTC Investments to UTV-Management. The unaudited pro forma condensed consolidated statements of income for the nine months ended September 30, 2015 and for the years ended December 31, 2014, 2013 and 2012 give effect to the sale as if it had occurred as of beginning of those periods. The unaudited pro forma condensed combined balance sheet as of September 30, 2015 gives effect to the sale as if it had occurred on September 30, 2015. The unaudited pro forma financial statements do not reflect the issuance by CTC Investments of an additional, new participation interest in CTC Investments to UTV-Management or its affiliate following the closing of the sale, which would result in UTV-Management (together with its affiliate) holding 80% of CTC Investments to ensure compliance with the requirements of the Mass Media Law, because in the sale agreement the Company, in its capacity as a holder of participation interests in CTC Investments, has agreed only to approve such issuance by CTC Investments.

        In order to derive the pro forma financial information, our historical financial information has been adjusted to eliminate the assets, liabilities, and revenues and expenses of the Russian and Kazakhstan businesses to be sold to UTV-Management by virtue of selling to it a 75% participation interest in CTC Investments, all of which have historically been consolidated in our financial statements. Pro forma adjustments are described in the accompanying notes to the unaudited pro forma financial information and are based on information available at the time of preparation and reflect certain assumptions that we believe are reasonable under the circumstances. Accordingly, the pro forma adjustments reflected in the unaudited condensed consolidated pro forma financial information are preliminary and subject to revision and the actual amounts ultimately reported could differ from these estimates.

        The unaudited pro forma financial statements have been provided for informational purposes only and do not purport to be indicative of what would have occurred had the disposition actually been made as of such dates, nor are they indicative of results which may occur in the future. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma financial statements should be read in conjunction with our historical financial statements included in our 2014 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the nine months ended September 30, 2015.

        Under accounting principles generally accepted in the United States, we expect to reflect the results of operations of our Russian and Kazakhstan businesses subject to the sale agreement as discontinued operations at the time when all substantive contingencies have been resolved and necessary approvals obtained, including stockholder approval. The anticipated after-tax loss on the sale of the 75% interest of our Russian and Kazakhstan businesses to UTV-Management will be reflected in our financial statements commencing with the quarter during which the sale is consummated. The remaining non-controlling interest would be accounted for under equity investment method.

        For further information, see the unaudited pro forma condensed financial information included in this proxy statement.

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CTC MEDIA, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

AS OF SEPTEMBER 30, 2015

(in millions of U.S. dollars, except share and per share data)

 
  CTC Media
Inc. and
subsidiaries
Historical
1(a)
  Pro forma
adjustments
for Russian
and
Kazakhstan
businesses
sold to UTV-
Management
1(b)
  Notes   Pro
Forma
 

ASSETS

                         

CURRENT ASSETS:

                         

Cash and cash equivalents

  $ 84   $ 187     1(c ) $ 271  

Short-term investments

    17     (17 )   1(c )    

Trade accounts receivable, net of allowance for doubtful accounts (September 30, 2015—$2)

    16     (16 )          

Taxes reclaimable

    13     (7 )         6  

Prepayments

    29     (29 )          

Programming rights, net

    90     (90 )          

Deferred tax assets

    14     (14 )          

Other current assets

    1     (1 )          

TOTAL CURRENT ASSETS

    264     13           277  

PROPERTY AND EQUIPMENT, net

    13     (13 )          

INTANGIBLE ASSETS, net:

                         

Broadcasting licenses

    20     (20 )          

Cable network connections

    8     (8 )          

Trade names

    3     (3 )          

Other intangible assets

    3     (3 )          

Net intangible assets

    34     (34 )          

GOODWILL

    46     (46 )          

PROGRAMMING RIGHTS, net

    76     (76 )          

INVESTMENTS IN AND ADVANCES TO INVESTEES

    2     107     1(d )   109  

PREPAYMENTS

    18     (18 )          

DEFERRED TAX ASSETS

    7     (7 )          

OTHER NON-CURRENT ASSETS

    42     (7 )         35  

TOTAL ASSETS

  $ 502   $ (81 )       $ 421  

LIABILITIES AND STOCKHOLDERS' EQUITY

                         

CURRENT LIABILITIES:

                         

Bank loans

    1     (1 )          

Accounts payable

    49     (48 )         1  

Accrued liabilities

    12     0     1(e )   12  

Dividends blocked under sanctions

    35               35  

Taxes payable

    3     (3 )          

Deferred revenue

    4     (4 )          

Deferred tax liabilities

    6     2           8  

TOTAL CURRENT LIABILITIES

    110     (54 )         56  

DEFERRED TAX LIABILITIES

    4     (4 )          

COMMITMENTS AND CONTINGENCIES

                         

STOCKHOLDERS' EQUITY :

                         

Common stock ($0.01 par value; shares authorized 175,772,173; shares issued September 30, 2015—158,210,719)

    2               2  

Additional paid-in capital

    495               495  

Retained earnings

    415     (522 )   1(f )   (107 )

Accumulated other comprehensive loss

    (503 )   503            

Non-controlling interest

    4     (4 )          

Less: Common stock held in treasury, at cost (September 30, 2015—2,106,865 shares)

    (25 )             (25 )

TOTAL STOCKHOLDERS' EQUITY

    388     (23 )         365  

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

  $ 502   $ (81 )       $ 421  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to the unaudited pro forma condensed consolidated balance sheet

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CTC MEDIA, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

(in millions of U.S. dollars, except share and per share data)

 
  For the Nine Months Ended September 30, 2015  
 
  Company and
subsidiaries
Historical 1(a)
  Pro Forma
adjustments for
Company's
Russian and
Kazakhstan
businesses sold to
UTV-Management
1(b)
  Notes   Pro Forma  

REVENUES:

                         

Advertising

  $ 242   $ (242 )       $  

Sublicensing revenue and other revenues          

    7     (7 )          

Total operating revenues

    249     (249 )          

EXPENSES:

                         

Direct operating expenses (exclusive of programming expenses, depreciation and amortization and stock-based compensation expense shown below)

    (24 )   24            

Selling, general and administrative (depreciation and amortization and stock-based compensation expense shown below)

    (68 )   65           (3 )

Stock-based compensation expense

    (1 )   1            

Programming expenses

    (129 )   129            

Depreciation and amortization

    (11 )   11            

Total operating expenses

    (233 )   230           (3 )

OPERATING INCOME

    16     (19 )         (3 )

FOREIGN CURRENCY GAINS

    2     (2 )          

INTEREST INCOME

    4     (4 )          

INTEREST EXPENSE

    (0 )   0            

OTHER NON-OPERATING (LOSS) INCOME, net

    (0 )   0            

EQUITY IN (LOSS) INCOME OF INVESTEE COMPANIES

    (0 )   4     1(c )   4  

Income before income tax

    22     (21 )   1(c )   1  

INCOME TAX BENEFIT

    36     (37 )   1(c )   (1 )

NET INCOME

  $ 58   $ (58 )   1(c ) $  

LESS: INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST

  $ (1 ) $ 1            

NET INCOME ATTRIBUTABLE TO CTC MEDIA, INC. STOCKHOLDERS

  $ 57   $ (57 )       $  

See notes to the unaudited pro forma condensed consolidated statements of income

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CTC MEDIA, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

(in millions of U.S. dollars, except share and per share data)

 
  For the Fiscal Year Ended December 31, 2014  
 
  Company and
subsidiaries
Historical 1(a)
  Pro Forma
adjustments for
Company's
Russian and
Kazakhstan
businesses sold to
UTV-Management
1(b)
  Notes   Pro Forma  

REVENUES:

                         

Advertising

  $ 699   $ (698 )       $ 1  

Sublicensing revenue and other revenues          

    12     (12 )          

Total operating revenues

    711     (710 )         1  

EXPENSES:

                         

Direct operating expenses (exclusive of programming expenses, depreciation and amortization and stock-based compensation expense (benefit) shown below)

    (46 )   45           (1 )

Selling, general and administrative (depreciation and amortization and stock-based compensation expense shown below)

    (159 )   155           (4 )

Stock-based compensation (expense) benefit

    0     (0 )          

Programming expenses

    (300 )   300            

Depreciation and amortization

    (26 )   26            

Impairment loss

    (29 )   29            

Total operating expenses

    (560 )   555           (5 )

OPERATING INCOME (LOSS)

    151     (155 )         (4 )

FOREIGN CURRENCY GAINS (LOSSES)

    9     (4 )         5  

INTEREST INCOME

    10     (10 )          

INTEREST EXPENSE

    (0 )   0            

OTHER NON-OPERATING (LOSS) INCOME, net

    (1 )   1            

EQUITY IN (LOSS) INCOME OF INVESTEE COMPANIES

    (1 )   34     1(c )   33  

Income before income tax

    168     (134 )   1(c )   34  

INCOME TAX EXPENSE

    (55 )   49     1(c )   (6 )

NET INCOME

  $ 113   $ (85 )   1(c ) $ 28  

LESS: INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST

  $ (5 ) $ 5            

NET INCOME ATTRIBUTABLE TO CTC MEDIA, INC. STOCKHOLDERS

  $ 108   $ (80 )       $ 28  

See notes to the unaudited pro forma condensed consolidated statements of income

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CTC MEDIA, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

(in millions of U.S. dollars, except share and per share data)

 
  For the Fiscal Year Ended December 31, 2013  
 
  Company and
subsidiaries
Historical 1(a)
  Pro Forma
adjustments for
Company's
Russian and
Kazakhstan
businesses sold to
UTV-Management
1(b)
  Notes   Pro Forma  

REVENUES:

                         

Advertising

  $ 806   $ (805 )       $ 1  

Sublicensing revenue and other revenues          

    26     (26 )          

Total operating revenues

    832     (831 )         1  

EXPENSES:

                         

Direct operating expenses (exclusive of programming expenses, depreciation and amortization and stock-based compensation expense (benefit) shown below)

    (47 )   47            

Selling, general and administrative (depreciation and amortization and stock-based compensation expense shown below)

    (174 )   170           (4 )

Stock-based compensation (expense) benefit

    (2 )   2            

Programming expenses

    (339 )   338           (1 )

Depreciation and amortization

    (33 )   33            

Impairment loss

    (30 )   30            

Total operating expenses

    (625 )   620           (5 )

OPERATING INCOME (LOSS)

    207     (211 )         (4 )

FOREIGN CURRENCY GAINS (LOSSES)

    2     (2 )          

INTEREST INCOME

    12     (12 )          

INTEREST EXPENSE

    (1 )   1            

OTHER NON-OPERATING (LOSS) INCOME, net

    0     (0 )