DEFM14A 1 defm14amegervoteproxystate.htm DEFM14A CENTRAL EUROPEAN MEDIA ENTERPRISES LTD. Wdesk | Document



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
(Rule 14a-101)
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 Pursuant to § 240.14a-12
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
o
No fee required.
o
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:
 
(2)
Aggregate number of securities to which transaction applies:
 
(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):
 
(4)
Proposed maximum aggregate value of transaction:
 
(5)
Total fee paid:
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:





jupiterproxyimage1a01.jpg
Central European Media Enterprises Ltd.
O’Hara House, 3 Bermudiana Road
Hamilton HM 08, Bermuda

January 10, 2020
Dear Shareholder:
You are cordially invited to a special general meeting of shareholders of Central European Media Enterprises Ltd. (“CME” or the “Company”) to be held on February 27, 2020, at Citco (Bermuda) Limited, O’Hara House, 3 Bermudiana Road, Hamilton HM 08, Bermuda, at 10:00 a.m. Bermuda time.
As announced on October 27, 2019, the Company entered into a merger agreement providing for a merger with TV Bermuda Ltd., a wholly owned subsidiary of TV Bidco B.V. and an affiliate of PPF Group N.V. At the special general meeting, you will be asked to vote on a proposal to approve the merger agreement, the related statutory merger agreement and the merger contemplated under such agreements (the “Merger Proposal”), and the other proposals in the proxy statement accompanying this letter.
If the merger is completed, each holder of shares of CME’s Class A Common Stock (other than the Company, TV Bidco B.V., TV Bermuda Ltd. or any of their direct or indirect wholly-owned subsidiaries) (each a “Class A Share”) will be entitled to receive $4.58 per share in cash, the holder of the share of CME’s Series A Convertible Preferred Stock will be entitled to receive $32.9 million in cash, and the holder of the shares of CME’s Series B Convertible Redeemable Preferred Stock will be entitled to receive $1,630.875 per share in cash, in each case, without interest thereon and less any applicable withholding taxes (except where a holder has properly exercised its appraisal rights).
The CME Board of Directors, after carefully considering, in consultation with CME’s management and financial and legal advisors, various factors (more fully described in the enclosed proxy statement) and upon the recommendation of a Special Committee comprised solely of independent and disinterested directors, has unanimously: (1) determined that the consideration for each Class A Share constitutes fair value in accordance with the Companies Act 1981 of Bermuda, as amended; (2) determined that the merger agreement, the statutory merger agreement and the transactions contemplated thereby, including the merger, on the terms and subject to the conditions set forth therein, are advisable to, and in the best interests of, CME and its shareholders; (3) approved the execution, delivery and performance of the merger agreement, the statutory merger agreement and the transactions contemplated thereby, including the merger; (4) resolved that the merger agreement and the statutory merger agreement be submitted to the shareholders of CME at the Special General Meeting for their adoption and approval; and (5) subject to the non-solicitation terms of the merger agreement, resolved to recommend that the shareholders of CME vote in favor of the adoption of the merger, the merger agreement and the statutory merger agreement.



The enclosed proxy statement, including the annexes and documents incorporated by reference, provides detailed information about the special general meeting, the merger agreement, the statutory merger agreement and the transactions contemplated by the merger agreement. The proxy statement also describes the actions and determinations of the Special Committee and the Board of Directors in connection with their evaluation of the merger agreement and the transactions contemplated therein. You should carefully read and consider the entire proxy statement and its annexes along with all of the documents incorporated by reference as they contain important information about the merger and how it affects you.
The Board of Directors, taking into consideration, among other things, the recommendation of the Special Committee, unanimously recommends that you vote “FOR” each of the proposals described in the enclosed proxy statement, including the Merger Proposal.
To ensure your shares are voted, please complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope (if you are a registered holder). If you hold your shares through a bank, broker or other nominee, you should vote your shares according to the voting instructions from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote your shares on any of the proposals described in the enclosed proxy statement, including the Merger Proposal, without your instructions. If you decide to attend the Special General Meeting and vote in person by ballot, please review the information in the proxy statement regarding how to revoke any proxy previously submitted. If you would like additional copies of the proxy materials or need help voting your shares, please contact Georgeson LLC, our proxy solicitor, by calling +1 (866) 296-5716 or sending an email to centraleuropeanmedia@georgeson.com.
On behalf of the Board of Directors, we thank you for your support and appreciate your consideration of this matter.
Sincerely,
John K. Billock
Chairman of the Board of Directors
Neither the U.S. Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved of the merger, passed upon the merits of the merger agreement, the statutory merger agreement or the merger or determined if the accompanying proxy statement is accurate or complete. Any representation to the contrary is a criminal offense.

The enclosed proxy statement is dated January 10, 2020, and, together with the enclosed form of proxy card, is first being mailed to the shareholders of CME on or about January 17, 2020.



CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
NOTICE OF SPECIAL GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that a special general meeting of shareholders (including any postponement or adjournment thereof where applicable, the “Special General Meeting”) of Central European Media Enterprises Ltd., a Bermuda exempted company limited by shares (“CME”), will be held at Citco (Bermuda) Limited, O’Hara House, 3 Bermudiana Road, Hamilton HM 08, Bermuda on February 27, 2020, at 10:00 a.m. Bermuda time, for the following purposes:
1.    To vote on the proposal to approve the Agreement and Plan of Merger, dated as of October 27, 2019 (the “Merger Agreement”), by and among CME, TV Bidco B.V. (“Parent”), and TV Bermuda Ltd. (“Merger Sub”), the statutory merger agreement (the “Statutory Merger Agreement”) required in accordance with Section 105 of the Companies Act 1981 of Bermuda, as amended (the “Companies Act”), and the merger of Merger Sub with and into CME, with CME continuing as the surviving company of such merger and a wholly-owned subsidiary of Parent (the “Merger”), pursuant to the terms of the Merger Agreement and the Statutory Merger Agreement (collectively, the “Merger Proposal”);
2.    To vote on the proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to CME’s named executive officers in connection with the Merger, as described in this proxy statement (the “Compensation Advisory Proposal”); and
3.    To vote on the proposal to approve an adjournment of the Special General Meeting, if necessary or appropriate, to a later date or dates, to solicit additional proxies if there are insufficient votes to approve the Merger Proposal at the time of the Special General Meeting (the “Adjournment Proposal”).
Only shareholders of record at the close of business on December 27, 2019 are entitled to notice of the Special General Meeting and to vote at the Special General Meeting or any postponement or adjournment thereof.
Your vote is very important, regardless of the number of shares you own. CME recommends that shareholders vote their shares by proxy. Procedures for voting shares by proxy vary depending on whether you are a registered shareholder (meaning your name appears as a shareholder in CME’s register of shareholders) or a beneficial owner who holds shares through a broker, bank or other nominee. Registered shareholders may vote their shares by proxy by completing and returning the proxy card accompanying this proxy statement. Beneficial owners should follow the instructions of their broker, bank or other nominee to vote their shares by proxy. The shares represented by proxies will be voted at the Special General Meeting in accordance with the directions given therein. If you are a registered shareholder and return a proxy card signed but without instructions for voting, the shares will be voted on the proposals as recommended by the CME Board of Directors (the “Board of Directors”). If you are a beneficial owner and do not provide your bank, broker or other nominee with instructions for voting, your bank, broker or other nominee cannot vote your shares on any of the proposals described in this proxy statement, including the Merger Proposal. For shareholders who wish to vote their shares in person at the Special General Meeting, procedures for voting at the Special General Meeting differ depending on whether you are a registered shareholder or beneficial owner. Please carefully review the section captioned “Questions and Answers—May I attend the Special General Meeting in person?” in this proxy statement for additional information.



The Board of Directors, taking into consideration, among other things, the recommendation of a special committee comprised solely of independent and disinterested directors (the “Special Committee”), unanimously recommends that you vote: (1) “FOR” the Merger Proposal; (2) “FOR” the Compensation Advisory Proposal; and (3) “FOR” the Adjournment Proposal.
For the purposes of Section 106(2)(b)(i) of the Companies Act, the Board of Directors unanimously determined that $4.58, without interest thereon, is fair value for each share of CME’s Class A Common Stock, par value $0.08 per share (each, a “Class A Share”). The terms of the respective Certificates of Designation of the Series A Convertible Preferred Stock, par value $0.08 per share (the “Series A Preferred Share”), and the Series B Convertible Redeemable Preferred Stock, par value $0.08 per share (the “Series B Preferred Shares,” and, together with the Series A Preferred Share, the “Preferred Shares”) provide that such shares in a merger would be treated as if converted into Class A Shares and receive the consideration due to the holders of Class A Shares, which the Board of Directors determined to be fair value. The holder of the Series A Preferred Share and the Series B Preferred Shares has agreed to accept the consideration for such Preferred Shares set out in the Merger Agreement in lieu of consideration calculated on the basis of the number of Class A Shares underlying such Preferred Shares, and has agreed not to convert any such Preferred Shares into Class A Shares until the earlier of the effective time of the Merger and the termination of the Merger Agreement in accordance with its terms. CME shareholders who are not satisfied that they have been offered fair value for their shares and whose shares are not voted in favor of the Merger Proposal may exercise their appraisal rights under the Companies Act to have the fair value of their shares appraised by the Supreme Court of Bermuda (the “Bermuda Court”). CME shareholders intending to exercise appraisal rights must file their application for appraisal of the fair value of their shares with the Bermuda Court within one month of the giving of this notice convening the Special General Meeting and otherwise fully comply with the requirements for seeking appraisal under the Companies Act.  
THE PROMPT RETURN OF YOUR PROXY CARD WILL ENSURE THAT YOUR SHARES WILL BE VOTED. PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD. A PREPAID REPLY ENVELOPE IS ENCLOSED FOR CONVENIENCE. IF YOU HOLD YOUR SHARES THROUGH A BANK, BROKER OR OTHER NOMINEE, YOU SHOULD VOTE YOUR SHARES ACCORDING TO THE VOTING INSTRUCTIONS FROM YOUR BANK, BROKER OR OTHER NOMINEE. IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOU OWN SHARES REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH PROXY SHOULD BE SUBMITTED.
The proxy statement of which this notice forms a part provides a detailed description of the Merger, the Merger Agreement and the Statutory Merger Agreement, the Compensation Advisory Proposal and the Adjournment Proposal, and provides specific information concerning the Special General Meeting. We urge you to read the proxy statement, including any documents incorporated therein by reference, and its annexes carefully and in their entirety. If you would like additional copies of the proxy materials or need help voting your shares, please contact CME’s proxy solicitor, Georgeson LLC, by calling +1 (866) 296-5716 or sending an email to centraleuropeanmedia@georgeson.com.

By order of the Board of Directors,
Daniel Penn
Secretary
Dated: January 10, 2020



TABLE OF CONTENTS






CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
PROXY STATEMENT FOR SPECIAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 27, 2020
This proxy statement is furnished in connection with the solicitation by the Board of Directors (the “Board of Directors”) of CENTRAL EUROPEAN MEDIA ENTERPRISES LTD. of proxies to be voted at a special general meeting of shareholders (including any postponement or adjournment thereof where applicable, the “Special General Meeting”) to be held at Citco (Bermuda) Limited, O’Hara House, 3 Bermudiana Road, Hamilton HM 08, Bermuda on February 27, 2020, at 10:00 a.m. Bermuda time. Except as otherwise specifically noted in this proxy statement, “CME,” the “Company,” “we,” “our,” “us” and similar words refer to Central European Media Enterprises Ltd.
As used in this proxy statement, the following defined terms have the respective meanings set forth below:
“AT&T” means AT&T Inc.
“Class A Shares” means shares of CME’s Class A Common Stock, par value $0.08 per share.
“Companies Act” means the Companies Act 1981 of Bermuda, as amended.
“Merger” means the merger of Merger Sub with and into CME, with CME continuing as the surviving company of such merger and a wholly-owned subsidiary of Parent, pursuant to the terms of the Merger Agreement and the Statutory Merger Agreement.
“Merger Agreement” means the Agreement and Plan of Merger, dated as of October 27, 2019, by and among CME, Parent and Merger Sub.
“Merger Sub” means TV Bermuda Ltd., a Bermuda exempted company limited by shares and a wholly-owned subsidiary of Parent.
“Parent” means TV Bidco B.V., a Netherlands private limited liability company.
“PPF” means PPF Group N.V.
“Preferred Shares” means the Series A Preferred Share and Series B Preferred Shares, collectively.
“Record Date” means December 27, 2019.
“Series A Preferred Share” means the share of CME’s Series A Convertible Preferred Stock, par value $0.08 per share.
“Series B Preferred Shares” means shares of CME’s Series B Convertible Redeemable Preferred Stock, par value $0.08 per share.
“Special Committee” means a special committee of the Board of Directors comprised solely of independent and disinterested directors.
“Statutory Merger Agreement” means the statutory merger agreement required in accordance with Section 105 of the Companies Act.
“TWBV” means Time Warner Media Holdings B.V., a Netherlands private limited liability company.
“Voting Agreement” means the Voting Agreement, dated as of October 27, 2019, by and among Parent, CME and the Warner Parties.

1




“Voting Shares” means the Class A Shares, Series A Preferred Share and Series B Preferred Shares, collectively.
“Warner Media” means Warner Media, LLC (f/k/a Time Warner Inc.), a Delaware limited liability company.
“Warner Parties” means Warner Media and TWBV (each an affiliate of AT&T), collectively.
Unless indicated otherwise, any other capitalized term used but not otherwise defined herein has the meaning assigned to such term in the Merger Agreement.
A copy of the Merger Agreement is attached as Annex A-1 to this proxy statement, a copy of the Statutory Merger Agreement is attached as Annex A-2 to this proxy statement, and a copy of the Voting Agreement is attached as Annex A-3 to this proxy statement. A copy of a written opinion of Allen & Company LLC (“Allen & Company”), dated October 27, 2019, to the Special Committee and the Board of Directors, as further described in the section below entitled “The Merger—Fairness Opinion of Allen & Company,” is attached as Annex B to this proxy statement.
This proxy statement, the notice of the Special General Meeting, and the proxy card (collectively, the “proxy materials”) are first being sent on or about January 17, 2020 to shareholders of record entitled to vote at the Special General Meeting at the close of business on the Record Date. You should carefully read this entire proxy statement and its annexes along with all of the documents incorporated by reference into this proxy statement, as they include important information about the Merger and how it affects you. If you would like additional copies of the proxy materials or need help voting your shares, please contact CME’s proxy solicitor:
Georgeson LLC
1290 Avenue of the Americas, 9
th Floor
New York, New York 10104
Toll free number: +1 (866) 296-5716
Email: centraleuropeanmedia@georgeson.com
Important Notice Regarding the Availability of Proxy Materials for
the Special General Meeting to be held on February 27, 2020

The proxy materials are available in the “SEC and PSE Filings” section of CME’s website at https://www.cetv-net.com/investors.

2




QUESTIONS AND ANSWERS
The following questions and answers address some commonly asked questions regarding the Merger, the Merger Agreement and the Special General Meeting. These questions and answers may not address all questions that are important to you. You should carefully read and consider the more detailed information contained elsewhere in this proxy statement and its annexes along with all of the documents incorporated by reference into this proxy statement, as they contain important information about, among other things, the Merger and how it affects you. To obtain information incorporated by reference into this proxy statement, please see the section entitled “Where You Can Find More Information.
Q:
Why am I receiving these materials?
A:
The Company, Parent and Merger Sub have entered into the Merger Agreement, pursuant to which Merger Sub will merge with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Parent. In order to consummate the Merger, the Company’s shareholders must approve the Merger Proposal. The Company will hold the Special General Meeting to obtain approval of the Merger Proposal and to consider certain other related matters which are not prerequisites to the consummation of the Merger. The Board of Directors is furnishing this proxy statement and proxy card to the shareholders in connection with the solicitation of proxies to be voted at the Special General Meeting.
Q:
When and where is the Special General Meeting?
A:
The Special General Meeting will take place on February 27, 2020, at Citco (Bermuda) Limited, O’Hara House, 3 Bermudiana Road, Hamilton HM 08, Bermuda, at 10:00 a.m. Bermuda time.
Q:
What am I being asked to vote on at the Special General Meeting?
A:
You are being asked to vote on the following proposals:
to approve the Merger Agreement, the Statutory Merger Agreement and the Merger (collectively, the “Merger Proposal”);
to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to the Company’s named executive officers in connection with the Merger (the “Compensation Advisory Proposal”); and
to approve an adjournment of the Special General Meeting, if necessary or appropriate, to a later date or dates, to solicit additional proxies if there are insufficient votes to approve the Merger Proposal at the time of the Special General Meeting (the “Adjournment Proposal”).
Q:
Who is entitled to vote at the Special General Meeting?
A:
Only shareholders of record at the close of business on the Record Date are entitled to notice of the Special General Meeting and to vote at the Special General Meeting or any postponement or adjournment thereof as set out in this proxy statement.

3




At the close of business on the Record Date, there were issued and outstanding 253,607,026 Class A Shares, one Series A Preferred Share, and 200,000 Series B Preferred Shares. There were no shares of Class B Common Stock, par value $0.08 per share, outstanding. The shareholder of record of the Series A Preferred Share is entitled to one vote for each of the 11,211,449 Class A Shares underlying such Series A Preferred Share. The shareholder of record of the Series B Preferred Shares is entitled to one vote for each of the 111,136,877 Class A Shares underlying such Series B Preferred Shares.
Shareholders of record of Class A Shares and of the Series A Preferred Share are entitled to vote on all proposals presented to shareholders at the Special General Meeting. The shareholder of record of the Series B Preferred Shares is entitled to vote on the Merger Proposal at the Special General Meeting but is not entitled to vote on any other proposals presented to shareholders at the Special General Meeting. Shareholders of record of the Voting Shares will vote together as a single class on the Merger Proposal. Shareholders of record of Class A Shares and the Series A Preferred Share will vote together as a single class on all other proposals presented at the Special General Meeting.
Q:
May I attend the Special General Meeting in person?
A:
Only shareholders of record as of the close of business on the Record Date or their proxy holders (or in the case of corporate shareholders, their authorized representatives) are entitled to attend the Special General Meeting. Regardless of the foregoing, the Chairman of the Special General Meeting has complete authority to determine who is permitted to attend the Special General Meeting, including granting admission to individuals other than shareholders of record. Registered shareholders (or their proxy holders or authorized representatives, as the case may be) who wish to gain admission to the Special General Meeting must present a valid form of photo identification, such as a passport, driver’s license or other government-issued photo identification. Beneficial owners must provide evidence of ownership to be admitted to the Special General Meeting. Such evidence can include a letter or voting instruction received from a bank, broker or other nominee, or a bank or brokerage account statement reflecting ownership at the close of business on the Record Date.
Even if you plan to attend the Special General Meeting in person, you are encouraged to complete, sign, date and return the enclosed proxy card to ensure that your shares will be represented and voted at the Special General Meeting.
Please note that cameras, sound or video equipment, cellular telephones, smartphones or similar equipment or other electronic devices will not be permitted at the Special General Meeting. To obtain directions to the Special General Meeting, please contact the Corporate Secretary, Central European Media Enterprises Ltd., in care of Citco (Bermuda) Limited, O’Hara House, 3 Bermudiana Road, Hamilton HM 08, Bermuda.
Q:
What will I receive if the Merger is completed?
A:
Upon completion of the Merger, each holder of Class A Shares will be entitled to receive $4.58 in cash (the “Common Share Consideration”) for each Class A Share owned, the holder of the Series A Preferred Share will be entitled to receive $32.9 million in cash (the “Series A Preferred Share Consideration”), and the holder of the Series B Preferred Shares will be entitled to receive $1,630.875 in cash (the “Series B Preferred Share Consideration,” and, together with the Common Share Consideration and the Series A Preferred Share Consideration, the “Merger Consideration”) for each Series B Preferred Share owned, in each case, without interest thereon and less any applicable withholding taxes, unless you have properly exercised and not withdrawn your appraisal rights under the Companies Act.

4




Q:
What vote is required to approve the Merger Proposal?
A:
A vote of at least 75% of the votes cast in person or by proxy by holders of Voting Shares, voting together as a single class, is required to approve the Merger Proposal, provided a quorum is present.
Q:
Why are the Company’s shareholders being asked to cast an advisory (non-binding) vote to approve the Compensation Advisory Proposal?
A:
The U.S. Securities and Exchange Commission (the “SEC”) adopted rules that require CME to seek an advisory (non-binding) vote with respect to certain payments that will or may be made to CME’s named executive officers in connection with the Merger. The Compensation Advisory Proposal satisfies this requirement. See the section of this proxy statement captioned “The Merger—Interests of CME’s Directors and Executive Officers—Payments Upon Termination At or Following Change in Control” for more details on such payments.
Q:
What vote is required to approve the Compensation Advisory Proposal?
A:
A simple majority of the votes cast in person or by proxy by the holders of Class A Shares and the holder of the Series A Preferred Share, voting together as a single class, provided there is a quorum, is required to approve the Compensation Advisory Proposal. The holder of the Series B Preferred Shares is not entitled to vote the Series B Preferred Shares on the Compensation Advisory Proposal.
Q:
What happens if the Merger is not completed?
A:
If the Merger Proposal is not approved by shareholders or if the Merger is not completed for any other reason, shareholders will not receive any payment for their shares. Instead, CME will remain a public company, its shares will continue to be listed and traded on the Nasdaq Global Select Market (“Nasdaq”) and the Prague Stock Exchange, and it will continue to be registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and CME will continue to file periodic reports with the SEC.
Under specified circumstances, CME will be required to pay Parent a termination fee of $50 million upon termination of the Merger Agreement (the “Company Termination Fee”). Under certain other specified circumstances, Parent will be required to pay CME a termination fee of $50 million upon termination of the Merger Agreement (the “Parent Termination Fee”). See the section of this proxy statement captioned “The Merger Agreement—Termination Fees.”
Q:
What do I need to do now?
A:
You should carefully read and consider this entire proxy statement and its annexes along with all of the documents incorporated by reference into this proxy statement as they contain important information about, among other things, the Merger and how it affects you. Unless you wish to seek appraisal, to ensure your shares are voted, you should complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope if you are a registered shareholder, or you should vote your shares according to the voting instruction from your bank, broker or other nominee if you hold your shares in “street name”.

5




Q:
What is the difference between holding shares as a shareholder of record and as a beneficial owner holding shares in “street name”?
A:
If your shares are registered directly in your name in CME’s register of shareholders, you are considered, with respect to those shares, to be the “shareholder of record.” In this case, this proxy statement and proxy card have been mailed directly to you.
If your shares are held through a bank, broker or other nominee, you are considered the “beneficial owner” of shares held in “street name.” In that case, this proxy statement has been forwarded to you by your bank, broker or other nominee who is considered, for purposes of those shares, to be the shareholder of record. As the beneficial owner, you have the right to direct your bank, broker or other nominee how to vote your shares by following their instructions for voting. If you are not the shareholder of record, you may not vote your shares in person at the Special General Meeting unless you obtain a “legal proxy” from your bank, broker or other nominee and present it to the Chairman of the Special General Meeting.
Q:
How may I vote?
A:
CME recommends that shareholders vote their shares by proxy. Procedures for voting shares by proxy vary depending on whether you are a registered shareholder (meaning your name appears as a shareholder in CME’s register of shareholders) or a beneficial owner who holds shares through a broker, bank or other nominee. Registered shareholders may vote their shares by proxy by completing and returning the proxy card accompanying this proxy statement. Beneficial owners should follow the instructions of their broker, bank or other nominee to vote their shares by proxy. The shares represented by proxies will be voted at the Special General Meeting in accordance with the directions given therein. If you are a registered shareholder and return a proxy card signed but without instructions for voting, the shares will be voted on the proposals as recommended by the Board of Directors. If you are a beneficial owner and do not provide your bank, broker or other nominee with instructions for voting, your broker, bank or other nominee cannot vote your shares on any of the proposals. This will result in a “broker non-vote” on the proposals (unless you have obtained a “legal proxy” from your bank, broker or other nominee to attend and vote at the Special General Meeting in person). The impact of “broker non-votes” is explained in further detail under the sections of this proxy statement captioned “The Special General Meeting—Record Date; Shares Entitled to Vote; Quorum; Abstentions and Broker Non-Votes” and “The Special General Meeting—Vote Required” below.
Only registered shareholders or persons holding a proxy executed by a registered shareholder may vote their shares in person at the Special General Meeting. If you are a beneficial owner, you may not vote your shares in person at the Special General Meeting unless you obtain a “legal proxy” from your bank, broker or other nominee and present it to the Chairman of the Special General Meeting. CME recommends beneficial owners who wish to vote their shares in person contact their bank, broker or other nominee to ascertain the registered nominee holder of their shares that is named on CME’s register of shareholders. Shareholders may obtain a copy of CME’s register of shareholders by contacting CME’s registrar in Bermuda, Citco (Bermuda) Limited, at O'Hara House, 3 Bermudiana Road, Hamilton HM 08, Bermuda. Even if you plan to attend the Special General Meeting in person, you are strongly encouraged to vote your shares by proxy to ensure your shares are voted.

6




Q:
If my broker holds my shares in “street name,” will my broker vote my shares for me?
A:
No. Your bank, broker or other nominee is permitted to vote your shares on any proposal scheduled to be considered at the Special General Meeting only if you instruct your bank, broker or other nominee how to vote. You should follow the voting instructions from your bank, broker or other nominee to vote your shares. If you do not provide such voting instructions, your shares will not be voted on such proposals.
Q:
May I change my vote after I have mailed my signed and dated proxy card?
A:
Yes. Shareholders may change their vote at any time before the vote is taken at the Special General Meeting by revoking their proxies. Registered shareholders may revoke their proxies by notice in writing to the Company Secretary, by voting or otherwise revoking in person at the Special General Meeting or by presenting a later-dated proxy. Beneficial owners must follow the instructions of their broker, bank or other nominee to revoke their voting instructions. Please note that attending the Special General Meeting in person will not revoke a prior executed proxy without following the procedures set forth above.
Q:
What is a proxy?
A:
A proxy is your legal designation of another person to vote your shares. The written document describing the matters to be considered and voted on at the Special General Meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares is called a “proxy card.” The proxy card for the Special General Meeting is enclosed with this proxy statement.
Q:
If a shareholder gives a proxy, how are the shares voted?
A:
When completing the proxy card, you may specify whether your shares 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 General Meeting. The individuals named on the enclosed proxy card will vote your shares in the way that you indicate.
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 on the proposals as recommended by the Board of Directors.
Q:
What should I do if I receive more than one set of voting materials?
A:
You may receive more than one set of voting materials if, for example, you hold your shares in more than one brokerage account, if you hold shares in a brokerage account and also as a registered holder, or if you are a registered holder with shares registered in more than one name. Please sign, date and return each proxy card and voting instruction card that you receive to ensure all of your shares are voted.
Q:
Should I surrender my book-entry shares now?
A:
No. After the Merger is completed, a payment agent will send each holder of record a check at such holder’s registered address in payment for the shares represented by such holder’s book-entry shares.

7




Q:
What happens if I sell or otherwise transfer my shares after the Record Date but before the Special General Meeting?
A:
The Record Date for the Special General Meeting is earlier than the date of the Special General Meeting and the date the Merger is expected to be completed. If you sell or transfer your shares after the Record Date but before the Special General Meeting, you will retain your right to vote those shares at the Special General Meeting but you will no longer have the right to receive any Merger Consideration in the event the Merger is completed (unless you have made special arrangements in connection with such transfer). Even if you sell or otherwise transfer your shares after the Record Date, you are encouraged to complete sign, date and return the enclosed proxy card in the accompanying prepaid reply envelope if you are a registered shareholder, or vote your shares according to the voting instructions from your bank, broker or other nominee if you hold your shares in “street name.”
Q:
Where can I find the voting results of the Special General Meeting?
A:
The Company will publish final voting results in a Current Report on Form 8-K to be filed with the SEC following the Special General Meeting. All reports that the Company files with the SEC are publicly available when filed. For more information, please see the section of this proxy statement captioned “Where You Can Find More Information.”
Q:
Will I be subject to U.S. federal income tax upon the exchange of CME common stock for cash pursuant to the Merger?
A:
The exchange of CME’s Class A Shares for cash in the Merger will be a taxable transaction to U.S. Holders (as defined under the section of this proxy statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”) for U.S. federal income tax purposes. A U.S. Holder generally will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the aggregate amount of cash that such U.S. Holder receives in the Merger and such U.S. Holder’s adjusted tax basis in the Class A Shares surrendered in the Merger by such shareholder. Backup withholding may apply with respect to the cash payments made pursuant to the Merger if the U.S. Holder fails to comply with certification procedures under the backup withholding rules. The exchange of CME’s Class A Shares for cash in the Merger will generally not be a taxable transaction to Non-U.S. Holders (as defined under the section of this proxy statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”) unless such Non-U.S. Holder has certain connections to the United States. CME recommends that you consult your own tax advisor concerning the U.S. federal income tax consequences of the Merger in light of your particular circumstances and any consequences arising under U.S. federal non-income tax laws or the laws of any state, local or non-U.S. taxing jurisdiction. A more complete description of the U.S. federal income tax consequences of the Merger is provided under the section of this proxy statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger.”
Q:
When do you expect the Merger to be completed?
A:
The parties to the Merger Agreement are working toward completing the Merger and currently expect to complete the Merger around the middle of 2020. However, the exact timing of completion of the Merger cannot be predicted because the Merger is subject to closing conditions, some of which are outside of CME’s control.

8




SUMMARY
The following summary highlights selected information in this proxy statement and may not contain all of the information that may be important to you as a CME shareholder. Accordingly, you are encouraged to read carefully the entire proxy statement, including its annexes and the documents referred to in this proxy statement. To obtain information incorporated by reference into this proxy statement, please see the section entitled “Where You Can Find More Information.”
Parties Involved in the Merger (page 22)
Central European Media Enterprises Ltd.
CME is a media and entertainment company operating leading businesses in five Central and Eastern European markets with an aggregate population of approximately 45 million people. CME’s operations broadcast 30 television channels in Bulgaria (bTV, bTV Cinema, bTV Comedy, bTV Action, bTV Lady and Ring), the Czech Republic (Nova, Nova 2, Nova Cinema, Nova Sport 1, Nova Sport 2, Nova International, Nova Action and Nova Gold), Romania (PRO TV, PRO 2, PRO X, PRO GOLD, PRO CINEMA, PRO TV International and PRO TV Chisinau), the Slovak Republic (TV Markíza, Markíza International, Doma and Dajto) and Slovenia (POP TV, Kanal A, Brio, Oto and Kino). CME is traded on Nasdaq and the Prague Stock Exchange under the ticker symbol “CETV”.

Parent - TV Bidco B.V.
Parent was incorporated on October 16, 2019, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement, and has not engaged in any business activities other than activities incidental to its incorporation and activities undertaken in connection with the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement. Upon completion of the Merger, CME will be a wholly-owned subsidiary of Parent.

Merger Sub - TV Bermuda Ltd.
Merger Sub is a wholly-owned direct subsidiary of Parent and was incorporated on October 2, 2019, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement, and has not engaged in any business activities other than activities incidental to its incorporation and activities undertaken in connection with the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement. Upon completion of the Merger, Merger Sub will merge with and into CME, and Merger Sub will cease to exist.
Parent and Merger Sub are each affiliated with PPF, headquartered in Amsterdam, the Netherlands. PPF invests in multiple market segments such as financial services, telecommunications, biotechnology, real estate and mechanical engineering. The reach of PPF spans from Europe to North America and across Asia. PPF owns assets exceeding €45 billion (as of December 2018).
The Merger (page 22)
The Merger Agreement provides that, on the terms and subject to the conditions of the Merger Agreement and the Statutory Merger Agreement, and in accordance with the Companies Act, Merger Sub will merge with and into the Company, with the Company continuing as the surviving company of such merger and a wholly-owned subsidiary of Parent (the “Surviving Company”). The Merger will be effective upon the issuance of a Certificate of Merger by the Bermuda Registrar of Companies or, if later, at the time and date shown on the Certificate of Merger (the “Effective Time”).

9




Merger Consideration
Capital Stock (page 73)
Under the Merger Agreement, at the Effective Time, without any action required by the Company, Parent, Merger Sub or any shareholder of the Company or any other person, each Class A Share issued and outstanding immediately prior to the Effective Time will be canceled and cease to exist automatically and each such Class A Share (other than shares owned by the Company, Parent, Merger Sub or any of their respective direct or indirect wholly-owned subsidiaries, in each case not held on behalf of third parties) will be converted into the right to receive the Common Share Consideration.
Under the Merger Agreement, at the Effective Time, without any action required by the Company, Parent, Merger Sub or any shareholder of the Company or any other person, the Series A Preferred Share issued and outstanding immediately prior to the Effective Time will be canceled and cease to exist automatically and will be converted into the right to receive the Series A Preferred Share Consideration and each Series B Preferred Share issued and outstanding immediately prior to the Effective Time will be canceled and cease to exist automatically and will be converted into the right to receive the Series B Preferred Share Consideration; provided that, among other things, any conversion of the Series A Preferred Share or any Series B Preferred Shares into Class A Shares on or after October 27, 2019 will be deemed to be null and void.
Treatment of Company Options and Company RSUs (page 51)
Immediately prior to the Effective Time, each outstanding unvested stock option to purchase Class A Shares (“Company Options”) will become immediately vested and be exercisable in full. At the Effective Time, each Company Option that remains outstanding and unexercised will be automatically canceled, and the holder thereof will be entitled to receive a cash payment in an amount equal to the product of (i) the total number of Class A Shares underlying such unexercised Company Option immediately prior to the Effective Time and (ii) the excess, if any, of the Common Share Consideration over the exercise price per Class A Share subject to each such Company Option.
Immediately prior to the Effective Time, all restrictions on restricted stock units and performance-based restricted stock units (collectively, “Company RSUs”) will lapse. Each Company RSU outstanding immediately prior to the Effective Time will become immediately vested and will be canceled in exchange for the right of the holder of such Company RSU to receive the Common Share Consideration with respect to each Class A Share underlying such Company RSU. With respect to any Company RSU that has performance-based vesting conditions, the number of Class A Shares subject to such Company RSU when such Company RSU vests and performance restrictions thereon lapse in accordance with the foregoing will be determined in accordance with the corresponding award agreement.
The Merger Agreement (page 72)
Regulatory Approvals Required for the Merger (pages 68 and 88)
Under the EU Merger Regulation, the Merger cannot be consummated until after the European Commission has issued its clearance decision. Communications laws and regulations of certain of the countries in which CME and its subsidiaries operate require that the applicable regulator in each such jurisdiction approve or be notified of the acquisition of control of a broadcasting license-holding company. For a more complete description of the regulatory approvals, see the section of this proxy statement captioned “Regulatory Approvals Required for the Merger.”

10




Closing Conditions (page 93)
The respective obligations of the Company, Parent and Merger Sub to consummate the Merger are subject to the satisfaction or, to the extent permitted by applicable law, waiver by the applicable parties, of certain conditions, as applicable, including the following:
approval of the Merger, the Merger Agreement and the Statutory Merger Agreement by 75% of the votes cast by the holders of Voting Shares, voting together as a single class, that are present in person or represented by proxy at the Special General Meeting, at which a quorum of shareholders holding a majority of the votes represented by the Voting Shares has been formed;
the absence of any statute, rule or regulation, or any order or injunction, that prohibits or makes illegal the consummation of the Merger or the transactions contemplated by the Merger Agreement;
the filing, occurrence or obtaining of certain required regulatory approvals, and such approvals being in full force and effect without the imposition of a Burdensome Condition (as defined in the section of this proxy statement captioned “The Merger—Regulatory Approvals Required for the Merger”);
the accuracy of the respective representations and warranties of the Company, Parent, and Merger Sub in the Merger Agreement, subject to certain materiality qualifiers and exceptions, as of October 27, 2019 and as of the closing date of the Merger;
compliance by the Company, Parent and Merger Sub in all material respects with their respective obligations under the Merger Agreement at or prior to the Effective Time; and
no change, effect, occurrence, development, circumstance, condition, state of facts or event having occurred since October 27, 2019, that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect (as defined in the section of this proxy statement captioned “The Merger Agreement-Representatives and Warranties”).
No Solicitation (page 83)
The Company has agreed in the Merger Agreement that it and its subsidiaries and representatives may not, directly or indirectly, among other things, solicit, knowingly encourage, knowingly facilitate, enter into, or participate in any discussions or any negotiations regarding any Competing Proposal (as defined under the section of this proxy statement captioned “The Merger Agreement—No Solicitation”) or the announcement of a Competing Proposal;
If the Company receives an unsolicited, bona fide written Competing Proposal from any third party (that did not result from a breach of the non-solicitation provisions of the Merger Agreement, summarized above) before obtaining the Requisite Shareholder Approval (as defined in the section of this proxy statement captioned “The Special General Meeting-Vote Required”), the Company may contact the party making such proposal to clarify the terms and conditions thereof; and if the Board of Directors determines in good faith, after consultation with the Company’s outside legal counsel and financial advisors and upon the recommendation thereof by the Special Committee, that such Competing Proposal would reasonably be expected to constitute a Superior Proposal (as defined under the section of this proxy statement captioned “The Merger Agreement—No Solicitation”), the Company may, subject to the terms and conditions provided in the Merger Agreement, engage in discussions or negotiations with such person with respect to such Competing Proposal.

11




Termination of the Merger Agreement and Termination Fees (pages 94 and 96)
In addition to the circumstances described above, Parent and the Company have certain rights to terminate the Merger Agreement under customary circumstances, including by mutual agreement or as a result of the imposition of laws or non-appealable court orders that make the Merger illegal or otherwise prohibit the Merger, certain uncured breaches of the Merger Agreement by the other party, the Merger having not been consummated by 11:59 p.m. Bermuda time on October 27, 2020, subject to possible extension by the Company or Parent to January 27, 2021 under certain circumstances (the “Outside Date”), and the Company’s shareholders failing to approve the Merger Proposal at the Special General Meeting (or any adjournment or postponement thereof). Under certain circumstances, the Company or Parent may be required to pay to the other a termination fee equal to $50 million, in each case, pursuant to the terms and conditions of the Merger Agreement. Please see the section of this proxy statement captioned “The Merger Agreement—Termination Fees” for more information.
Financing of the Merger; Repayment of Company Indebtedness (pages 59 and 91)
The Merger is not subject to a financing condition. In connection with the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement, PPF has provided Parent with an equity commitment of up to $1.099 billion pursuant to an equity commitment letter (the “Equity Commitment Letter”) and Parent has entered into a €1.1 billion term loan facility and a €50 million revolving credit facility agreement with BNP Paribas Fortis SA/NV, Crédit Agricole Corporate and Investment Bank, Credit Suisse AG, HSBC France, Komerční Banka, A.S., Société Générale, UniCredit Bank Czech Republic and Slovakia, A.S. and Unicredit S.P.A. (together with certain other banks and financial institutions following completion of primary syndication, the “Lenders” and such agreement, together with all schedules and ancillary documents thereto, collectively, the “Debt Financing Documents”), the proceeds of which will be applied to fund the Merger Consideration and the fees and expenses required to be paid at the closing of the Merger by Parent and Merger Sub, as contemplated by, and subject to the terms and conditions of, the Merger Agreement. For more information, please see “The Merger—Financing of the Merger” below.
Parent has agreed that it will take all actions reasonably necessary to cause, on the date of closing of the Merger, the repayment and satisfaction in full of the indebtedness and other obligations of the Company and its subsidiaries pursuant to certain specified debt financing arrangements (the “Company Indebtedness”). The Company has agreed that it will arrange for customary payoff letters, lien releases and other instruments of discharge to be executed and delivered in form and substance reasonably acceptable to Parent and take all other actions necessary to facilitate the payoff of the Company Indebtedness, the termination of the shareholder guarantees and the termination and release of all liens securing the Company Indebtedness and such shareholder guarantees. For more information, please see “The Merger Agreement—Financing—Repayment of Company Indebtedness; Shareholder Guarantees” below.
The Voting Agreement (page 62)
The Warner Parties, who as of the Record Date collectively hold 75.7% of the aggregate voting power of the Company’s total issued and outstanding Voting Shares (the “Warner Shares”), have entered into a Voting Agreement with CME and Parent pursuant to which the Warner Parties have committed to appear (in person or by proxy) and to vote (or cause to be voted) the Warner Shares in favor of the Merger Proposal and the Compensation Advisory Proposal, and take certain other actions in furtherance of the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement, including the Merger. The Voting Agreement will automatically terminate upon the earlier to occur of (i) the Effective Time, (ii) the termination of the Merger Agreement in accordance with its terms and (iii) the mutual written consent of the parties thereto. Additionally, the Warner Parties may terminate the Voting Agreement at any time following (a) a Change of Recommendation, (b) January 27, 2021, or (c) the enactment of an amendment, waiver or other modification

12




to the Merger Agreement materially adverse to the Warner Parties’ interest in the Company, or the enactment of any amendment, waiver or other modification to the obligations of Parent and the Company relating to the repayment and satisfaction in full of the Company Indebtedness and the release and discharge of all related liens and shareholder guarantees pursuant to the terms of the Merger Agreement. Certain covenants contained in the Voting Agreement will survive termination of the Voting Agreement in accordance with its terms. For more information, please see “The Merger-The Voting Agreement” below.
The Statutory Merger Agreement
The Statutory Merger Agreement, together with the Merger Agreement, governs the legal effects of the Merger under Bermuda law. A copy of the Statutory Merger Agreement is attached as Annex A-2 to this proxy statement.
Fairness Opinion of Allen & Company (page 37)
Allen & Company delivered a written opinion, dated October 27, 2019, to the Special Committee and the Board of Directors as to the fairness, from a financial point of view and as of the date of the opinion, of the Common Share Consideration to be received by holders of Class A Shares (other than the Company, Parent, Merger Sub, AT&T, each of their respective affiliates and the Dissenting Shareholders) pursuant to the Merger Agreement. The full text of Allen & Company’s written opinion, dated October 27, 2019, which describes the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken, is attached as Annex B to this proxy statement and is incorporated by reference herein in its entirety. The description of Allen & Company’s opinion set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion.
Recommendation of the Special Committee and the Board of Directors (pages 20 and 32)
The Board of Directors, after carefully considering, in consultation with CME’s management and financial and legal advisors, the various factors more fully described in the section of this proxy statement captioned “The Merger—Recommendation of the Special Committee and the Board of Directors and Reasons for the Merger,” and upon the recommendation of the Special Committee, has unanimously: (1) determined that the Common Share Consideration for each Class A Share constitutes fair value in accordance with the Companies Act; (2) determined that the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger, on the terms and subject to the conditions set forth therein, are advisable to, and in the best interests of, CME and its shareholders; (3) approved the execution, delivery and performance of the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger; (4) subject to the non-solicitation terms of the Merger Agreement, resolved to recommend that the shareholders of CME vote in favor of the adoption of the Merger, the Merger Agreement and the Statutory Merger Agreement; and (5) resolved that the Merger Agreement and the Statutory Merger Agreement be submitted to the shareholders of CME at the Special General Meeting for their adoption and approval.
The Board of Directors, taking into consideration, among other things, the recommendation of the Special Committee, unanimously recommends that the CME shareholders vote: (1) “FOR” the Merger Proposal; (2) “FOR” the Compensation Advisory Proposal; and (3) “FOR” the Adjournment Proposal.
For more information, please see the section of this proxy statement captioned “Proposal 1: Approval of the Merger Agreement, the Statutory Merger Agreement and the Merger—The Board of Directors’ Recommendation; Company Board Recommendation Change.

13




Change of Recommendation (page 85)
Prior to the approval of the Merger Proposal by shareholders, under certain circumstances, the Board of Directors may withdraw, qualify, amend or modify its recommendation that the shareholders approve the Merger Proposal if it determines in good faith (after consultation with outside legal counsel and upon the recommendation thereof by the Special Committee) that failure to do so would be inconsistent with its fiduciary duties under applicable laws. However, the Board of Directors cannot withdraw, qualify, amend or modify the foregoing recommendation unless it complies with certain procedures in the Merger Agreement, including, but not limited to, negotiating with Parent in good faith over a five business day period and, taking into account all adjustments to the terms of the Merger Agreement that may be offered in writing by Parent, determining in good faith (after consultation with outside legal counsel and upon the recommendation thereof by the Special Committee) that the failure to make a Change of Recommendation (as defined in the section of this proxy statement captioned “The Merger Agreement-The Board of Directors’ Recommendation; Change of Recommendation”) would continue to be inconsistent with its fiduciary duties under applicable laws. The termination of the Merger Agreement by Parent following a Change of Recommendation, or the termination of the Merger Agreement by CME in order to enter into a definitive agreement with respect to a Superior Proposal (as defined in the section of this proxy statement captioned “The Merger Agreement-The Board of Directors’ Recommendation; Change of Recommendation”) will, in each case, result in the payment by CME of the Company Termination Fee of $50 million to Parent.
Interests of CME’s Directors and Executive Officers in the Merger (page 50)
CME’s directors and executive officers (all of whom are named executive officers) may have interests in the Merger that are different from, or in addition to, shareholders generally. In approving the Merger Agreement, the Statutory Merger Agreement and the Merger and in recommending that the Merger Proposal, the Compensation Advisory Proposal and the Adjournment Proposal be approved by shareholders, each of the Special Committee and the Board of Directors was aware of and considered these interests, among other matters, to the extent that these interests existed at the time. These interests include, among others, the treatment of Company RSUs and Company Options in the Merger, severance entitlements and protections under applicable employment agreements, retention awards for named executive officers, and the rights to indemnification and director and officer liability insurance coverage following the Merger. See “The Merger—Interests of CME’s Directors and Executive Officers in the Merger” below.
Effect on CME if the Merger is Not Completed (page 70)
If the Merger Proposal is not approved by shareholders, or if the Merger is not completed for any other reason, among other things:
CME shareholders will not be entitled to, nor will they receive, any payment for their Voting Shares pursuant to the Merger Agreement;
CME will remain a public company, CME’s Class A Shares will continue to be listed and traded on Nasdaq and the Prague Stock Exchange, and will continue to be registered under the Exchange Act, and CME will continue to file periodic reports with the SEC; and
under certain specified circumstances, CME will be required to pay Parent the Company Termination Fee of $50 million upon the termination of the Merger Agreement; and under certain other specified circumstances, Parent will be required to pay CME the Parent Termination Fee of $50 million upon the termination of the Merger Agreement (for more information, please see the section of this proxy statement captioned “The Merger Agreement—Termination Fees”).

14




Delisting and Deregistration of Class A Shares of CME (page 89)
CME and Parent will cooperate in taking, or causing to be taken, all actions necessary to terminate the registration of the Class A Shares under the Exchange Act and to cause the Class A Shares to be de-listed from Nasdaq and the Prague Stock Exchange, in each case, effective at or after the Effective Time.
Material U.S. Federal Income Tax Consequences of the Merger (page 65)
The receipt of cash by CME shareholders in exchange for their Class A Shares in the Merger will be a taxable transaction to U.S. Holders (as defined under the section of this proxy statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”) for U.S. federal income tax purposes. CME shareholders should read the section of this proxy statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger.” CME shareholders are urged to consult their own tax advisors concerning the U.S. federal income tax consequences relating to the Merger in light of their particular circumstances and any consequences arising under U.S. federal non-income tax laws or the laws of any state, local or non-U.S. taxing jurisdiction.
Dissenting Shares (pages 65 and 74)
Under Bermuda law, holders of the Class A Shares have rights of appraisal, pursuant to which those holders of Class A Shares who do not vote in favor of the Merger Proposal and who are not satisfied that they have been offered fair value for their shares will be permitted to apply to the Supreme Court of Bermuda (the “Bermuda Court”) for an appraisal of the fair value of their shares within one month of the giving of the notice of the Special General Meeting and otherwise fully comply with the requirements for seeking appraisal under the Companies Act (such person, a “Dissenting Shareholder” and all Class A Shares held by such Dissenting Shareholder, “Dissenting Shares”). In the event that the “fair value” of a Class A Share as appraised by the Bermuda Court under the Companies Act is greater than the Common Share Consideration, Dissenting Shareholders who have satisfied the appraisal requirements under the Companies Act will be entitled to receive, in addition to the Common Share Consideration, such difference from the Surviving Company by payment made within one month after the final determination by the Bermuda Court of such “fair value.” If the “fair value” of Class A Shares as appraised by the Bermuda Court is lower than or equal to the Common Share Consideration, such Dissenting Shareholder will not be entitled to receive any consideration in addition to the Common Share Consideration. Under the Voting Agreement, the Warner Parties have waived their rights of appraisal under Bermuda law with regards to their Warner Shares in connection with the Merger. For a more complete description of the available appraisal rights, see the section of this proxy statement captioned “The Merger—Dissenters’ Rights of Appraisal for Company Shareholders.

15




FORWARD-LOOKING STATEMENTS
This proxy statement, and any documents to which CME refers in this proxy statement, contain not only historical information, but also forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent CME’s current expectations or beliefs concerning future events, including, but not limited to, statements related to the expected completion and timing of the Merger, expected benefits and costs of the Merger, management plans and other information relating to the Merger, financial projections prepared by CME’s management and underlying assumptions, compensation of CME’s directors and named executive officers, strategies and objectives of CME for future operations and other information relating to the Merger. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “intends,” “forecasts,” “should,” “estimates,” “contemplate,” “future,” “goal,” “potential,” “predict,” “project,” “projection,” “target,” “seek,” “may,” “will,” “could,” “should,” “would,” “assuming,” and similar expressions are intended to identify forward-looking statements. Shareholders are cautioned that any forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks detailed in CME’s filings with the SEC, including in its most recent filings on Forms 10-K and 10-Q, factors and matters described or incorporated by reference in this proxy statement, and the following factors:
the parties’ ability to consummate the Merger;
the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement under its terms by either party;
the inability to complete the Merger due to the failure to obtain shareholder approval;
the risk that the Merger Agreement may be terminated in certain circumstances that require CME to pay Parent the Company Termination Fee of $50 million;
the nature, cost and outcome of any litigation or other legal proceedings that may be instituted against CME and others related to the Merger;
risks that the proposed Merger disrupts CME’s current plans and operations or affects its ability to retain or recruit key employees;
risks related to diverting the attention of CME’s management and employees from ongoing business operations;
the fact that receipt of the all-cash Common Share Consideration in exchange for CME’s Class A Shares would be taxable to shareholders that are treated as U.S. Holders (as defined under the section of this proxy statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”) for U.S. federal income tax purposes;
the fact that, if the Merger is completed, shareholders will forgo the opportunity to realize the potential long-term value of the successful execution of CME’s current strategy as a public company;
the fact that under the terms of the Merger Agreement, CME is unable to solicit competing proposals;

16




the effect of the announcement or pendency of the Merger on CME’s business relationships (including, without limitation, customers, suppliers and other business partners), operating results and business generally;
the amount of the costs, fees, expenses and charges related to the Merger Agreement, the Statutory Merger Agreement or the Merger;
risks that CME’s Class A Share price may decline significantly if the Merger is not completed; and
risks related to obtaining the requisite consents to the Merger, including the timing and receipt of regulatory approvals from various governmental entities, including any conditions, limitations or restrictions placed on these approvals, and the risk that one or more governmental entities may deny approval.
Consequently, all of the forward-looking statements that CME makes in this proxy statement are qualified by the information contained or incorporated by reference herein, including: (1) the information contained under this caption; and (2) the information contained under the sections entitled “Risk Factors” and “Forward-looking Statements” in the consolidated financial statements and notes thereto in CME's annual report on Form 10-K for the fiscal year ended December 31, 2018, quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2019 and any subsequent periodic and current reports filed with the SEC. No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements.
Except as required by applicable law, CME undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. Shareholders are advised to consult any future disclosures that CME makes on related subjects as may be detailed in its other filings made from time to time with the SEC.

17




THE SPECIAL GENERAL MEETING
This proxy statement is being provided to CME shareholders as part of a solicitation by or on behalf of the Board of Directors of proxies for use at the Special General Meeting.
Date, Time and Place
CME will hold the Special General Meeting on February 27, 2020 at Citco (Bermuda) Limited, O’Hara House, 3 Bermudiana Road, Hamilton HM 08, Bermuda, at 10:00 a.m., Bermuda time.

Purpose of the Special General Meeting
At the Special General Meeting, CME will ask shareholders (1) to consider and vote to approve the Merger Proposal; (2) to consider and vote on an advisory (non-binding) basis to approve the Compensation Advisory Proposal; and (3) to consider and vote on the Adjournment Proposal.
The vote on the Compensation Advisory Proposal is a vote separate and apart from the vote to approve the Merger Proposal. Accordingly, a shareholder may vote to approve the Merger Proposal and vote not to approve the Compensation Advisory Proposal, and vice versa. Because the vote on the Compensation Advisory Proposal is only advisory in nature, it will not be binding on CME, Parent or the Surviving Company. Accordingly, because CME is contractually obligated to pay such merger-related compensation, the compensation will be payable, subject only to the conditions applicable thereto, if the Merger Proposal is approved, regardless of the outcome of the advisory vote.

Record Date; Shares Entitled to Vote; Quorum; Abstentions and Broker Non-Votes
Only shareholders of record at the close of business on the Record Date are entitled to notice of the Special General Meeting and to vote at the Special General Meeting or any postponement or adjournment thereof as set out here.
At the close of business on the Record Date, there were issued and outstanding 253,607,026 Class A Shares, one Series A Preferred Share, and 200,000 Series B Preferred Shares. There were no shares of Class B Common Stock, par value $0.08 per share, outstanding. The shareholder of record of the Series A Preferred Share is entitled to one vote for each of the 11,211,449 Class A Shares underlying such Series A Preferred Share. The shareholder of record of the Series B Preferred Shares is entitled to one vote for each of the 111,136,877 Class A Shares underlying such Series B Preferred Shares.
For each proposal, the presence, in person or by proxy, or in the case of a corporation, by its duly authorized representative, of shareholders entitled to cast at least a majority of the total number of votes entitled to be cast for such proposal at the Special General Meeting constitutes a quorum. If a shareholder attends the Special General Meeting and abstains from voting or is represented by a proxy and abstains from voting, that abstention will be counted toward the presence of a quorum at the Special General Meeting. Each “broker non-vote” will also be counted toward the presence of a quorum at the Special General Meeting. A “broker non-vote” generally occurs when a bank, broker or other nominee holding shares on your behalf does not vote on a proposal because the bank, broker or other nominee has not received your voting instructions and lacks discretionary power to vote the shares. In the event that a quorum is not present within half an hour from the time appointed for the Special General Meeting, the Special General Meeting shall, pursuant to the Company’s bye-laws, stand adjourned to the same day one week later, at the same time and place or to such time and place as the Board of Directors may determine. If at such adjourned meeting a quorum is not present within half an hour from the time appointed for holding the meeting, the meeting will be dissolved.

18




Vote Required
A vote of at least 75% of the votes cast in person or by proxy by the holders of Voting Shares outstanding at the close of business on the Record Date, voting together as a single class, is required to approve the Merger Proposal, provided that a quorum is present (the “Requisite Shareholder Approval”). The Warner Parties, who as of the Record Date collectively hold 75.7% of the aggregate voting power of the Company’s total issued and outstanding shares eligible to vote on the Merger, have entered into the Voting Agreement with CME and Parent pursuant to which the Warner Parties have committed to appear (in person or by proxy) and to vote (or cause to be voted) the Warner Shares in favor of, and take certain other actions in furtherance of, the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement, including the Merger, and any “say on pay” vote regarding executive compensation, such as the Compensation Advisory Proposal. Accordingly, unless the Voting Agreement is terminated in accordance with its terms, the Merger Proposal is expected to be approved. Approval of the Compensation Advisory Proposal requires a simple majority of the votes cast in person or by proxy by the holders of Class A Shares outstanding at the close of business on the Record Date and the holder of the Series A Preferred Share, voting together as a single class, provided that a quorum is present. Approval of the proposal to adjourn the Special General Meeting, requires a simple majority of the votes cast in person or by proxy by the holders of Class A Shares outstanding at the close of business on the Record Date and the holder of the Series A Preferred Share, voting together as a single class, provided that a quorum is present.
Abstentions and broker “non-votes” are included in the determination of the number of shares present at the Special General Meeting for quorum purposes but are not counted in the tabulation of the votes cast on proposals presented to shareholders in the Special General Meeting.
Shares Held by CME’s Directors and Executive Officers
As of the close of business on the Record Date, CME’s directors and executive officers beneficially owned and were entitled to vote, in the aggregate, 3,295,193 Class A Shares, representing approximately (i) 0.9% of the aggregate voting power of the total issued and outstanding Voting Shares and (ii) 1.2% of the aggregate voting power of the total issued and outstanding Class A Shares and the Series A Preferred Share. For more information, please see the sections of this proxy statement captioned “The Merger—Interests of CME’s Directors and Executive Officers” and “Security Ownership of Certain Beneficial Owners and Management.”
CME’s directors and executive officers have informed CME that they currently intend to vote all of their respective shares (1) “FOR” the Merger Proposal, (2) “FOR” the Compensation Advisory Proposal and (3) “FOR” the Adjournment Proposal.
Voting of Proxies
Procedures for voting shares by proxy vary depending on whether you are a registered shareholder (meaning your name appears as a shareholder in CME’s register of shareholders) or a beneficial owner who holds shares through a broker, bank or other nominee. Registered shareholders may vote their shares by proxy by completing and returning the proxy card accompanying this proxy statement. Beneficial owners should follow the instructions of their broker, bank or other nominee to vote their shares by proxy. The shares represented by proxies will be voted at the Special General Meeting in accordance with the directions given therein. If you are a registered shareholder and return a proxy card signed but without instructions for voting, the shares will be voted on the proposals as recommended by the Board of Directors. If you are a beneficial owner and do not provide your bank, broker or other nominee with instructions for voting, your broker, bank or other nominee cannot vote your shares on any of the proposals. This will result in a “broker non-vote” on the proposals (unless you have obtained a “legal proxy” from your bank, broker or other nominee to attend

19




and vote at the Special General Meeting in person). The impact of “broker non-votes” is explained in further detail under the sections of this proxy statement captioned “The Special General Meeting—Record Date; Shares Entitled to Vote; Quorum; Abstentions and Broker Non-Votes” and “The Special General Meeting—Vote Required” above. For shareholders who wish to vote their shares in person at the Special General Meeting, procedures differ depending on whether you are a registered shareholder or beneficial owner. Please see the section of this proxy statement captioned “Questions and Answers—May I attend the Special General Meeting in person?”.
Revocability of Proxies     
Shareholders may change their vote at any time before the vote is taken at the Special General Meeting by revoking their proxies. Registered shareholders may revoke their proxies by notice in writing to the Company Secretary, by voting or otherwise revoking in person at the Special General Meeting or by presenting a later-dated proxy. Beneficial owners must follow the instructions of their broker, bank or other nominee to revoke their voting instructions. Please note that attending the Special General Meeting in person will not revoke a prior executed proxy without following the procedures set forth above.
Recommendation of the Special Committee and the Board of Directors
The Board of Directors, after carefully considering, in consultation with CME’s management and financial and legal advisors, various factors more fully described in the section of this proxy statement captioned “The Merger—Recommendation of the Special Committee and the Board of Directors and Reasons for the Merger,” and upon the recommendation of the Special Committee, has unanimously: (1) determined that the Common Share Consideration for each Class A Share constitutes fair value in accordance with the Companies Act; (2) determined that the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger, on the terms and subject to the conditions set forth therein, are advisable to, and in the best interests of, CME and its shareholders; (3) approved the execution, delivery and performance of the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger; (4) resolved that the Merger Agreement and the Statutory Merger Agreement be submitted to the shareholders of CME at the Special General Meeting for their adoption and approval; and (5) subject to the non-solicitation terms of the Merger Agreement, resolved to recommend that the shareholders of CME vote in favor of the adoption of the Merger, the Merger Agreement and the Statutory Merger Agreement.
Accordingly, the Board of Directors, taking into consideration, among other things, the recommendation of the Special Committee, unanimously recommends that you vote: (1) “FOR” the Merger Proposal; (2) “FOR” the Compensation Advisory Proposal; and (3) “FOR” the Adjournment Proposal.

20




Solicitation of Proxies
The Board of Directors is soliciting your vote and CME will bear the cost of preparing, assembling and mailing the enclosed form of proxy, this proxy statement and other materials which may be sent to shareholders in connection with this solicitation. Officers and regular employees of CME may solicit proxies by mail, telephone, telegraph, electronic mail and personal interview, for which no additional compensation will be paid. CME may reimburse persons holding shares in their names or in the names of nominees for their reasonable expenses in sending proxies and proxy material to their principals.

The Company has engaged Georgeson LLC, which we refer to as Georgeson, to assist in the solicitation of proxies for the Special General Meeting. The Company estimates that it will pay Georgeson a fee of $10,500, plus telephone charges. The Company has agreed to reimburse Georgeson, or, pay directly, certain fees and expenses and will also indemnify Georgeson, its subsidiaries and their respective directors, officers, employees and agents against certain claims, liabilities, losses, damages and expenses.
Anticipated Date of Completion of the Merger
Assuming timely satisfaction of necessary closing conditions, including the approval by shareholders of the Merger Proposal and the receipt of necessary regulatory approvals, CME anticipates that the Merger will be consummated around the middle of 2020.
Delisting and Deregistration of Class A Shares of CME
If the Merger is completed, the Class A Shares will be delisted from Nasdaq and the Prague Stock Exchange and deregistered under the Exchange Act, and the Class A Shares will no longer be publicly traded.
Other Matters
At this time, CME knows of no other matters to be voted on at the Special General Meeting and has agreed in the Merger Agreement that no other matters (other than customary procedural matters) will be brought before the Special General Meeting. However, if any other matters properly come before the Special General Meeting or any adjournment or postponement thereof, your Class A Shares and the Series A Preferred Share will be voted in accordance with the discretion of the appointed proxy holders. Pursuant to the Certificate of Designation of the Series B Preferred Shares, Series B Preferred Shares will not be voted on such additional matters unless provided otherwise by CME’s bye-laws or applicable Bermuda law.
You should not send documents representing your shares with the proxy card. If the Merger is completed, the paying agent for the Merger will send you transmittal materials and instructions for exchanging your shares for the consideration to be paid to former shareholders in connection with the Merger. If your shares are held in “street name” through a bank, brokerage firm or other nominee, you will receive instructions from your bank, brokerage firm or other nominee as to how to effect the surrender of your “street name” shares in exchange for the consideration.

21




Questions and Additional Information
If you would like additional copies of the proxy materials or need help voting your shares, please contact CME’s proxy solicitor:
Georgeson LLC
1290 Avenue of the Americas, 9
th Floor
New York, New York 10104
Toll free number: +1 (866) 296-5716
Email:
centraleuropeanmedia@georgeson.com

22




THE MERGER
This discussion of the Merger is qualified in its entirety by reference to the Merger Agreement and the Statutory Merger Agreement, which are attached to this proxy statement as Annex A-1 and Annex A-2, respectively, and incorporated into this proxy statement by reference. You should carefully read and consider both the Merger Agreement and Statutory Merger Agreement in their entirety because these documents contain important information about the Merger and how it affects you.
Parties Involved in the Merger
Central European Media Enterprises Ltd.
O’Hara House, 3 Bermudiana Road
Hamilton HM 08, Bermuda
Telephone number: +1 (441) 296-1431

CME is a media and entertainment company operating leading businesses in five Central and Eastern European markets with an aggregate population of approximately 45 million people. CME's operations broadcast 30 television channels in Bulgaria (bTV, bTV Cinema, bTV Comedy, bTV Action, bTV Lady and Ring), the Czech Republic (Nova, Nova 2, Nova Cinema, Nova Sport 1, Nova Sport 2, Nova International, Nova Action and Nova Gold), Romania (PRO TV, PRO 2, PRO X, PRO GOLD, PRO CINEMA, PRO TV International and PRO TV Chisinau), the Slovak Republic (TV Markíza, Markíza International, Doma and Dajto) and Slovenia (POP TV, Kanal A, Brio, Oto and Kino). CME is traded on Nasdaq and the Prague Stock Exchange under the ticker symbol “CETV”.

TV Bidco B.V.
c/o PPF Group N.V.
Strawinskylaan 933
1077XX Amsterdam, the Netherlands
Telephone number: +31 20 88112120

Parent was incorporated on October 16, 2019, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement, and has not engaged in any business activities other than activities incidental to its incorporation and activities undertaken in connection with the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement and the arranging of the Equity Financing and Debt Financing in connection with the Merger. Upon completion of the Merger, CME will be a wholly-owned subsidiary of Parent.

TV Bermuda Ltd.
Park Place, 55 Par La Ville Road, Third Floor
Hamilton HM11, Bermuda
Telephone number: +1 (441) 242-1500
Merger Sub is a wholly-owned direct subsidiary of Parent and was incorporated on October 2, 2019, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement, and has not engaged in any business activities other than activities incidental to its incorporation and activities undertaken in connection with the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement and arranging of the Equity Financing and Debt Financing in connection with the Merger. Upon completion of the Merger, Merger Sub will merge with and into CME, and Merger Sub will cease to exist.

23




Parent and Merger Sub are each affiliated with PPF, headquartered in Amsterdam, the Netherlands. PPF invests in multiple market segments such as financial services, telecommunications, biotechnology, real estate and mechanical engineering. The reach of PPF spans from Europe to North America and across Asia. PPF owns assets exceeding €45 billion (as of December 2018). In connection with the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement, PPF has provided Parent with an equity commitment of up to $1.099 billion, subject to the terms and conditions of the Equity Commitment Letter.
Effect of the Merger
Upon the terms and subject to the conditions of the Merger Agreement, the Statutory Merger Agreement and the applicable provisions of the Companies Act, Merger Sub will merge with and into CME, with CME continuing as the Surviving Company. As a result of the Merger, CME will become a wholly-owned subsidiary of Parent, and its Class A Shares will no longer be publicly traded and will be delisted from Nasdaq and the Prague Stock Exchange. In addition, CME’s Class A Shares will be deregistered under the Exchange Act, and it will no longer file periodic reports with the SEC. If the Merger is completed, you will not own any common shares of the Surviving Company. The Merger will become effective upon the issuance of a Certificate of Merger with respect to the Merger by the Registrar of the Companies in Bermuda.

Merger Consideration
See the section of this proxy statement captioned “The Merger Agreement—Merger Consideration.” for more information.
Background of the Merger
The Board of Directors regularly reviews the performance, ongoing business plans, future prospects and overall strategic direction of the Company, as well as developments in the industry in which the Company operates, and considers potential opportunities to achieve the Company’s performance and strategic objectives and enhance value for shareholders. As part of this evaluation, the Board of Directors from time to time has considered a variety of strategic alternatives for the Company, such as equity and debt financings (including a rights offering) as well as asset sales, capital allocation alternatives (including dividends) and other strategic transactions with third parties to further the Company’s business and strategic objectives, and has reviewed the benefits and risks of such transactions in light of the Company’s overall objectives.
In addition, from time to time, members of the management of the Company have met with representatives of other companies involved in the markets and industries in which the Company operates to engage in discussions regarding industry developments and potential strategic transactions, including the potential sale of certain assets of the Company or other potential business combination transactions.
From May to October 2016, the Company and PPF engaged in discussions regarding developments in the media industry in the countries in which CME operates and the potential for a strategic transaction. However, these discussions were preliminary in nature and did not result in the parties pursuing any potential strategic transaction.

24




On July 10, 2017, the Company announced that it had entered into an agreement with Slovenia Broadband S.a.r.l., a wholly owned subsidiary of United Group B.V., for the sale of the Company’s Croatian and Slovenian operations.
From late August until December 2017, the Company engaged in discussions with a European financial sponsor, which we refer to as “Party A”, regarding a potential business combination transaction or other strategic transaction involving the Company and its assets. Party A purported to represent a consortium that included an Asian strategic investor. In connection with these discussions, the Company retained Allen & Company as its financial advisor. During that same period, the Company and PPF also engaged in discussions regarding a potential business combination or other strategic transaction involving the Company and its assets. In order to facilitate continued discussions and information sharing, the Company entered into confidentiality agreements with Party A, other parties reported to be members of the consortium represented by Party A, and PPF. These discussions regarding a potential business combination were preliminary in nature. In December 2017, PPF informed Company management that it was discontinuing discussions regarding a potential transaction. In January 2018, Party A informed Company management that it had not succeeded in forming a consortium and it was no longer pursuing a potential transaction.
Beginning in April 2018, the Company engaged in discussions from time to time with PPF regarding a potential business combination transaction or other strategic transaction involving the Company and its assets. These discussions regarding a potential transaction were preliminary in nature. In December 2018, PPF informed the Company that it was intending to defer further discussions with the Company until the following year .
On June 14, 2018, AT&T completed its acquisition of Time Warner Inc. (n/k/a Warner Media, LLC), following their announcement on October 22, 2016 that they had entered into a definitive merger agreement.
On July 31, 2018, the Company completed the sale of its Croatian operations, and on January 18, 2019, the Company announced that it had terminated the agreement for the prospective sale of its Slovenian operations.  
From November 2018 to February 2019, the Company engaged in discussions with a European strategic investor, which we refer to as “Party B”, regarding a potential strategic transaction involving certain assets of the Company. The discussions were preliminary in nature, and in February 2019, Party B informed the Company that it was no longer interested in pursuing a transaction.
From December 2018 until March 2019, the Company engaged in discussions with a financial sponsor, which we refer to as “Party C,” regarding a potential strategic transaction involving the Company. The Company entered into a confidentiality agreement with Party C in order to facilitate continued discussions and information sharing. The discussions were preliminary in nature.
At a meeting of the Board of Directors on March 5, 2019, attended by Company management, Allen & Company and the Company’s legal advisor, Covington & Burling LLP (“Covington”), the Board of Directors considered recent discussions regarding potential strategic transactions involving Party B, Party C and PPF. Following those discussions, the Board of Directors resolved to establish the Special Committee, consisting of Messrs. John Billock, Alfred Langer and Parm Sandhu and Ms. Kelli Turner. The Board of Directors delegated to the Special Committee the authority and power of the Board of Directors to review and evaluate transactions involving all or a portion of the Company and other alternative transactions that may be available, and as part of this strategic review process, to negotiate a potential strategic transaction or other available alternative transaction with the assistance of the Company's financial advisors, Allen & Company and Merrill Lynch International (“BAML”).

25




On March 20, 2019, the Special Committee met with representatives from Allen & Company and Covington to discuss the potential strategic review process. The Special Committee directed Allen & Company to commence preparation of a strategic review process whereby Allen & Company, BAML and Company management would contact potential acquirers on a confidential basis to assess their interest in a possible business combination transaction involving the Company. On the same day, the members of the Special Committee also met with representatives of AT&T and informed them of the Company’s plans to launch a strategic review process.
On March 21, 2019, representatives from Company management, AT&T and PPF met via teleconference to discuss PPF’s potential interest in pursuing a business combination transaction involving the Company. Also in attendance were Allen & Company and J.P. Morgan Securities plc (“JPM”), financial advisor to PPF.
On March 25, 2019, the Company publicly announced that the Board of Directors had commenced a process to explore and evaluate potential strategic alternatives for the Company and had formed the Special Committee of independent directors, working with the Company's management and legal and financial advisors, to lead the process.
At the end of March 2019 and in early April 2019, upon the direction of the Special Committee, Allen & Company and BAML, on the Company’s behalf, contacted more than 80 potential bidders, including strategic investors and financial sponsors to gauge their interest in making a proposal to engage in a business combination transaction involving the Company. Such potential bidders included, among others, potential bidders that Allen & Company and BAML identified to the Special Committee who, based on their professional judgment and experience of the market and the broadcast media industry, were most likely to be interested in a potential business combination transaction involving the Company. Eighteen potential bidders entered into confidentiality agreements with the Company (including PPF, Party B and Party C, which had entered into confidentiality agreements with the Company prior to the March 25, 2019 announcement). During April and early May 2019, the Company’s management, together with the Company's financial advisors, held management presentation meetings or provided a management presentation to sixteen potential counterparties (eight financial sponsors and eight strategic investors) and held additional diligence meetings with four of those parties.
On March 30, 2019, Party C submitted to the Company informal discussion materials on a proposed equity investment and refinancing of the Company’s indebtedness.
Between April 4, 2019 and May 15, 2019, the Special Committee met to review the Company’s financial projections, and subsequently began to receive updates regarding the ongoing strategic review process from Company management and representatives from Allen & Company. On April 26, 2019, at the request of the Special Committee, Allen & Company delivered a letter to each of the sixteen bidders instructing them to submit by May 15, 2019 their preliminary, non-binding proposals to acquire the Company.
On May 15, 2019, the Company received preliminary, non-binding proposals from Party C and from another potential acquirer, a strategic investor that we refer to as “Party D.” Party C proposed the issuance by the Company of a convertible voting preferred equity instrument having a value of $275 million to $300 million, with the proceeds to be used to redeem the Preferred Shares beneficially owned by AT&T (reflecting an implied price of $2.25 to $2.45 per Class A Share on a fully-diluted basis), the issuance of 11.2 million voting penny warrants and a refinancing by the Company of its existing senior indebtedness guaranteed by Warner Media. Party D proposed an all-cash acquisition of the Company at an implied enterprise value of approximately $2.2 billion (assuming a normalized level of working capital), reflecting an implied price of $4.01 per Class A Share on a fully-diluted basis.

26




On May 16, 2019, the Company received preliminary, non-binding proposals from two additional bidders, both of whom are strategic investors which we refer to as “Party E” and “Party F,” respectively. Party E proposed to acquire the Company’s Slovakian, Slovenian and Bulgarian business operations, individually or on a combined basis, at differing value ranges for each segment. Specifically, Party E proposed to acquire the Company’s Slovakian business for $175 to $215 million, its Slovenian business for $130 to $160 million and its Bulgarian business for $125 to $155 million. Party F proposed to purchase an interest in the Company of 10% to 15% for $157 to $235 million, reflecting an implied price of $4.104 per Class A Share on a fully-diluted basis; however, the proposal was contingent on one or more co-bidders being identified to participate in the proposed transaction in a consortium with Party F in order to acquire the Company.
On May 17, 2019, the Special Committee met with representatives from Allen & Company and Covington to receive an oral summary presentation of the bids received from Party C, Party D, Party E and Party F, and, following discussion of each bid, the Special Committee decided on a preliminary basis to pursue the proposals from potential acquirers of the entire company.
On May 21, 2019, the Special Committee met with representatives from Allen & Company and Covington to further discuss the strategic review process and review the bids received. A representative from Allen & Company and Company management provided an update to the Special Committee regarding the outreach efforts to potential bidders and provided an overview of the preliminary, non-binding bids received from Party C, Party D, Party E and Party F. Allen & Company discussed with the Special Committee the implied offer prices per Class A Share, on a fully-diluted basis, presented in each of the bids to acquire the entire Company, including a comparison of such implied offer prices against the trading price of the Class A Shares as of March 22, 2019, the last full trading day prior to the Company’s announcement that it was pursuing potential strategic alternatives. Allen & Company also discussed with the Special Committee on a preliminary basis certain financial aspects of the Company. The Special Committee and Allen & Company discussed next steps for the second stage of the process, including requests from potential bidders for additional time to submit bids.
Subsequent to the meeting, a representative from Allen & Company, at the Special Committee’s direction, contacted Party D and Party F to invite them into the second stage of the strategic review process, where each potential bidder would be able to undertake a more detailed due diligence review of the Company. The invitation provided for the delivery of a formal process letter at a later date regarding the submission of a revised definitive proposal. Following receipt of its invitation, Party F conducted limited additional diligence but did not participate further in the process.
On May 29, 2019, PPF submitted a preliminary, non-binding proposal to acquire the Company in an all-cash transaction at an enterprise value range of $2.0 to 2.1 billion, reflecting an implied price range of $3.50 to $3.75 per Class A Share on a fully-diluted basis (without giving effect to certain debt-like items referenced by PPF). In its proposal, PPF requested an eight-week period of exclusivity to complete due diligence and finalize definitive transaction documentation. PPF also indicated that it would be willing to pursue alternative transactions, including the direct acquisition of AT&T’s ownership interest of the Company and refinancing of the Company’s existing indebtedness, or the direct acquisition of the Company’s businesses in the Czech Republic and Slovakia.
On May 30, 2019, the Special Committee convened a telephonic meeting with the Company's legal and financial advisors present to discuss the preliminary, non-binding proposal received from PPF. After a review of PPF’s proposal and consideration of proposals received from other bidders, the Special Committee subsequently instructed Allen & Company to contact JPM to communicate that PPF would not be invited to the second stage of the process based on its proposal of May 29, 2019.

27




On June 4, 2019, PPF submitted a revised proposal to acquire the Company at an enterprise value of approximately $2.2 billion, reflecting an implied price of $4.05 per Class A Share on a fully-diluted basis (without giving effect to certain debt-like items referenced by PPF). In its proposal, PPF requested an eight-week period of exclusivity to complete due diligence and finalize definitive transaction documentation.
On June 5, 2019, the Special Committee convened by telephone with Allen & Company and Covington present to discuss the revised proposal from PPF. Following the discussion, the Special Committee determined to invite PPF into the second stage of the process. The Special Committee also instructed Allen & Company and Covington to make available to each of Party D and PPF initial drafts of the proposed Merger Agreement to be entered into in connection with the potential transaction as well as an initial draft of the Voting Agreement to be entered into among the Company, the bidder and the Warner Parties, requiring, among other things, that the Warner Parties vote in favor of the transaction and against any alternative acquisition transaction during the term of the Voting Agreement.
On June 6, 2019, Allen & Company delivered drafts of the Merger Agreement and Voting Agreement to each of PPF and Party D, and requested each of PPF and Party D to provide comments on such agreements no later than June 27, 2019. Also on June 6, 2019, Party D indicated to Allen & Company of its interest in establishing a strategic partnership with AT&T.
On June 10, 2019, at the request of the Special Committee, the Company entered into a mutual confidentiality agreement with Party D (to replace the prior unilateral confidentiality agreement) for the purpose of exchanging more detailed confidential information between the parties. On June 11 and June 12, 2019, representatives of each of the Company and Party D held due diligence meetings in Prague and London.
On June 14, 2019, PPF contacted Company management to notify the Company of PPF’s intention to proceed jointly with a financial sponsor and a European strategic investor, which entities we refer to collectively as “Party G,” in connection with PPF’s proposal regarding a potential business combination transaction involving the Company. Also on June 14, 2019, at the request of the Special Committee, Allen & Company delivered formal process letters to each of PPF and Party D, instructing each bidder to submit a revised, definitive proposal with respect to a potential business combination transaction involving the Company no later than the close of business on July 15, 2019 and to provide any comments on the draft Merger Agreement and Voting Agreement to Covington no later than June 27, 2019.
On June 18, 2019, the Special Committee met with the Company's financial and legal advisors to discuss the status of the strategic review process. Members of Company management and representatives from Allen & Company provided an update on Party D’s due diligence review with respect to the Company and reported on the intention of Party D to seek a establish a broader strategic partnership with AT&T; they also reported PPF’s intention to partner with Party G in connection with PPF’s proposal to acquire the Company. At this meeting, the Special Committee also discussed with Company management and the Company's financial advisors potential risks to the business of the Company and related sensitivities with respect to the Company’s financial projections reflecting the possible impact of such potential risks, as well as potential alternative transactions, which included a presentation regarding potential recapitalization transactions that would involve a portion of AT&T’s interest in the Company. Also on June 18, 2019, the Company entered into a confidentiality agreement with Party G.
On June 20, 2019, representatives of the Company and representatives from AT&T met with representatives of Party D to discuss a potential strategic relationship between AT&T and Party D in connection with Party D’s proposal. Also on June 20, 2019, representatives of the Company also met separately with representatives of AT&T to provide an update to AT&T on the process and to discuss a proposed recapitalization transaction involving AT&T’s interests in the Company.

28




On June 24, June 26 and June 27, 2019, Company management held due diligence meetings with PPF and Party G in Prague. On June 27, 2019, JPM provided, on behalf of PPF and Party G, revised drafts of the Merger Agreement and Voting Agreement to Covington.
On June 28, 2019, Party D informed Allen & Company that it would not send revised drafts of the Merger Agreement and the Voting Agreement until the week of July 8, 2019. On July 4, 2019, Company management held a due diligence meeting in London with representatives from Party D.
On July 8, 2019, Allen & Company, at the request of the Special Committee, informed PPF and Party G and Party D that the deadline for submitting revised, definitive proposals was extended to July 25, 2019. Also on July 8, 2019, JPM provided Allen & Company with preliminary summary information regarding the proposed partnership between PPF and Party G, which was supplemented on July 11, 2019. On July 10, 2019, Covington sent a revised draft of the Merger Agreement to PPF’s outside legal counsel, White & Case, LLP (“W&C”).
On July 12, 2019, the Special Committee convened by telephone with the Company's legal advisors present to discuss the status of the strategic review process.
On July 16, 2019, Covington, W&C, Party G’s outside legal counsel, and JPM discussed the potential regulatory approval process in connection with a business combination transaction involving the Company, PPF and Party G, as well as the risks associated therewith. Also on July 16, 2019, Covington delivered a revised draft of the Voting Agreement to W&C.
On July 18, 2019, Covington, Party G’s outside legal counsel and W&C discussed the revised draft of the Merger Agreement that had been delivered by Covington to W&C, and representatives of the Company, PPF and Party G conducted a due diligence conference call.
On July 25, 2019, both PPF and a bidding entity created for purposes of the proposed partnership between PPF and Party G submitted letters to the Company whereby the bidding entity indicated that it could not support the valuation of $4.05 per Class A Share on a fully-diluted basis previously proposed by PPF and declined to proceed with submitting a definitive proposal for a potential business combination transaction involving the Company. In its letter, PPF indicated that it would not be submitting a revised proposal in response to the process letter. Party D did not submit a revised proposal with respect to a potential transaction involving the Company.
On July 26, 2019, the Special Committee convened by telephone with the Company's financial and legal advisors present to discuss the communications received from PPF and the bidding entity the prior day. Company management informed the Special Committee that, based on discussions with PPF subsequent to its letter of July 25, 2019, PPF indicated that it was willing to consider pursuing a transaction involving the Company either on its own or in a consortium that it would lead. At the instruction of the Special Committee, Company management informed PPF representatives that the Company required a specific proposal with respect to PPF’s valuation in connection with a potential business combination transaction before engaging in further discussions.
On July 29, 2019, PPF submitted a letter to the Company indicating that it would be interested in pursuing a potential business combination transaction involving the Company either on its own or in a consortium that it would lead. In the letter, PPF indicated that the maximum price per Class A Share on a fully-diluted basis that it could propose was $3.75, but that its offer price would be $3.50 per Class A Share on a fully-diluted basis unless it was able to reach an agreement to dispose of certain of the Company’s assets.

29




On July 30, 2019, the Special Committee convened by telephone with the Company's financial and legal advisors present to discuss PPF’s revised proposal and concluded that it was not acceptable. The Special Committee instructed Company management to communicate to PPF that it did not accept the proposal. The Special Committee also discussed, in light of the responses received from bidders, whether AT&T would be prepared to accept a transaction in which the price per share paid for the Class A Shares would be increased, resulting in a value for the Preferred Shares (of the total equity value) that is less, on an as-converted basis, than the price per share offered for the Class A Shares. On July 31, 2019, Company management contacted a representative from AT&T to make a proposal regarding the price per share for the Class A Shares payable in a business combination transaction.
On August 1, 2019, AT&T representatives informed Company management that they would not accept the Special Committee’s proposal based on PPF’s revised submission.
On August 2, 2019, the Special Committee convened by telephone with the Company's financial and legal advisors present to discuss the process and potential refinancing or recapitalization transactions. Company management informed the Special Committee that they had communicated to PPF the Special Committee’s rejection of PPF’s latest proposal.
On August 21, 2019, a representative from PPF informed Company management that PPF was prepared to acquire the Company at a price per Class A Share of $4.05, on a fully-diluted basis, and that PPF was engaged in discussions with Party G regarding a potential partnership in connection with PPF’s proposal. The Special Committee held a telephonic meeting to discuss the latest communications between the Company and PPF representatives as well as other potential refinancing or recapitalization transactions.
On August 27 and August 29, 2019, Company management and PPF held meetings to discuss certain key terms contained in the draft Merger Agreement, including each party’s position on efforts to obtain required regulatory approvals, termination fees and the scope of the Board of Directors’ right to terminate the Merger Agreement to enter into a transaction with respect to a superior acquisition proposal.
On September 5, 2019, the Special Committee convened by telephone with the Company's financial and legal advisors present. Company management provided the Special Committee with an overview of the high-level transaction terms of the Merger Agreement that had been discussed with PPF, and informed the Special Committee that PPF had reported that its discussions with Party G to form a potential partnership in connection with a potential business combination transaction involving the Company were ongoing. The Special Committee also discussed with the Company’s management potential alternative transactions.
Between September 9, 2019 and September 15, 2019, PPF and the Company exchanged emails regarding key terms in the draft Merger Agreement. During this time, PPF reported that discussions between PPF and Party G to form a partnership for a potential business combination transaction involving the Company were ongoing.
On September 16, 2019, the Special Committee convened by telephone with the Company's legal and financial advisors present to discuss the latest discussions between the Company and PPF and potential refinancing or recapitalization transactions. Following these discussions, the Special Committee determined to continue discussions with PPF while also evaluating potential refinancing or recapitalization transactions as a possible alternative to a business combination transaction.
On September 17, 2019, the Board of Directors held a meeting at which Company management provided an update to the Board of Directors on the status of the strategic review process and potential refinancing or recapitalization transactions being evaluated as a possible alternative to a business combination transaction.

30




On September 21, 2019 through September 24, 2019, Company management and representatives of PPF met to discuss issues relating to a potential business combination transaction, including certain key transaction terms in the Merger Agreement that remained unresolved, information from PPF on its sources of financing and planned uses for the potential business combination transaction, and the status of discussions between PPF and Party G on a potential partnership. Company management and representatives of PPF met again on October 1, 2019 to discuss further the high-level transaction terms.
On October 4, 2019, PPF delivered to the Company a revised draft of the Merger Agreement and affirmed its interest in pursuing an all-cash acquisition of the Company at a valuation of $4.05 per Class A Share on a fully-diluted basis. That same day, Company management met with PPF representatives to discuss certain key transaction terms, and the Special Committee met telephonically with the Company's legal and financial advisors present to discuss the status of discussions with PPF, including PPF’s ongoing discussions with Party G, and to receive an update on the potential alternative transactions. On October 6, 2019 and October 7, 2019, representatives of PPF and the Company exchanged communications regarding certain key transaction terms.
On October 8, 2019, members of Company management and Covington met with W&C to discuss certain terms of the Merger Agreement with representatives from PPF joining by telephone. On October 9, 2019, W&C delivered a revised draft of the Merger Agreement to Covington.
On October 10, 2019, Company management met with PPF representatives to discuss several key transaction terms from the revised draft of the Merger Agreement and the status of discussions of the potential business partnership with Party G.
On October 11, 2019, a PPF representative informed Company management that PPF would proceed with a business combination transaction without a partnership with Party G. On that same day, representatives of the Company and AT&T discussed the status of the potential business combination transaction and the PPF proposed offer price. At this meeting, the Company proposed that the holders of Class A Shares be entitled to receive $4.68 per share, which would result in a reduction in the value of the Preferred Shares, on an as-converted basis. Also on that day, Covington delivered a further revised draft of the Merger Agreement to W&C and, on October 12, 2019, W&C delivered a revised draft of the Voting Agreement to Covington and AT&T’s outside legal counsel, Sullivan & Cromwell LLP (“Sullivan & Cromwell”).
On October 12, 2019, representatives of AT&T indicated AT&T’s willingness to proceed with a transaction in which the holders of the Class A Shares would receive $4.50 per share.
On October 13, 2019, representatives and counsel of the Company and AT&T met to continue discussions regarding the consideration to be received by the holders of the Class A Shares. On the same day, Covington and W&C held conference calls to discuss the Merger Agreement, and Covington, W&C and Sullivan & Cromwell, held a conference call to discuss the terms of the Voting Agreement.
On October 14, 2019, W&C delivered a revised draft of the Merger Agreement to Covington.
On October 15, 2019, the Special Committee met with representatives from Allen & Company and Covington to discuss the status of negotiation of the Merger Agreement, Voting Agreement and other ancillary documents. Company management provided an update on discussions with PPF, including the communication from PPF that it would be willing to consummate the transaction without a partnership with Party G. Company management also reported that, based on discussions with representatives of AT&T, AT&T would be prepared to accept a transaction where the holders of Class A Shares would receive a price per share of $4.50, with a reduction in the amount received by AT&T for its Preferred Shares compared to what the Preferred Shares would receive on an as-converted basis. The Special Committee requested that Company management seek a higher price per share for the holders of the Class A Shares.

31




On October 15, 2019, Company management proposed to representatives of AT&T that the holders of the Class A Shares receive consideration of $4.58 per share in connection with the total equity value resulting from PPF’s offer price for the proposed acquisition of the Company, with a corresponding reduction in the amount received by AT&T for its Preferred Shares compared to what the Preferred Shares would receive on an as-converted basis. On October 16, 2019, AT&T confirmed that it would accept this proposal, which proposal was subsequently communicated to and accepted by PPF.
Between October 16, 2019 and October 27, 2019, Covington and W&C continued to exchange drafts of the Merger Agreement and other ancillary documentation, and Covington, W&C and Sullivan & Cromwell continued to discuss the remaining outstanding points in the Merger Agreement, Voting Agreement and other ancillary documents. On October 25, 2019, the Company circulated final versions of the Merger Agreement and Voting Agreement to the Board of Directors, along with summaries of the material terms contained in each document. On October 26, 2019, final versions of the Equity Commitment Letter and Limited Guarantee were circulated to the Board of Directors .
On October 27, 2019, the Special Committee met in Covington’s offices to discuss the potential transaction. Also present were representatives from Covington and Allen & Company (for a portion of the meeting in the case of Allen & Company). Representatives from Covington provided an overview of the key terms agreed to in the transaction documents, including the key provisions of the Merger Agreement, Voting Agreement, Debt Financing Documents, Equity Commitment Letter and Limited Guarantee, and reviewed the directors’ fiduciary duties under applicable law. Allen & Company then reviewed with the Special Committee Allen & Company’s financial analysis of the Common Share Consideration and confirmed its preparedness to render an oral opinion to the Board of Directors, confirmed by a delivery of a written opinion dated October 27, 2019 to the Special Committee and the Board of Directors, to the effect that, as of that date and based on and subject to the assumptions and qualifications set forth therein, the Common Share Consideration to be received by holders of Class A Shares (other than the Company, Parent, Merger Sub, AT&T, each of their respective affiliates and the applicable Dissenting Shareholders) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. Following the discussion and consideration of the Merger and the related transactions, the Special Committee, subject to the delivery of Allen & Company’s formal written opinion to the Special Committee and the Board of Directors, unanimously: (1) determined that the Common Share Consideration for each Class A Share constitutes fair value in accordance with the Companies Act; (2) determined that the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger, on the terms and subject to the conditions set forth therein, are advisable to, and in the best interests of, the Company and its shareholders; and (3) further resolved to recommend the Merger Agreement, the Statutory Merger Agreement, the Merger and the other transactions to the Board of Directors for approval.
Following the meeting of the Special Committee, Mr. Peter Knag and Mr. Trey Turner, the Company’s directors who were not on the Special Committee, joined the rest of the Board of Directors for a meeting of the Board of Directors. Representatives from each of Allen & Company, Covington and Conyers Dill & Pearman Limited, Bermuda counsel to the Company (“Conyers”), also joined the meeting. Representatives of Covington and Conyers discussed the directors’ fiduciary duties under applicable law, and then a representative from Covington summarized the material terms in the Merger Agreement, Debt Financing Documents, Voting Agreement, Equity Commitment Letter and Limited Guarantee. Allen & Company then reviewed with the Board of Directors its financial analysis of the Common Share Consideration and rendered an oral opinion, confirmed by delivery of a written opinion dated October 27, 2019 to the Special Committee and the Board of Directors to the effect that, as of that date and based on and subject to the assumptions and qualifications set forth therein, the Common Share Consideration to be received by holders of Class A Shares (other than the Company, Parent, Merger Sub, AT&T, each of their respective affiliates and the applicable Dissenting Shareholders) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. After discussing potential factors relating to the Merger and other transactions contemplated by the

32




Merger Agreement, including, among other things, the factors described in the section of this proxy statement entitled “The Merger-Recommendation of the Special Committee and the Board of Directors and Reasons for the Merger,” the Board of Directors, taking into consideration, among other things, the recommendation of the Special Committee, unanimously: (1) determined that the Common Share Consideration for each Class A Share constitutes fair value in accordance with the Companies Act; (2) determined that the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger, on the terms and subject to the conditions set forth therein, are advisable to, and in the best interests of, the Company and its shareholders; (3) approved the execution, delivery and performance of the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger; (4) resolved that the Merger Agreement and the Statutory Merger Agreement be submitted to the shareholders of the Company at the Special General Meeting for their adoption and approval; and (5) subject to the non-solicitation terms of the Merger Agreement, resolved to recommend that the shareholders of the Company vote in favor of the adoption of the Merger, the Merger Agreement and the Statutory Merger Agreement.
On the same day, the parties exchanged executed copies of the Merger Agreement and other related ancillary agreements, including the Voting Agreement, the Equity Commitment Letter and the Limited Guarantee. In the evening of October 27, 2019, the Company issued a press release announcing the transaction and the execution of the Merger Agreement.
Recommendation of the Special Committee and the Board of Directors and Reasons for the Merger
Recommendation of the Special Committee and the Board of Directors
The Board of Directors, after carefully considering, in consultation with CME’s management and financial and legal advisors, various factors more fully described in this proxy statement and upon the recommendation of the Special Committee, has unanimously: (1) determined that the Common Share Consideration for each Class A Share constitutes fair value in accordance with the Companies Act; (2) determined that the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger, on the terms and subject to the conditions set forth therein, are advisable to, and in the best interests of, CME and its shareholders; (3) approved the execution, delivery and performance of the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger; (4) resolved that the Merger Agreement and the Statutory Merger Agreement be submitted to the shareholders of CME at the Special General Meeting for their adoption and approval; and (5) subject to the non-solicitation terms of the Merger Agreement, resolved to recommend that the shareholders of CME vote in favor of the adoption of the Merger, the Merger Agreement and the Statutory Merger Agreement.

33




The Board of Directors, taking into consideration, among other things, the recommendation of the Special Committee, unanimously recommends that you vote: (1) “FOR” the Merger Proposal; (2) “FOR” the Compensation Advisory Proposal; and (3) “FOR” the Adjournment Proposal.
Reasons for the Merger
In the course of reaching its decision to recommend that the Board of Directors approve the Merger Agreement, the Statutory Merger Agreement and the Merger and to recommend that CME’s shareholders adopt the Merger Proposal, the Special Committee consulted with senior management and its financial and legal advisors, and reviewed a significant amount of information and considered a number of factors, including the following (not necessarily in order of relative importance):
the Common Share Consideration represents an approximately 32% premium over CME’s closing Class A Share price prior to the announcement on March 25, 2019 that CME was commencing a process to explore and evaluate potential strategic alternatives;
the value of the cash consideration to be received by CME’s shareholders pursuant to the Merger Agreement provides certainty of value to its shareholders;
CME’s announcement on March 25, 2019 that it had commenced a public process to explore and evaluate potential strategic alternatives, together with reports in the media speculating on the developments with respect to the process in the months leading up to the date on which the Merger Agreement was signed, provided any interested potential counterparties who were not contacted by CME’s financial advisors an opportunity to inquire about the sale process;
the Special Committee’s belief that the strategic review process conducted by CME and its financial advisors was a comprehensive process designed to seek out all possible interest in a business combination or other strategic transaction;
in connection with the strategic review process, (a) Allen & Company, at the direction of the Special Committee, engaged in discussions with approximately 80 potential counterparties, including strategic investors and financial sponsors, to gauge their interest in making a proposal to acquire CME, (b) 18 of those parties signed confidentiality agreements and 16 of them received a confidential management presentation with respect to CME, (c) five of those parties (including PPF) made non-binding proposals to acquire all or a portion of CME and (d) each party interested in pursuing or participating in a business combination transaction for all of CME other than PPF ultimately elected to withdraw from the process and not to pursue a transaction with CME;
the Special Committee’s belief, after consultation with CME management and CME’s financial advisors, that the potential counterparties contacted by Allen & Company were the parties most likely to be interested in a potential acquisition of CME;
the history of the negotiations of the Merger Consideration, as described in “The Merger—Background of the Merger” was competitive, leading the Special Committee to conclude that it was unlikely that any other party would be willing to offer a higher price for the Class A Shares;

34




the possibility that, if CME did not enter into the Merger Agreement, the trading price of its Class A Shares would fall below the Common Share Consideration once CME announced it had ended its pursuit of a possible business combination transaction or had failed to announce a strategic transaction after the completion of the strategic review;  
historical and current information concerning CME’s business, financial performance and condition, operations, technology, management and competitive position, and current industry, market and general economic conditions;
the internal estimates of CME’s future financial performance, as well as the potential impact on such future financial performance if the challenges and risks to its business that CME had identified were in fact realized;
in the event CME were to remain a publicly traded company, the volatility and limited trading volumes of CME’s Class A Shares, as well as the possibility that the price per share received by shareholders selling in the open market or in a future transaction might be less than the Common Share Consideration to be paid pursuant to the Merger Agreement in the event of a decline in the market price of CME’s Class A Shares or the stock market in general;
the potential risks to the future of the business in the event CME was not able to enter into a business combination transaction;
the belief of the Special Committee, after consultation with CME’s senior management and outside legal counsel, that the terms and conditions of the Merger Agreement, including, but not limited to, the following, are reasonable and customary:
the ability of the Board of Directors and the Special Committee, under certain circumstances, to furnish information to and conduct negotiations with a third party and, upon the payment to Parent of the Company Termination Fee, to terminate the Merger Agreement to accept a Superior Proposal;
the ability of the Board of Directors, under certain circumstances, to withdraw, modify, qualify, or amend its recommendation of the Merger Proposal in response to an Intervening Event, if the Board of Directors determines in good faith, after consultation with its financial advisors and outside legal counsel and upon the recommendation of the Special Committee, that failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable law;
the amount of the Company Termination Fee payable to Parent, which the Special Committee believes is reasonable in the context of termination fees that were payable in other transactions and would not be likely to preclude a third party from making a Competing Proposal;
the representations and warranties contained in the Merger Agreement, which the Special Committee believes are reasonable and customary;

35




the conditions to closing contained in the Merger Agreement, which the Special Committee believes are reasonable and customary in number and scope, and which, in the case of the condition related to the accuracy of CME’s representations and warranties, are generally subject to a “Company Material Adverse Effect” qualification (see “The Merger Agreement—Representations and Warranties”);
the absence of a financing condition of Parent; and
CME’s entitlement, under certain conditions, to seek specific performance of Parent’s obligations under the Merger Agreement, including, under certain conditions, Parent’s and Merger Sub’s obligation to close the Merger when required and fund the Equity Financing and Debt Financing;
support from CME’s majority shareholder, as evidenced by the terms and conditions, including the Merger Consideration, of the Merger Agreement and the Voting Agreement;
the financial presentation of Allen & Company and its written opinion, dated as of October 27, 2019, to the Special Committee and the Board of Directors as to the fairness, from a financial point of view and as of such date, of the Common Share Consideration to be received by holders of Class A Shares (other than the Company, Parent, Merger Sub, AT&T, each of their respective affiliates and the Dissenting Shareholders) pursuant to the Merger Agreement, which opinion was based on and subject to various assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken, as more fully described in “The Merger—Fairness Opinion of Allen & Company”;
PPF’s strong strategic interest in CME, its familiarity with CME and its business and markets and its substantial financial resources;
the commitment of PPF, pursuant to the Equity Commitment Letter, to provide to Parent an equity contribution of an aggregate amount up to $1.099 billion, which amount, together with the commitments of the Lenders under the Debt Financing Documents, is sufficient to pay the aggregate Merger Consideration payable under the Merger Agreement and, as required, to pay the Parent Termination Fee payable to CME;
the commitment of the Lenders under the Debt Financing Documents to provide to Parent a €1.1 billion term loan, for its use in financing the transactions contemplated by the Merger Agreement and refinancing existing debt within CME following the closing of the Merger, together with a €50 million revolving facility for the general corporate and working capital purposes of the PPF group following the closing of the Merger;
that PPF entered into the Limited Guarantee concurrently with the execution of the Merger Agreement guaranteeing the obligations of Parent to pay the Parent Termination Fee and certain fees and expenses of Parent payable under the Merger Agreement; and
the availability of appraisal rights to holders of Class A Shares under the Companies Act.
In the course of its deliberations, the Special Committee also considered a variety of risks and other countervailing factors, including:

36




the risks and costs to CME if the Merger does not close, including costs incurred related to the negotiation of the Merger and seeking the Requisite Shareholder Approval, the diversion of management and employee attention, potential employee attrition and the potential effect on relationships with its commercial counterparties;
the restrictions that the Merger Agreement imposes on CME’s ability to solicit or participate in discussions or negotiations regarding Competing Proposals, subject to certain exceptions, and on CME’s ability to enter into Competing Proposals, and the fact that CME would be obligated to pay the Company Termination Fee to Parent under certain circumstances;
that, following the Merger, CME will no longer exist as a publicly traded company and its shareholders will no longer participate in its potential future earnings or growth, if any, and will not benefit from future appreciation in the value of CME, if any;
that gains from an all-cash transaction would be taxable to CME’s shareholders for U.S. federal income tax purposes;
the restrictions on the conduct of CME’s business prior to the completion of the Merger, requiring CME to conduct its business in the ordinary course, subject to specific limitations and exceptions, which may delay or prevent CME from undertaking business opportunities that may arise pending completion of the Merger;
the risk that governmental entities may oppose or refuse to approve the Merger or impose conditions on Parent, CME or any of their respective affiliates prior to approving the Merger, which conditions may constitute a Burdensome Condition under the terms of the Merger Agreement that would permit Parent to refuse to consummate the Merger;
the specific terms of the Merger Agreement that, either individually or in combination, could discourage potential acquirers from making a Competing Proposal, including the non-solicitation restrictions contained in the Merger Agreement and the requirement that CME pay the Company Termination Fee if the Merger Agreement is terminated under certain circumstances;
the limitations on remedies available to CME under the Merger Agreement under certain circumstances, including the possibility that the certain obligations under the Merger Agreement might be difficult to enforce;
the risk that Parent’s Equity Financing or Debt Financing is unable to be obtained, and Parent is therefore unable to consummate the Merger;
the interests of CME’s officers and directors in the Merger that may be different from or in addition to the interests of its shareholders generally, which are described in “The Merger—Interests of CME’s Directors and Officers in the Merger”; and
various other risks associated with the transaction and the business of CME described in the section entitled “Risk Factors” in CME's annual report on Form 10-K for the fiscal year ended December 31, 2018, quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2019 and any subsequent periodic and current reports filed with the SEC.

37




In the course of reaching its decision to approve the Merger Agreement, the Statutory Merger Agreement and the Merger and to recommend that CME’s shareholders approve the Merger Proposal, the Board of Directors consulted with CME management and its financial and legal advisors, and reviewed a significant amount of information and considered a number of factors, including the following:
the independence and disinterestedness of the Special Committee;
the strategic review process and the extent of the outreach to potential counterparties carried out by CME and its financial advisors in connection with the strategic review process;
the factors considered by the Special Committee, including the benefits, risks and countervailing factors referenced above; and
the unanimous recommendation of the Special Committee.
The foregoing discussion of the factors considered by the Special Committee and the Board of Directors is not intended to be exhaustive but does set forth the material factors considered by the Special Committee and the Board of Directors. In view of the wide variety of factors considered in connection with the evaluation of the Merger and the complexity of these matters, CME’s directors did not consider it practical, and did not attempt to quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision and did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determinations made by the Special Committee and the Board of Directors. Rather, the Special Committee and the Board of Directors made their respective recommendations based on the totality of information presented to CME’s directors and the investigation conducted by them. In considering the factors discussed above, individual directors may have given different weights to different factors.
After considering these factors and consulting with its legal counsel and its financial advisors, and upon the recommendation of the Special Committee, the Board of Directors has unanimously: (1) determined that the Common Share Consideration for each Class A Share constitutes fair value in accordance with the Companies Act; (2) determined that the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger, on the terms and subject to the conditions set forth therein, are advisable to, and in the best interests of, CME and its shareholders; (3) approved the execution, delivery and performance of the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the merger; (4) subject to the non-solicitation terms of the Merger Agreement, resolved to recommend that the shareholders of CME vote in favor of the adoption of the Merger, the Merger Agreement and the Statutory Merger Agreement; and (5) resolved that the Merger Agreement and the Statutory Merger Agreement be submitted to the shareholders of CME at the Special General Meeting for their adoption and approval.
The foregoing discussion of the factors considered by the Special Committee and the Board of Directors is forward-looking in nature. This information should be read in light of the factors described under the section of this proxy statement titled “Forward Looking Statements.
The Board of Directors unanimously recommends that you vote “FOR” the Merger Proposal.

38




Fairness Opinion of Allen & Company
The Company has engaged Allen & Company as its financial advisor in connection with the Merger. In connection with this engagement, the Company requested that Allen & Company render an opinion to the Special Committee and the Board of Directors as to the fairness, from a financial point of view, of the Common Share Consideration to be received by holders of Class A Shares (other than the Company, Parent, Merger Sub, AT&T, each of their respective affiliates and the Dissenting Shareholders) pursuant to the Merger Agreement. On October 27, 2019, at a meeting of the Board of Directors held to evaluate the Merger, Allen & Company rendered an oral opinion, which was confirmed by delivery of a written opinion dated October 27, 2019, to the Special Committee and the Board of Directors to the effect that, as of that date and based on and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken described in such opinion, the Common Share Consideration was fair from a financial point of view.
The full text of Allen & Company’s written opinion, dated October 27, 2019, which describes the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken, is attached as Annex B to this proxy statement and is incorporated by reference herein in its entirety. The description of Allen & Company’s opinion set forth in this proxy statement is qualified in its entirety by reference to the full text of Allen & Company’s written opinion. Allen & Company’s opinion was intended for the benefit and use of the Special Committee (in its capacity as such) and the Board of Directors (in its capacity as such) in connection with their evaluation of the Common Share Consideration from a financial point of view and did not address any other terms, aspects or implications of the Merger. Allen & Company’s opinion did not constitute a recommendation as to the course of action that the Company (or the Special Committee or the Board of Directors) should pursue in connection with the Merger or otherwise address the merits of the underlying decision by the Company to engage in the Merger, including in comparison to other strategies or transactions that might be available to the Company or which the Company might engage in or consider. Allen & Company’s opinion does not constitute advice or a recommendation to any shareholder as to how such shareholder should vote or act on any matter relating to the Merger or otherwise.
Allen & Company’s opinion reflected and gave effect to Allen & Company’s general familiarity with the Company as well as information that Allen & Company received during the course of its assignment, including information provided by the management of the Company in the course of discussions relating to the Merger as more fully described below. In arriving at its opinion, Allen & Company neither conducted a physical inspection of the properties or facilities of the Company or any other entity nor made or obtained any evaluations or appraisals of the assets or liabilities (contingent, accrued, derivative, off-balance sheet or otherwise) of the Company or any other entity, or conducted any analysis concerning the solvency or fair value of the Company or any other entity.
In arriving at its opinion, Allen & Company, among other things:
reviewed the financial terms and conditions of the Merger as reflected in an execution version, provided to Allen & Company on October 26, 2019, of the Merger Agreement;
reviewed the executed Debt Financing Documents, and execution versions of the Equity Commitment Letter and the Limited Guarantee, in each case, in the form provided to Allen & Company on October 26, 2019;
reviewed certain publicly available historical business and financial information relating to the Company, including public filings of the Company and historical market prices and trading volumes for Class A Shares;

39




reviewed certain financial information relating to the Company provided to or discussed with Allen & Company by the management of the Company, including certain internal financial forecasts, estimates and other financial and operating data relating to the Company prepared by the management of the Company for fiscal years 2019 through 2023 and as extrapolated by management of the Company for fiscal years 2024 through 2028 (such forecasts, as extrapolated, the “Company Forecasts”);
held discussions with the management of the Company relating to the past and current operations, financial condition and prospects of the Company;
reviewed and analyzed certain publicly available information, including certain stock market data and financial information, relating to selected companies with businesses that Allen & Company deemed generally relevant in evaluating the Company;
reviewed and analyzed certain publicly available financial information relating to selected transactions that Allen & Company deemed generally relevant in evaluating the Merger; and
conducted such other financial analyses and investigations as Allen & Company deemed necessary or appropriate for purposes of its opinion.
In rendering its opinion, Allen & Company relied upon and assumed, with the Company’s consent and without independent verification, the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information available to Allen & Company from public sources, provided to or discussed with Allen & Company by the management and/or other representatives of the Company or otherwise reviewed by Allen & Company. With respect to the Company Forecasts that Allen & Company was directed to utilize for purposes of its analyses, Allen & Company was advised by the management of the Company, and Allen & Company assumed, at the direction of the Company, that the Company Forecasts were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such management as to, and were a reasonable basis upon which to evaluate, the future financial and operating performance of the Company and the other matters covered thereby. Allen & Company expressed no opinion or view as to any financial forecasts, estimates or other financial or operating data or the assumptions on which they were based.
Allen & Company relied, at the direction of the Company, upon the assessments of the management of the Company as to, among other things, (i) the potential impact on the Company of certain market, cyclical, seasonal, competitive and other trends and developments in and prospects for, and governmental, regulatory and legislative policies and matters relating to or otherwise affecting, the media, internet and technology industries, (ii) the technology and intellectual property of the Company (including the validity and associated risks thereof), and (iii) existing and future contracts, agreements and arrangements relating to, and the ability to attract, retain and/or replace, key employees, vendors, customers, advertisers, distributors, strategic partners and other commercial relationships of the Company. Allen & Company assumed, with the consent of the Company, that there would be no developments with respect to any such matters that would be meaningful in any respect to its analyses or opinion.

40




Further, Allen & Company’s opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Allen & Company as of, the date of its opinion. It should be understood that subsequent developments may affect the conclusion expressed in Allen & Company’s opinion and that Allen & Company assumed no responsibility for advising any person of any change in any matter affecting Allen & Company’s opinion or for updating or revising its opinion based on circumstances or events occurring after the date of its opinion. As the Special Committee and the Board of Directors were aware, the credit, financial and stock markets, and the industry in which the Company operates, have experienced and continue to experience volatility, and Allen & Company expressed no opinion or view as to any potential effects of such volatility on the Company or the Merger.
Allen & Company’s opinion was intended for the benefit and use of the Special Committee (in its capacity as such) and the Board of Directors (in its capacity as such) in connection with their evaluation of the Common Share Consideration from a financial point of view. Allen & Company’s opinion did not constitute a recommendation as to the course of action that the Company (or the Special Committee or the Board of Directors) should pursue in connection with the Merger or otherwise address the merits of the underlying decision by the Company to engage in the Merger, including in comparison to other strategies or transactions that might be available to the Company or which the Company might engage in or consider. Allen & Company’s opinion does not constitute advice or a recommendation to any shareholder as to how such shareholder should vote or act on any matter relating to the Merger or otherwise. Allen & Company did not express any opinion as to the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation or other consideration payable to any officers, directors or employees of any party to the Merger or any related entities, or any class of such persons or any other party, relative to the Common Share Consideration or otherwise. Allen & Company did not address, and expressed no view as to, the consideration payable to holders of the Company’s Class B Common Stock, par value $0.08 per share, the Series A Preferred Share or Series B Preferred Shares, and Allen & Company expressed no view as to the relative amounts to be paid to any class of capital stock of the Company. Allen & Company expressed no opinion as to the price at which Class A Shares (or any other securities) may trade or otherwise be transferable at any time.
In addition, Allen & Company did not express any opinion or view as to any tax or other consequences that might result from the Merger or otherwise, nor did Allen & Company express any opinion or view as to, and Allen & Company relied upon, at the direction of the Company, the assessments of representatives of the Company regarding, legal, regulatory, accounting, tax and similar matters relating to the Company and the Merger, including, without limitation, changes in, or the impact of, tax or other laws, regulations and governmental and legislative policies affecting the Company or the Merger, as to which Allen & Company understood the Company obtained such advice as it deemed necessary from qualified professionals. Allen & Company assumed, with the consent of the Company, that the Merger would be consummated in accordance with its terms and in compliance with all applicable laws, documents and other requirements, without waiver, modification or amendment of any material term, condition or agreement, and that, in the course of obtaining the necessary governmental, regulatory or third party approvals, consents, releases, waivers, decrees and agreements for the Merger, no delay, limitation, restriction or condition, including any divestiture or other requirements or remedies, amendments or modifications, would be imposed or occur that would be meaningful in any respect to its analyses or opinion. Allen & Company also assumed, with the consent of the Company, that the final executed Merger Agreement would not differ from the execution version reviewed by Allen & Company in any respect meaningful to Allen & Company’s analyses or opinion. In addition, Allen & Company has assumed that Parent would obtain financing in accordance with the terms set forth in the Financing Documents.

41




Allen & Company’s opinion was limited to the fairness, from a financial point of view and as of its date, of the Common Share Consideration to be received by holders of Class A Shares (other than the Company, Parent, Merger Sub, AT&T, each of their respective affiliates and the Dissenting Shareholders) pursuant to the Merger Agreement without regard to individual circumstances of such holders of Class A Shares that may distinguish such holders or the securities of the Company held by such holders, and Allen & Company expressed no opinion or view with respect to any consideration received in connection with the Merger by the holders of any other securities, creditors or other constituencies of any party. Allen & Company’s opinion did not address any other terms, aspects or implications of the Merger, including, without limitation, the form or structure of the Merger or any terms, aspects or implications of any fee-funding arrangement or other arrangements, agreements or understandings entered into in connection with, related to or contemplated by the Merger or otherwise.
In connection with its opinion, Allen & Company performed a variety of financial and comparative analyses, including those described below. The summary of the analyses below and certain factors considered is not a comprehensive description of all analyses undertaken or factors considered by Allen & Company. The preparation of a financial opinion or analysis is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion and analyses are not readily susceptible to summary description. Allen & Company arrived at its opinion based on the results of all analyses undertaken and assessed as a whole, and did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis. Accordingly, Allen & Company believes that the analyses and factors summarized below must be considered as a whole and in context. Allen & Company further believes that selecting portions of the analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses and factors, could create a misleading or incomplete view of the processes underlying Allen & Company’s analyses and opinion.
In performing its financial analyses, Allen & Company considered industry performance, general business and economic, market and financial conditions and other matters existing as of the date of its opinion, many of which are beyond the control of the Company. No company, business or transaction reviewed is identical or directly comparable to the Company, its business or the Merger, nor would individual multiples observed of each of the selected companies or selected transactions be independently determinative of the results of Allen & Company’s selected public companies or selected precedent transactions analysis. An evaluation of these analyses is not entirely mathematical; rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading, acquisition or other values of the companies, businesses or transactions reviewed. The estimates of the future performance of the Company in or underlying Allen & Company’s analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by such analyses. These analyses were prepared solely as part of Allen & Company’s analysis of the fairness, from a financial point of view, of the Common Share Consideration to be received by holders of Class A Shares (other than the Company, Parent, Merger Sub, AT&T, each of their respective affiliates and the Dissenting Shareholders) and were provided to the Special Committee and the Board of Directors in connection with the delivery of Allen & Company’s opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the assumptions and estimates used in, and the reference ranges resulting from, any particular analysis described below are inherently subject to substantial uncertainty and should not be taken as the views of Allen & Company regarding the actual value of the Company.

42




Allen & Company did not recommend the specific consideration payable in the Merger. The type and amount of consideration payable in the Merger was determined through negotiations between the Company and PPF, rather than by, or based on the recommendation of, any financial advisor, and was approved by the Special Committee and the Board of Directors. The decision to enter into the Merger Agreement was solely that of the Special Committee and the Board of Directors. Allen & Company’s opinion and analyses were only one of many factors considered by the Special Committee and the Board of Directors in its evaluation of the proposed Merger and the Common Share Consideration and should not be viewed as determinative of the views of the Special Committee, the Board of Directors or management with respect to the Merger or the Common Share Consideration.
Financial Analysis
The summary of the financial analyses described in this section entitled “Financial Analysis” is a summary of the material financial analyses provided by Allen & Company in connection with its written opinion, dated October 27, 2019, to the Special Committee and the Board of Directors. The summary set forth below is not a comprehensive description of all analyses undertaken by Allen & Company in connection with its opinion, nor does the order of the analyses in the summary below indicate that any analysis was given greater weight than any other analysis. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by Allen & Company, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by Allen & Company. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by Allen & Company. Future results may differ from those described and such differences may be material. For purposes of calculating the implied equity value per share reference range, Allen & Company assumed a fully diluted share count, including the conversion of the Preferred Shares in accordance with their original terms, not as provided for in the Merger Agreement. For purposes of the financial analyses described below, the term “OIBDA” means operating income before depreciation, amortization of intangible assets and impairment of assets (other than amortization and impairment of program rights) and certain one-time non-recurring items.
Selected Public Companies Analysis. Allen & Company reviewed publicly available financial and stock market information of the Company and the following nine selected European media companies that, based on the exercise of Allen & Company’s professional judgment and experience, Allen & Company considered generally relevant for purposes of analysis, collectively referred to as the “selected companies”:
Selected Companies
Atresmedia Corporación de Medios de Comunicación, S.A.
ITV plc
Mediaset España Comunicación, S.A.
Mediaset S.p.A.
Métropole Télévision S.A.
Nordic Entertainment Group AB
ProSiebenSat.1 Media SE
RTL Group SA
Télévision Française 1 SA

43




Allen & Company reviewed, among other information, enterprise values, calculated as fully diluted equity values based on closing stock prices on October 25, 2019 plus total debt, preferred equity and non-controlling interests (as applicable) and less cash and cash equivalents and unconsolidated assets (as applicable), as a multiple, to the extent meaningful, of calendar year 2020 estimated OIBDA. Financial data of the selected companies were based on public filings, publicly available Wall Street research analysts’ estimates and other publicly available information. Financial data of the Company was based on the Company Forecasts.
The overall low to high calendar year 2020 estimated OIBDA multiples observed for the selected companies were 3.6x to 12.3x. Allen & Company then applied selected ranges of calendar year 2020 estimated OIBDA multiples derived from the selected companies of 7.5x to 9.5x, respectively, to corresponding data of the Company. This analysis indicated the following approximate implied equity value per share reference ranges for the Company, as compared to the Common Share Consideration:
Implied Equity Value Per Share
Reference Range Based on CY2020E OIBDA:
Common Share Consideration
$3.44 – $4.77
$4.58

Selected Precedent Transactions Analysis. Using publicly available information, Allen & Company reviewed financial information relating to the following 11 selected transactions involving European target media companies that, based on the exercise of Allen & Company’s professional judgment and experience, Allen & Company considered generally relevant for purposes of analysis, collectively referred to as the “selected transactions”:
Date Announced
Acquirer
Target
November 15, 2010
Cyfrowy Polsat S.A.
Telewizja Polsat S.A.
April 20, 2011
Sanoma Oyj
SBS Broadcasting B.V. (Netherlands and Belgium)
December 14, 2012
Discovery, Inc.
SBS Broadcasting B.V. (Nordic)
October 28, 2013
AMC Networks Inc.
Chellomedia
January 21, 2014
Discovery, Inc.
Eurosport International SA
May 1, 2014
Viacom Inc.
Channel 5 Broadcasting Limited
March 15, 2015
Scripps Networks Interactive, Inc.
TVN S.A.
July 27, 2015
Altice N.V.
NextRadioTV SA
July 14, 2017
Altice N.V.
Media Capital SGPS, SA
February 1, 2018
TDC Group
Modern Times Group (Nordic Entertainment and Studios)*
July 20, 2018
Telia Company AB
Bonnier Broadcasting AB
 
 
 
* Transaction subsequently withdrawn on February 12, 2018.


44




Allen & Company reviewed, among other information, transaction values of the selected transactions, calculated as the enterprise values implied for the target companies or businesses involved in the selected transactions based on the consideration or assumed consideration paid or payable in the selected transactions as a multiple, to the extent publicly available and meaningful, of the latest 12 months OIBDA of the target company or business as of the applicable announcement date of such transaction. Financial data for the selected transactions were based on public filings, publicly available Wall Street research analysts’ estimates and other publicly available information. Financial data of the Company was based on the Company’s public filings, the latest 12 months OIBDA as of September 30, 2019 as provided by the Company, and the Company Forecasts.
The overall low to high latest 12 months OIBDA observed for the selected transactions were 9.1x to 17.4x (with a mean of 11.7x and a median of 11.1x). Allen & Company then applied a selected range of the latest 12 months OIBDA multiples of 9.5x to 12.5x, derived from the selected transactions to corresponding data (as of September 30, 2019) of the Company. This analysis indicated the following approximate implied equity value per share reference ranges for the Company, as compared to the Common Share Consideration:
Implied Equity Value Per Share
Reference Range Based on LTM OIBDA
Common Share Consideration
$4.36 – $6.22
$4.58

Discounted Cash Flow Analysis. Allen & Company performed a discounted cash flow analysis of the Company by calculating, based on the Company Forecasts, the estimated present value (as of September 30, 2019) of the standalone unlevered, after-tax free cash flows that the Company was forecasted to generate during the three months ending December 31, 2019 through the full fiscal year ending December 31, 2028. Terminal values for the Company were calculated by applying to the Company’s estimated OIBDA for the fiscal year ending December 31, 2028 a selected range of terminal value OIBDA multiples of 6.5x to 8.5x. The cash flows and terminal values were then discounted to present value (as of September 30, 2019) using a selected range of discount rates based on the Company’s estimated weighted average cost of capital of 8.25% to 9.25%. This analysis indicated the following approximate implied equity value per share reference range for the Company, as compared to the Common Share Consideration:
Implied Equity Value Per Share
Reference Range
Common Share Consideration
$4.16 – $5.31
$4.58


45




Certain Additional Information
Allen & Company observed certain additional information that was not considered part of its financial analyses for its opinion but was noted for informational reference, including the following:
unaffected 12-month trading range of the Class A Shares during the 52-week period ended March 22, 2019, which was the last full trading day prior to the Company’s announcement on March 25, 2019 that it was commencing a process to explore and evaluate potential strategic alternatives and which indicated closing trading prices for the Class A Shares during such period of approximately $2.67 and $4.40 per share, respectively; and
unaffected undiscounted analyst share prices targets for the Class A Shares on March 22, 2019 as reflected in selected publicly available Wall Street research analysts’ reports, which indicated an overall low to high target stock price range for the Class A Shares of $3.70 to $5.00 per share.
Miscellaneous
The Company selected Allen & Company as its financial advisor in connection with the Merger based on, among other things, Allen & Company’s reputation, experience and familiarity with the Company and the industry in which the Company operates. Allen & Company, as part of its investment banking business, is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, private placements and related financings, bankruptcy reorganizations and similar recapitalizations, negotiated underwritings, secondary distributions of listed and unlisted securities, and valuations for corporate and other purposes. In the ordinary course, Allen & Company as a broker-dealer and certain of Allen & Company’s affiliates and/or related entities and employees have invested or may invest, hold long or short positions and may trade, either on a discretionary or non-discretionary basis, for their own account or for those of Allen & Company’s clients, in the debt and equity securities (or related derivative securities) of the Company, Parent, PPF, AT&T and/or their respective affiliates and/or, in the case of PPF, its portfolio companies. As of October 25, 2019, the date of Allen & Company’s material business relationships disclosure to the Special Committee and the Board of Directors, Allen & Company did not hold an investment in the Company, Parent, PPF, AT&T and/or their respective affiliates and/or, in the case of PPF, certain specified portfolio companies. The issuance of Allen & Company’s opinion was approved by Allen & Company’s fairness opinion committee.
For Allen & Company’s financial advisory services, the Company has agreed to pay Allen & Company an aggregate fee of $27 million, a portion of which was payable upon delivery of Allen & Company’s opinion and $24 million of which is contingent upon consummation of the Merger. The Company also has agreed to reimburse for a portion of Allen & Company’s reasonable expenses and to indemnify Allen & Company and related parties against certain liabilities, including liabilities under the federal securities laws, arising out of its engagement.

46




Although Allen & Company has not provided, during the two-year period prior to the date of its opinion, investment banking services unrelated to the Merger to the Company and/or its affiliates (other than to Time Warner Inc. in connection with AT&T’s acquisition of Time Warner Inc.) for which Allen & Company has received compensation, Allen & Company may provide such services to the Company and/or its affiliates in the future, for which services Allen & Company would expect to receive compensation. In relation to its services to Time Warner Inc. in connection with AT&T’s acquisition of Time Warner Inc., Allen & Company received a cash fee of $55 million. Allen & Company has not provided, during the two-year period to the date of its opinion, and is not currently providing, investment banking services to PPF, for which Allen & Company has received compensation, however, Allen & Company may provide such services to PPF and/or its affiliates in the future, for which services Allen & Company would expect to receive compensation. Allen & Company has not provided, during the two-year period to the date of its opinion, and is not currently providing, investment banking services to AT&T, for which Allen & Company has received compensation, however, Allen & Company may provide such services to AT&T and/or its affiliates in the future, for which services Allen & Company would expect to receive compensation.
CME’s Unaudited Financial Projections
Other than annual financial guidance provided to investors, which generally addresses OIBDA and unlevered free cash flow, CME does not as a matter of course publicly disclose forecasts or projections as to future revenues, OIBDA, earnings or other financial results due to, among other things, the inherent unpredictability of the underlying assumptions and estimates. However, CME management prepared non-public internal financial projections presented below in connection with the evaluation of a potential sale of CME during the strategic review process. CME is including a summary of the unaudited financial projections to provide shareholders with access to certain previously non-public information that was shared with and considered by the Special Committee, the Board of Directors and CME’s financial advisors in connection with the strategic review process.
These unaudited financial projections were not prepared with a view toward public disclosure, nor were they prepared with a view toward complying with U.S. generally accepted accounting principles (“GAAP”), published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts. In addition, these unaudited financial projections were not prepared with the assistance of, or reviewed, compiled or examined by, independent accountants. Any non-GAAP financial measures should not be viewed as a substitute for, or considered in isolation from, GAAP financial measures. In addition, non-GAAP financial measures such as those used in CME’s unaudited financial projections may be different from similarly named non-GAAP financial measures used by other companies. CME management believes that presentation of these non-GAAP financial measures provides useful information to shareholders regarding CME’s financial condition and results of operations. In particular, CME management evaluates CME’s consolidated results and the performance of its segments based on net revenues and OIBDA and believes that OIBDA is useful to shareholders because it provides a meaningful representation of CME’s performance, as it excludes certain items that do not impact either CME’s cash flows or the operating results of CME’s operations. Additionally, CME management believes that unlevered free cash flow is useful to shareholders because it best illustrates the cash generated by CME’s operations when comparing periods. OIBDA and unlevered free cash flow are also used as components in determining management bonuses.

47




The non-GAAP financial measures were relied upon by Allen & Company for purposes of its financial analyses and opinion and by the Board of Directors and the Special Committee in connection with their consideration of the Merger. Financial measures provided to a financial advisor in connection with a business combination transaction are excluded from the definition of non-GAAP financial measures and therefore are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure. Reconciliations of non-GAAP financial measures were not relied upon by Allen & Company for purposes of its financial analyses and opinion or by the Board of Directors or the Special Committee in connection with their consideration of the Merger. Accordingly, we have not provided a reconciliation of the financial measures.
The unaudited financial projections are subjective in many respects and therefore subject to interpretation. Although presented with numeric specificity, the unaudited financial projections reflect a number of estimates and assumptions with respect to industry performance, competition, general business conditions as well as economic, market and financial conditions and matters specific to CME’s businesses, all of which are difficult to predict and many of which are beyond CME’s control. CME cannot provide any assurance that the assumptions underlying the unaudited financial projections will be realized. Many of the assumptions reflected in the unaudited financial projections are subject to change and such projections do not reflect any revised prospects for CME’s business, changes in general business or economic conditions or any other transaction or event that was not known or anticipated at the time such financial information was prepared. Accordingly, there can be no assurance that the results reflected in any of the unaudited financial projections will be realized or that actual results will not differ materially from such unaudited financial projections.
Important factors that may affect actual results and result in such unaudited financial projections not being achieved include, but are not limited to, risks and uncertainties pertaining to CME’s business, industry performance, general business and economic conditions, customer requirements, competition and adverse changes in applicable laws, regulations or rules, including those risks and uncertainties detailed in the sections entitled “Forward-looking Statements” in this proxy statement and the sections entitled “Risk Factors” and “Forward-looking Statements” in CME’s annual report on Form 10-K for the fiscal year ended December 31, 2018, quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2019 and other periodic and current reports filed with the SEC.
CME has not represented to any shareholder or any other person that such unaudited financial projections can be achieved. The unaudited financial projections, which cover multiple years, should not be relied on to predict actual future results or events nor be construed as financial guidance.
The unaudited financial projections do not give effect to the Merger, the expenses that may be incurred in connection with consummating the Merger, the potential synergies that may be achieved by the combined company as a result of the Merger, the effect on CME of any business or strategic decision or action that has been or will be taken as a result of the Merger Agreement having been executed, or the effect of any business or strategic decisions or actions that would likely have been taken if the Merger Agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the Merger. Furthermore, the unaudited financial projections do not take into account the effect on CME of any possible failure of the Merger to occur.
Except as may be required by applicable laws, CME undertakes no obligation to update or otherwise revise the unaudited financial projections to reflect circumstances existing after the date any such unaudited financial projections were prepared or to reflect the occurrence of future events.
In light of the foregoing, CME’s shareholders are cautioned not to place unwarranted reliance on such information, and shareholders are urged to review CME’s most recent SEC filings for a description of its reported financial results. For more information on CME’s reported financial results, see the section of this proxy statement captioned “Where You Can Find More Information.” The numbers included as part of the unaudited financial projections described below were rounded to the nearest dollar for purposes of presentation.

48




April 2019 Projections
In April 2019, CME’s management prepared unaudited financial projections for fiscal years 2019 through 2022 described below based on CME’s 2019 budget and long-term plan, which were adjusted to reflect the inclusion of CME’s Slovenian operations in continuing operations after the termination of an agreement with Slovenia Broadband S.a.r.l. for the prospective sale of the Slovenian operations in January 2019 and the performance of CME’s businesses year-to-date, translated at revised exchange rates. See the section of this proxy statement below captioned “The Merger— CME’s Unaudited Financial Projections—Foreign Exchange Rates Used for Projections” for more details. These unaudited financial projections are referred to as the “April 2019 Projections.” The April 2019 Projections were made available to the Special Committee in connection with CME’s strategic review process and were reviewed by the Special Committee in its meetings on April 4, 2019. The April 2019 Projections were also provided to Allen & Company. The April 2019 Projections were included in the management presentations made or delivered in April and early May 2019 to sixteen bidders, including PPF, in connection with such bidders’ due diligence review of CME.
The April 2019 Projections are summarized in the following table:
 
 
 
Fiscal Year
 
($ in millions)
 
2019

 
2020

 
2021

 
2022

 
 
Revenues
 
$
696

 
$
733

 
$
751

 
$
773

 
Costs
 
456

 
479

 
483

 
493

 
OIBDA (1)
 
241

 
254

 
268

 
280

 
Unlevered Free Cash Flow (2)
 
$
168

 
$
177

 
$
192

 
$
202


Note: For more information regarding the foreign currency exchange rates underlying the unaudited financial projections presented above, see the section below captioned “Foreign Exchange Rate Used for Projections.”

(1) “OIBDA” is a non-GAAP term that is defined as operating income before depreciation, amortization of intangible assets and impairment of assets (other than amortization and impairment of program rights) and certain one-time non-recurring items.

(2) Unlevered Free Cash Flow is a non-GAAP term that is defined as free cash flow before cash payments for interest and Guarantee Fees (as defined below). Free cash flow is defined as net cash generated from continuing operating activities less purchases of property, plant and equipment, net of disposals of property, plant and equipment and excluding the cash impact of certain one-time non-recurring items that are not included in costs charged in arriving at OIBDA.


In connection with Warner Media’s guarantees of CME’s senior credit facilities, CME entered into a reimbursement agreement with Warner Media, which provides for the payment of guarantee fees (the “Guarantee Fees”) to Warner Media as consideration for those guarantees, and the reimbursement to Warner Media of any amounts paid by them under any guarantee or through any loan purchase right under the reimbursement agreement exercised by it. For more information on the Guarantee Fees, see CME’s quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2019 as filed with the SEC on October 17, 2019.

49




October 2019 Projections
CME’s management subsequently prepared in October 2019 a set of unaudited financial projections that covered fiscal years 2019 through 2023, and extrapolated for fiscal years 2024 through 2028. These projections reflected the actual results of CME’s business year-to-date and its outlook, translated at revised exchange rates. See the section of this proxy statement below captioned “The Merger— CME’s Unaudited Financial Projections—Foreign Exchange Rates Used for Projections” for more details. Since the preparation of the April 2019 Projections, the U.S. dollar had strengthened significantly against the currencies primarily used by CME’s businesses, which had an impact both on the expected actual performance of the business on a full-year basis in 2019 and the projected performance of the business during the period covered by the long-term` plan, when translated to U.S. dollars. We refer to these projections as the “October 2019 Projections.” The October 2019 Projections were made available to the Special Committee in connection with CME’s strategic review process and the Special Committee’s evaluation of the transactions contemplated by the Merger Agreement and were reviewed by the Special Committee and by the Board of Directors in their meeting on October 27, 2019. The October 2019 Projections were also made available to Allen & Company for its use and reliance in connection with its financial analyses and opinion described under “The Merger-Fairness Opinion of Allen & Company.” The October 2019 Projections were not made available to PPF or any other bidders.
The October 2019 Projections are summarized in the following tables:
 
 
Fiscal Year
 
 
 
 
Extrapolation
($ in millions)
 
2019 (3)

 
2020

 
2021

 
2022

 
2023

 
2024

 
2025

 
2026

 
2027

 
2028

Revenues
 
$
684

 
$
720

 
$
735

 
$
757

 
$
776

 
$
794

 
$
812

 
$
828

 
$
844

 
$
861

Costs
 
442

 
467

 
471

 
483

 
491

 
501

 
511

 
522

 
532

 
543

OIBDA (1)
 
242

 
253

 
265

 
275

 
285

 
292

 
300

 
306

 
312

 
319

Unlevered Free Cash Flow (2)
 
$
171

 
$
183

 
$
188

 
$
196

 
$
207

 
$
213

 
$
218

 
$
223

 
$
228

 
$
232


Note: For more information regarding the foreign currency exchange rates underlying the unaudited financial projections presented above, see the section below captioned “Foreign Exchange Rate Used for Projections.”

(1) “OIBDA” is a non-GAAP term that is defined as operating income before depreciation, amortization of intangible assets and impairment of assets (other than amortization and impairment of program rights) and certain one-time non-recurring items.
 
(2) Unlevered Free Cash Flow is a non-GAAP term that is defined as free cash flow before cash payments for interest and Guarantee Fees. Free cash flow is defined as net cash generated from continuing operating activities less purchases of property, plant and equipment, net of disposals of property, plant and equipment and excluding the cash impact of certain one-time non-recurring items that are not included in costs charged in arriving at OIBDA.

(3) The projected performance for 2019 assumes that the revised exchange rates used in the October 2019 Projections were in effect for the full year.

50




Foreign Exchange Rates Used for Projections
CME’s reporting currency is U.S. dollar and its functional currency is Euro. CME’s consolidated revenues and costs are divided across a range of European currencies. Any strengthening of the U.S. dollar versus such other European currencies compared to the rates used in the April 2019 Projections and October 2019 Projections will have a negative impact on the projected results under such projections, when translated to U.S. dollars. The foreign exchange rates used for the April 2019 Projections and the October 2019 Projections are summarized in the following table:
Foreign Exchange Rates Used for Projections
 
 
April 2019 Projections (1)
October 2019 Projections (2)
 
 
EUR/USD
1.15
1.10
 
USD/EUR
0.870
0.909
 
USD/CZK
22.50
23.50
 
USD/RON
4.20
4.30
 
USD/BGN
1.70
1.78
Note: EUR represents Euro, USD represents U.S. Dollar, CZK represents Czech Koruna, RON represents Romania Leu and BGN represents Bulgarian Lev.

(1) Prepared based on exchange rates prevailing at that time and near-term third party forecasts of forward rates.

(2) Prepared based on exchange rates prevailing at that time.

Interests of CME’s Directors and Executive Officers in the Merger
When considering the recommendation of the Special Committee and the Board of Directors that you vote to approve the Merger Proposal, the Compensation Advisory Proposal and the Adjournment Proposal, you should be aware that CME’s directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of shareholders generally, as more fully described below. Each of the Special Committee and the Board of Directors was aware of and considered these interests, among other matters, to the extent that they existed at the time, in approving the Merger Proposal and the Compensation Advisory Proposal and in recommending that the Merger Proposal, the Compensation Advisory Proposal and the Adjournment Proposal be approved by shareholders. These interests are described in more detail below and, where applicable, are quantified in the narrative and the tables below.  
Arrangements with Parent
As of the date of this proxy statement, none of CME’s named executive officers has entered into any agreement with Parent or any of its affiliates regarding employment with, or the right to purchase or participate in the equity of, the Surviving Company or one or more of its affiliates. Prior to and following the Effective Time, however, certain of CME’s named executive officers may have discussions, and following the Effective Time, may enter into agreements with Parent or the Surviving Company, its subsidiaries or its affiliates regarding employment with, or the right to purchase or participate in the equity of, the Surviving Company or one or more of its affiliates.

51




However, as discussed in the section entitled “Payments At or Following Change in Control,” in connection with the Merger, each of CME’s named executive officers has entered into a retention award agreement with CME and will be entitled to a retention payment (the “Retention Bonus”) under such agreement. Payment will be made on the consummation of the Merger or, if earlier, the termination of the Merger Agreement; provided, however, that in the event of involuntary termination without cause or a voluntary termination for Good Reason prior to such date, each named executive officer will still be entitled to the Retention Bonus.  
Insurance and Indemnification of Directors and Executive Officers
Parent has agreed to, and has agreed to cause the Surviving Company to, honor and fulfill in all respects the obligations of the Company, to the fullest extent permissible under applicable law, under the Company’s governing documents in effect as of October 27, 2019 and under any indemnification or other similar agreements in effect on such date to the directors, officers and other employees of the Company covered under such governing documents or indemnification agreements (collectively, the “Covered Persons”) arising out of or relating to actions or omissions in their capacity as such occurring prior to the Effective Time, including in connection with the approval of the Merger Agreement and the transactions contemplated thereby. Without limiting the foregoing, for a period of six years after the Effective Time, Parent has also agreed to cause the Surviving Company to undertake certain indemnification and expense advancement obligations with respect to each Covered Person. For a period of six years after the Effective Time, the memorandum of association and bye-laws of the Surviving Company must contain provisions related to indemnification, advancement of expenses and exculpation of Covered Persons no less favorable than the corresponding provisions currently contained in the Company’s governing documents.
Prior to the Effective Time, the Company is required to obtain a six-year “tail” insurance policy with a claims period of at least six years after the Effective Time from an insurance carrier with the same or better credit rating as the Company’s current insurance carrier with respect to directors’ and officers’ liability insurance and fiduciary liability insurance, with benefits and levels of coverage that are at least as favorable, in the aggregate, to the applicable Covered Person, as the Company’s existing policies with respect to matters existing or occurring at or prior to the Effective Time; provided that in no event will the Company be required to expend in the aggregate an annual premium for such policies in excess of 300% of the last annual premium paid by the Company for such insurance prior to October 27, 2019.
Treatment of Company Options and Company RSUs
The Company has from time to time granted time-based awards and performance-based awards under the Central European Media Enterprises Ltd. 2015 Stock Incentive Plan (the “Company Equity Plan”) of Company Options and Company RSUs. As of January 3, 2020, there were 1,822,824 Class A Shares subject to outstanding Company Options (with an exercise price below the Common Share Consideration) and 2,100,638 Class A Shares subject to outstanding Company RSUs, in each case, held by CME’s directors and named executive officers, as a group. The Company’s Amended and Restated Stock Incentive Plan expired on June 1, 2015, and there are no awards outstanding under the Amended and Restated Stock Incentive Plan.
Immediately prior to the Effective Time, each Company Option that is outstanding and unvested will become immediately vested and be exercisable in full and each Company Option that remains outstanding and unexercised as of such time will be automatically canceled, and the holder thereof will be entitled to receive a cash payment (less the amount of any applicable tax withholding) in an amount equal to the product of (i) the total number of Class A Shares underlying such unexercised Company Option immediately prior to the Effective Time and (ii) the excess, if any, of the Common Share Consideration over the exercise price per Class A Share subject to each such Company Option.

52




Immediately prior to the Effective Time, all restrictions on Company RSUs will lapse and each Company RSU outstanding immediately prior to the Effective Time will become immediately vested, and will be canceled in exchange for the right of the holder of such Company RSU to receive the Common Share Consideration (less the amount of any applicable tax withholding) with respect to each Class A Share underlying such Company RSU. With respect to any Company RSU that has performance-based vesting conditions, the number of Class A Shares subject to such Company RSU when such Company RSU vests and performance restrictions thereon lapse in accordance with the foregoing will be determined in accordance with the corresponding award agreement.
Summary of Outstanding Equity Awards
The table below sets forth the number of vested Company Options, unvested Company Options and Company RSUs held by the Company’s named executive officers and directors, and the value that the named executive officers and directors can expect to receive for such equity-based awards at the Effective Time based on the Common Share Consideration, assuming for this purpose that the Merger was completed on January 1, 2020. Certain awards that are now unvested and included in the table below may vest or be forfeited pursuant to their terms, independent of the Merger, until the Effective Time of the Merger. Further, as described in the section entitled “Payments at or Following Change in Control,” with respect to performance-based Company RSUs that relate to the period from 2019 through 2022, the number of Company RSUs that may be earned are determined based on actual performance for any completed fiscal year and target performance for any uncompleted period. Accordingly, depending upon actual performance in any fiscal year that is completed, the number of vested performance-based Company RSUs may vary from what is described below.

53




Name
Unvested Company Options (#)
Unvested Company Options ($)
Vested Company Options (#)
Vested Company Options ($)
Company RSUs
(#)
Company RSUs
($)
Total
($)
Named Executive Officers
 
 
 
 
 
 
 
Michael Del Nin
co-Chief Executive Officer
32,140

68,137

596,420

1,349,410

669,979

3,068,504

4,486,051

Christoph Mainusch
co-Chief Executive Officer
32,140

68,137

596,420

1,349,410

669,979

3,068,504

4,486,051

David Sturgeon
Chief Financial Officer
12,856

27,255

238,568

539,764

242,845

1,112,230

1,679,249

Daniel Penn
General Counsel
16,070

34,068

298,210

674,705

303,449

1,389,796

2,098,570

Directors
 
 
 
 
 
 
 
John K. Billock




58,220

266,648

266,648

Peter Knag







Alfred Langer




50,343

230,571

230,571

Parm Sandhu




53,768

246,257

246,257

Kelli Turner




52,055

238,412

238,412

Trey Turner









54




Under the terms of the Merger Agreement, CME is prohibited from granting additional equity awards during the pendency of the Merger. In lieu of granting the equity awards it otherwise would have granted in respect of 2020 as the long-term equity incentive component of the total direct compensation, on December 3, 2019, CME granted cash awards to each of the named executive officers (the “Cash Award”) having a value equivalent to the corresponding annual long-term equity incentive awards that the Cash Award is replacing. Such Cash Awards will be payable in four equal instalments on each anniversary of the grant date, and the full amount of the Cash Awards will be payable in connection with a change in control, an involuntary termination without cause or voluntary termination for Good Reason pursuant to the terms of the underlying agreement. For the named executive officers, the amounts of these Cash Awards is set forth in the section entitled “Payments At or Following Change in Control.”
Severance Entitlements
Each named executive officer has entered into an employment agreement with the Company or one of its subsidiaries, and these agreements are all governed by English law. Each agreement provides for compensation in the event of an involuntary termination without cause or a voluntary termination for Good Reason. These termination payments were negotiated with each named executive officer individually and do not conform to a single policy or model.
Further, as described above in the section entitled “Summary of Outstanding Equity Awards,” and below in the section entitled “Payments At or Following Change in Control,” each named executive officer is entitled to receive any unpaid amount of the Retention Bonus and Cash Award in the event of an involuntary termination without cause or a voluntary termination for Good Reason prior to consummation of the Merger pursuant to the terms of the underlying agreement.
Michael Del Nin and Christoph Mainusch
    
Messrs. Del Nin and Mainusch are each employed for an indefinite term pursuant to an amended and restated employment agreement dated as of December 21, 2017, as amended from time to time. Pursuant to his employment agreement, each of these named executive officers may terminate his employment following certain uncured material breaches by CME, which following a change in control also include Class A Shares ceasing to publicly trade on Nasdaq, specified changes in the composition of the Board of Directors of the Company, as well as the expiration of a six-month period following such change in control (each, “Good Reason”). If the Company terminates either named executive officer without cause or if he terminates for Good Reason, the Company is required to make a severance payment equal to the sum of (i) two times his annual base salary, (ii) two times an amount equal to the average annual bonus paid to him for the two full fiscal years prior to such termination, and (iii) his target bonus for the year in which termination occurs, pro-rated to the termination date. Such amounts will be payable in a single lump sum within 30 days following termination of employment, so long as the named executive officer timely executes and delivers a compromise agreement that would include a release of claims.
Either named executive officer may also terminate his employment at any time on 12 months’ written notice to the Company. CME may elect to make payment in lieu of notice and pay such named executive officer the portion of his annual base salary for the portion of the notice period remaining at the time the Company makes this election.
The Company may terminate either named executive officer at any time for cause without notice. Neither named executive officer is entitled to any severance benefits or any other payment whatsoever (other than base salary and other benefits accrued through the date of termination) if his employment terminates for cause.

55




If the Company terminates Messrs. Del Nin and Mainusch (other than for cause) or if either terminates his employment for Good Reason, all unvested Company Options granted to Messrs. Del Nin and Mainusch would vest and become fully exercisable immediately prior to the termination date and all time-based Company RSUs would vest and all restrictions thereon would lapse. In addition, any performance conditions for performance-based Company RSUs shall lapse and an amount of performance-based Company RSUs based on performance levels calculated pursuant to the underlying award agreement would vest. Pursuant to the underlying award agreement, performance levels for any completed fiscal year will be based on actual results and performance levels for any fiscal year not yet completed will be based on target levels. In connection with the Merger, each named executive officer’s outstanding Company Options will become vested and immediately exercisable and Company RSUs shall become vested and restrictions shall lapse immediately prior to the Effective Time, and such named executive officer shall be entitled to such consideration in respect thereof as set forth in the section of this proxy statement captioned, “Payments At or Following Change in Control.”
In addition, as described above in the section entitled “Summary of Outstanding Equity Awards,” and below in the section entitled “Payments At or Following Change in Control,” Messrs. Del Nin and Mainusch are entitled to any unpaid Retention Bonus or Cash Award in the event of an involuntary termination without cause or a voluntary termination for Good Reason prior to consummation of the Merger pursuant to the terms of the underlying agreements.
David Sturgeon and Daniel Penn
Messrs. Sturgeon and Penn are each employed for an indefinite term pursuant to an amended and restated employment agreement dated as of December 21, 2017, as amended from time to time. Pursuant to his employment agreement, each of Messrs. Sturgeon and Penn may terminate his employment for Good Reason. The amount of severance owed differs between Messrs. Sturgeon and Penn:
if the Company terminates Mr. Sturgeon without cause or if he terminates for Good Reason, the Company shall make a severance payment equal to the sum of (i) his annual base salary, (ii) his target bonus in respect of his notice period, and (iii) his target bonus for the year in which termination occurs, pro-rated to the termination date; and
if the Company terminates Mr. Penn without cause or if he terminates for Good Reason, the Company shall make a severance payment equal to the sum of (i) his annual base salary, (ii) two times his target bonus in respect of his notice period, (iii) an amount equal to the cash value of the number of days of holiday in respect of the notice period, and (iv) his target bonus for the year in which termination occurs, pro-rated to the termination date. He shall also be entitled to receive an amount equal to the cash value of the number of days of accrued holiday in that relevant holiday year as well as holiday carried over from previous years.
Severance owed to Messrs. Sturgeon and Penn is payable in a lump sum within 30 days following termination of employment, so long as the named executive officer timely executes and delivers a compromise agreement that would include a release of claims. In addition, subject to the delivery of such a compromise agreement, Messrs. Sturgeon and Penn are each entitled to medical and dental insurance for a period of 12 months following their involuntary termination without cause or voluntary termination for Good Reason.

Either named executive officer may also terminate his employment at any time on 12 months’ written notice to the Company. CME may elect to make payment in lieu of notice and pay such named executive officer the portion of his annual base salary for the portion of the notice period remaining at the time the Company makes this election.

56




The Company may terminate either named executive officer at any time for cause without notice. Messrs. Sturgeon and Penn are not entitled to any severance benefits or any other payment whatsoever (other than base salary and other benefits accrued through the date of termination) if their employment is terminated for cause.
The equity award agreements for Messrs. Sturgeon and Penn do not provide for the vesting of any awards on termination. Any Company RSUs and unvested Company Options awarded to Messrs. Sturgeon and Penn shall immediately terminate on the date of his termination. In connection with the Merger, each named executive officer’s unvested Company Options shall become vested and immediately exercisable and outstanding Company RSUs shall be vested and all restrictions thereon shall lapse immediately prior to the Effective Time, and such named executive officer shall be entitled to such consideration in respect thereof as set forth in the section of this proxy statement captioned, “Payments At or Following Change in Control.”
In addition, as described above in the section entitled “Summary of Outstanding Equity Awards,” and below in the section entitled “Payments At or Following Change in Control,” Messrs. Sturgeon and Penn are entitled to any unpaid Retention Bonus or Cash Award in the event of an involuntary termination without cause or a voluntary termination for Good Reason prior to consummation of the Merger pursuant to the terms of the underlying agreements.
Payments At or Following Change in Control
The table below, including its footnotes, is intended to provide the information required by Item 402(t) of Regulation S-K regarding the amount of compensation payable to each of the Company’s named executive officers that is based on or otherwise related to the Merger. The calculations for the “double-trigger” payments (i.e. payable only following both a change in control and related termination) below are determined using the Common Share Consideration and are based on certain other assumptions that may or may not actually occur or be accurate on the relevant date and do not reflect certain compensation actions that may occur before the Effective Time. Included in these assumptions, among others, is the possibility that the termination of each of CME’s named executive officers may occur immediately following the consummation of the Merger.
Some of these assumptions are based on information not currently available; as a result, the actual amounts, if any, to be received by CME’s named executive officers may differ in material respects from the amounts set forth below. This compensation set forth in this section (“Payments At or Following Change in Control”) is the subject of an advisory (non-binding) vote as described further in the section of this proxy statement captioned “Proposal 2: Approval of the Compensation Advisory Proposal.” For purposes of calculating the amounts included in the table below, CME has assumed January 1, 2020 as the closing date of the Merger and that each of CME’s named executive officers experiences a qualifying termination immediately following the consummation of the Merger.
Please further note that the employment agreements entered into with the Company’s named executive officers do not provide for “single trigger” vesting of severance benefits upon a change in control, and severance payments are made only if the named executive officer experiences a qualifying termination of employment, which includes a termination by the Company without cause or termination by the named executive officer for Good Reason. However, as set forth in the section of this proxy statement captioned, “Interests of CME’s Directors and Executive Officers in the Merger—Treatment of Company Options and Company RSUs,” each named executive officer’s outstanding equity awards shall be vested on the closing date of the Merger. In addition, the “Cash” column in the table below includes the amounts owed to each named executive officer under the Cash Award and the Retention Bonus, both of which are “single-trigger” in nature and therefore payable upon the closing of the Merger alone. Under the Retention Bonus agreements, Messrs. Del Nin, Mainusch, Sturgeon and Penn will each be entitled to payment in the amount of $2.2 million, $2.0 million, $1.2 million and $1.2 million, respectively. Under the Cash Award agreements, Messrs. Del Nin, Mainusch,

57




Sturgeon, and Penn will each be entitled to payment in the amount of approximately $1.4 million, $1.4 million, $512 thousand and $641 thousand, respectively.
The employment agreement for each named executive officer contains non-competition provisions applicable for a 12-month period following termination, a covenant regarding corporate opportunities and a prohibition on the use of confidential information.
Name
Cash
($)(1)

Equity
($)(2)

Perquisites/​
Benefits
($)(3)

Total
($)

Michael Del Nin
9,406,242

4,486,051


13,892,293

Christoph Mainusch
9,184,020

4,486,051


13,670,071

David Sturgeon
2,901,468

1,679,249

17,421

4,598,138

Daniel Penn
3,686,374

2,098,570

4,966

5,789,910


(1)
(A) For Messrs. Del Nin and Mainusch, this represents for each a cash severance payment equal to the sum of two times his annual base salary, two times an amount equal to his average annual bonus paid to him for the two full fiscal years prior, and his target bonus for the year in which termination occurs, pro-rated to the termination date. For Mr. Sturgeon, this represents the sum of his annual base salary, his target bonus in respect of his notice period, and his target bonus for the year in which termination occurs pro-rated to the termination date. For Mr. Penn, this represents the sum of his annual base salary, two times his target bonus in respect of his notice period, an amount equal to the cash value of the number of days of holiday that would accrue over the 12-month notice period, and his target bonus for the year in which termination occurs pro-rated to the termination date. For each named executive officer, the amounts above are payable in a lump sum within 30 days following termination of employment. The table above does not include any statutory severance or other severance amounts payable under applicable law. Each named executive officer must execute, deliver and not revoke a compromise agreement containing customary terms and conditions within 30 days following the termination date in order to receive these benefits. The cash payments described above include the components described below. The severance-based payments are “double-trigger” in nature in that they will not become payable upon the closing of the Merger alone; the applicable named executive officer has to also incur a qualifying termination. Pursuant to each named executive officer’s employment agreement, CME is obligated immediately prior to the closing of the Merger, to contribute to a trust an amount of cash sufficient to fund 100% of all severance payments owed to the named executive officers. (B) In addition, as noted above, the preceding table includes the amounts owed to each named executive officer under the Cash Award and the Retention Bonus, both of which are “single-trigger” in nature and therefore payable upon the closing of the Merger alone. Under the Retention Bonus agreements, Messrs. Del Nin, Mainusch, Sturgeon, and Penn will each be entitled to payment in the amount of approximately $2.2 million, $2.0 million, $1.2 million and $1.2 million, respectively. Under the Cash Award agreements, Messrs. Del Nin, Mainusch, Sturgeon, and Penn will each be entitled to payment in the amount of approximately $1.4 million, $1.4 million, $512 thousand and $641 thousand, respectively.

58




Name
Annual Base
Salary
(US$)
Target
Bonus (%)
Average Annual Bonus (US$)
Value of 12 Months’ Holiday Accrual
(US$)
Pro-Ration
Factor for
Target Bonus
Total Contractual Severance Payment (US$)
Retention Bonus
(US$)
Cash Award
(US$)
Total Cash
Payment
(US$)
Michael Del Nin
996,000


1,905,000



5,802,000

2,214,242

1,390,000

9,406,242

Christoph Mainusch
996,000


1,905,000



5,802,000

1,992,020

1,390,000

9,184,020

David Sturgeon
580,000

100
%



1,160,000

1,229,468

512,000

2,901,468

Daniel Penn
586,000

100
%

67,615


1,825,615

1,219,759

641,000

3,686,374

(2)
As further described above in the section captioned “Interests of CME’s Directors and Executive Officers in the Merger—Treatment of Company Options and Company RSUs,” the equity amount consists of the value attributable to the acceleration, and payment to be received upon cancellation of the Company Options and Company RSUs. With respect to performance-based Company RSUs that relate to the period from 2019 through 2022, the number of Company RSUs that may be earned are determined by measuring performance levels against target immediately prior to the Effective Time, with such performance levels being based on actual performance for any completed fiscal year and target levels for any uncompleted period in accordance with the corresponding award agreement. Accordingly, depending upon actual performance in any fiscal year that is completed, the number of vested performance-based Company RSUs may vary from what is described below.
The amounts shown do not attempt to forecast any grants, additional issuances, dividends, additional deferrals or forfeitures of equity-based awards following the date of this proxy statement. In addition, with respect to performance-based Company RSUs, the amounts shown do not attempt to measure actual performance for the fiscal year ending December 31, 2019. Depending on when the closing date of the Merger occurs, all equity incentive awards will vest or become immediately exercisable prior to the Effective Time and become payable in accordance with the Merger Agreement. The equity-based payments are “single-trigger” in nature as they will become payable immediately upon the closing date of the Merger, whether or not employment is terminated in connection with or following the Merger.
Set forth below are the values for each type of equity incentive award that would vest or become exercisable and become payable in connection with the closing of the Merger, assuming the Common Share Consideration. The value of Company Options is calculated as (1) the amount of the Common Share Consideration (less the exercise price per share attributable to such Company Option), multiplied by (2) the total number of Class A Shares of the Company issuable upon exercise in full of such Company Option.

59




Name
Company
Options
($)
Company
RSUs
($)
Total
($)
Michael Del Nin
1,417,547

3,068,504

4,486,051

Christoph Mainusch
1,417,547

3,068,504

4,486,051

David Sturgeon
567,019

1,112,230

1,679,249

Daniel Penn
708,774

1,389,796

2,098,570


(3)
The amounts shown in the table above represent the Company’s cost of providing continued medical and dental insurance for 12 months (for Messrs. Sturgeon and Penn) following termination of employment by the Company without cause or termination by the named executive officer for Good Reason. These benefits are “double-trigger” in nature in that they will not be triggered upon the closing of the Merger alone; the applicable named executive officer has to also incur a qualifying termination. These amounts do not include payments and benefits to the extent they are provided on a non-discriminatory basis to CME’s salaried employees generally upon termination of employment, such as: (i) accrued base salary, (ii) earned but unpaid bonuses, (iii) distributions of plan balances under Company’s 401(k) plan or other defined contribution plans and (iv) accrued holidays.
Financing of the Merger
The obligation of Parent and Merger Sub to consummate the Merger is not subject to any financing condition.
The amounts committed under the financing commitments and other documents described in this section include the funds needed to cover (1) the payment to shareholders and holders of Company Options and Company RSUs of the amounts payable in connection with the Merger pursuant to the Merger Agreement, (2) the repayment, prepayment or discharge of the Company Indebtedness, and (3) the payment of all fees and expenses required to be paid by Parent or Merger Sub in connection with the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement, including those required to be paid at the closing of the Merger in connection with the Merger and the financing thereof.
Although obtaining any proceeds of the financing under the Equity Commitment Letter or the Debt Financing Documents is not a condition to the consummation of the Merger, the failure of Parent and Merger Sub to obtain any portion of the Equity Financing or Debt Financing (or any alternative financing) is likely to result in the failure of the Merger to be completed. In that case, Parent may be obligated to pay CME the Parent Termination Fee of $50 million, as described in the section of this proxy statement captioned “The Merger Agreement—Termination Fees”.
Equity Financing
Pursuant to the Equity Commitment Letter, PPF has agreed, subject to the conditions contained therein, to provide Parent with up to $1.099 billion in cash to fund, together with the proceeds available under the Debt Financing Documents, the aggregate Merger Consideration payable in connection with the Merger pursuant to the Merger Agreement and the payment by Parent or Merger Sub of related fees and expenses in connection with the Merger (the “Equity Financing”).

60




Funding of the Equity Financing is subject to the terms, conditions and limitations set forth in the Equity Commitment Letter, which conditions include (i) the satisfaction or waiver by Parent or Merger Sub of all conditions precedent set forth in the Merger Agreement to Parent’s and Merger Sub’s obligations to effect the Closing (other than those conditions that by their terms are to be satisfied at the Closing), (ii) the contemporaneous receipt by Parent or Merger Sub of the net cash proceeds of the Debt Financing or any alternative financing provided in accordance with the Merger Agreement and (iii) the contemporaneous closing of the Merger on the terms and subject to the conditions of the Merger Agreement.
The obligation of PPF to fund the Equity Financing will terminate automatically and immediately upon the earliest to occur of (i) the closing of the Merger, (ii) the valid termination of the Merger Agreement in accordance with its terms and (iii) the written assertion by the Company or any of its subsidiaries or their respective representatives acting on the Company’s behalf in any legal proceeding of any claim against PPF, Parent, Merger Sub or any of their related parties (as defined in the Equity Commitment Letter) relating to the Equity Commitment Letter, the Limited Guarantee or the Merger Agreement or any of the transactions contemplated thereby (other than certain non-prohibited claims described therein).
Pursuant to the terms and conditions of the Merger Agreement, Parent and Merger Sub will use reasonable best efforts to take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to arrange and consummate the Equity Financing on the terms and conditions contemplated by the Equity Commitment Letter.
The Equity Commitment Letter provides that CME is an express third party beneficiary thereof in connection with CME’s exercise of its rights related to specific performance under the Merger Agreement. The Equity Commitment Letter may not be waived, amended or modified except by a written instrument signed by Parent, PPF and CME.
Debt Financing
Pursuant to the Debt Financing Documents, the Lenders have committed, subject to the terms thereof, to make available to Parent a €1.1 billion term loan (the “Acquisition and Refinancing Facility”) and a €50 million revolving facility (the “RCF” and, together with the Acquisition and Refinancing Facility, the “Debt Financing”). The Debt Financing Documents also include the opportunity for Parent to incur additional incremental facilities.
The Acquisition and Refinancing Facility is to be utilized to fund a portion of the aggregate Merger Consideration payable to Company shareholders in connection with the Merger and to finance the repayment, prepayment or discharge of the Company Indebtedness and to pay the fees and expenses required to be paid at the closing of the Merger by Parent and Merger Sub contemplated by the Merger Agreement. The RCF is to be utilized for the general corporate and working capital purposes of Parent and its subsidiaries.
The commitments of the Lenders to provide the Acquisition and Refinancing Facility remain in effect until the earliest to occur of (1) the closing date of the Merger, (2) the date that is the fifth business day after the Outside Date (or such other date as the Lenders may agree), (3) the date of any Change of Recommendation, (4) the date upon which Parent notifies the Lenders in writing that it has decided not to proceed with the consummation of the Merger in accordance with the Merger Agreement and (5) the date that the Merger Agreement or the Voting Agreement is terminated or rescinded.
The availability of the Acquisition and Refinancing Facility is subject to delivery of certain documents and evidence (which documents and evidence are within the control of Parent or required in connection with the Merger Agreement) and certain limited conditions precedent, customary for “certain funds” financings of transactions comparable to the Merger.

61




Pursuant to the Merger Agreement, Parent and Merger Sub have agreed to use their respective reasonable best efforts to satisfy all such conditions precedent and upon satisfaction of all such conditions precedent, to cause the Lenders to fund the Debt Financing at the closing of the Merger and to otherwise enforce their rights under the Debt Financing Documents. Parent and Merger Sub have also agreed not to permit any amendment, replacement, supplement, modification or waiver of the Debt Financing Documents in a manner that would or would reasonably be expected to reduce the aggregate amount of the Debt Financing to less than the amount required (together with equity commitments) to consummate the Merger, delay or prevent the closing of the Merger, or make the timely funding of the Debt Financing less likely to occur.
In the event any portion of the Debt Financing becomes unavailable in the manner or from the sources contemplated in the Debt Financing Documents (other than as a result of the Company’s breach of any representation, warranty, covenant or agreement set forth in the Merger Agreement), Parent and Merger Sub are required under the Merger Agreement to use their reasonable best efforts to arrange and obtain alternative debt financing from the same or alternative financial institutions in an amount that when added with Parent and Merger Sub’s existing cash on hand and the equity financing is sufficient to consummate the transactions contemplated by the Merger Agreement and on terms and conditions that are not materially less favorable, in the aggregate, to Parent or Merger Sub than the terms in the Debt Financing Documents.
The Company and its subsidiaries and their respective representatives are required under the Merger Agreement to use their respective reasonable best efforts to provide Parent such necessary or customary cooperation as may be reasonably requested by Parent to assist Parent in causing the conditions in the Debt Financing Documents to be satisfied and such customary cooperation as is otherwise reasonably necessary and reasonably requested by Parent solely in connection with satisfying such conditions, including (i) assisting with timely preparation of customary presentations, road show materials and bank syndication materials required in connection with the Debt Financing, (ii) furnishing Parent and the Lenders as promptly as practicable with all financial information regarding the Company or its subsidiaries as may be reasonably required under the Debt Financing Documents, (iii) reasonably cooperating with the Lenders to evaluate the Company’s and its subsidiaries’ current assets, cash management and accounting systems, policies and procedures relating thereto for the purpose of establishing collateral arrangements to the extent customary and reasonable, (iv) requesting customary payoff letters, lien terminations and instruments of discharge to be delivered at the closing of the Merger to allow for the payoff, discharge and termination in full of the Company Indebtedness, (v) furnishing Parent and the Lenders with all documentation and other information reasonably requested by the Lenders (in accordance with their usual practices and procedures) or required by any governmental entities with respect to the Debt Financing under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act and any applicable national or international sanctions regime, (vi) assisting in the preparation of, and executing and delivering on the closing date of the Merger, deliverables under the Debt Financing Documents relating to the Debt Financing on substantially the terms contemplated by the Debt Financing Documents and (vii) taking all corporate actions, subject to and only effective upon the occurrence of the Effective Time, as may be reasonably requested by Parent to permit the satisfaction of conditions precedent to the Debt Financing.

Limited Guarantee
Pursuant to the limited guarantee entered into by PPF in favor of CME (the “Limited Guarantee”), PPF has agreed, subject to the terms and conditions set forth therein, to guarantee Parent’s obligation to pay to CME the Parent Termination Fee, if and when due pursuant to the Merger Agreement (subject to an aggregate cap of $50 million), and certain fees, costs and expenses and interest (if any) payable by Parent to the Company pursuant to the Merger Agreement.

62




The Limited Guarantee will automatically and immediately terminate upon the earliest to occur of (1) the consummation of the closing of the Merger; (2) the receipt in full by CME or its affiliates of the obligations guaranteed by PPF under the Limited Guarantee; and (3) the date that is 180 days after the termination of the Merger Agreement in accordance with its terms in any circumstance pursuant to which Parent would be obligated to pay any of the obligations guaranteed under the Limited Guarantee, if by such date the Company has not made a claim in writing to Parent or PPF for payment of any such obligation.
Subject to the terms and conditions of the Limited Guarantee and the Equity Commitment Letter, CME’s recourse under and pursuant to such documents is CME’s sole and exclusive remedy against PPF and its affiliates (other than Parent, Merger Sub or any subsidiary thereof) in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement, any documents or instruments delivered in connection therewith, or the transactions contemplated thereby.
The Voting Agreement
The following summary describes the material provisions of the Voting Agreement. The description of the Voting Agreement in this summary and elsewhere in this proxy statement are not complete and are qualified in their entirety by reference to the Voting Agreement, which is attached to this proxy statement as Annex A-3 and incorporated into this proxy statement by reference. CME encourages you to read the Voting Agreement carefully and in its entirety because this summary may not contain all the information about the Voting Agreement that is important to you. The rights and obligations of the parties are governed by the express terms of the Voting Agreement and not by this summary or any other information contained in this proxy statement.
Concurrently with the execution of the Merger Agreement, the Warner Parties entered into a Voting Agreement with the Company and Parent pursuant to which the Warner Parties have committed to appear (in person or by proxy) and to vote (or cause to be voted) the Warner Shares in favor of, and take certain other actions in furtherance of, the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement, including the Merger, and any “say on pay” vote regarding executive compensation, such as the Compensation Advisory Proposal.
Voting Provisions
Under the Voting Agreement, the Warner Parties have agreed, during the term of the Voting Agreement, at any meeting of Company shareholders or in connection with any written consent of the Company shareholders, to appear (in person or by proxy) and to vote (or cause to be voted) all of the Warner Shares (1) in favor of any proposal to adopt the Merger Agreement and the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger, (2) in favor of any proposal or action that (A) is required under applicable law for the transactions contemplated by the Merger Agreement, including the Merger, to be effective and (B) requires consent of the Company’s shareholders to be validly approved, (3) in favor of any “say on pay” vote regarding executive compensation, (4) against any action or agreement that would reasonably be likely to result in a material breach of any covenant or agreement of the Company under the Merger Agreement or the Statutory Merger Agreement, or of a Warner Party under the Voting Agreement if Parent has provided five business days’ advance notice to the Warner Parties in accordance with the terms of the Voting Agreement that such action would reasonably be likely to result in a material breach of any covenant or agreement of the Company contained in the Merger Agreement or the Statutory Merger Agreement, (5) against any Competing Proposal, (6) against any reorganization, recapitalization, liquidation or winding up of the Company and (7) against any action or agreement that would frustrate the purposes, or prevent or materially delay the consummation, of the transactions contemplated by the Merger Agreement.

63




Grant of Proxy
The Warner Parties have each granted Parent a proxy to vote the Warner Shares or otherwise use such voting power in accordance with the Voting Agreement, and have agreed not to revoke such proxy except to permit such Warner Party to attend the Special General Meeting of the Company or any other meeting of the Company’s shareholders and vote its Warner Shares in accordance with the Voting Agreement.
Restrictions on Transfers and Grants of Proxies
Pursuant to the Voting Agreement, other than in certain limited circumstances, the Warner Parties have agreed that, during the term of the Voting Agreement, they will not, directly or indirectly sell, assign, transfer, encumber or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to, the direct or indirect sale, assignment, transfer, encumbrance or other disposition of any of the Warner Shares. Additionally, except as contemplated by the Voting Agreement, until the earlier of the termination of the Voting Agreement and the Requisite Shareholder Approval, the Warner Parties have agreed, without the prior written consent of Parent (which consent cannot be unreasonably withheld, conditioned or delayed), not to grant any proxy, consent or power of attorney, or enter into any voting trust or other arrangement with respect to the voting of the Warner Shares and with respect to any vote on the approval and adoption of the Merger Agreement, the Statutory Merger Agreement.
In addition, during the term of the Voting Agreement, the Warner Parties have agreed not to convert or cause to be converted the Series A Preferred Share or any Series B Preferred Shares held by the Warner Parties into Class A Shares, and the Company has agreed not to redeem any of the Warner Parties’ Series B Preferred Shares.
Non-Solicitation
Additionally, the Warner Parties have each agreed not to, to cause its affiliates not to, and to use reasonable best efforts to cause their respective representatives not to, directly or indirectly (1) solicit or initiate the making or completion of any Competing Proposal, or any inquiry, proposal or offer that constitutes, or would reasonably be likely to lead to, any Competing Proposal, (2) enter into, continue or otherwise participate in any discussions or negotiations with any person regarding or with respect to, or otherwise knowingly facilitate, a Competing Proposal, (3) except to the extent required by applicable law, furnish to any person any information or data concerning the Company or any of its subsidiaries regarding or with respect to any Competing Proposal or (4) approve or recommend, make any public statement approving or recommending, or enter into any agreement relating to, any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, a Competing Proposal. Notwithstanding the foregoing, the Warner Parties and their respective affiliates and representatives are permitted to engage in the foregoing activities to the same extent that the Company is permitted to do so pursuant to the terms of the Merger Agreement.

64




Termination
The Voting Agreement, and the rights and obligations of each party thereto, will automatically terminate upon the earlier to occur of (1) the Effective Time, (2) the termination of the Merger Agreement in accordance with its terms and (3) the mutual written consent of the parties thereto. Additionally, the Warner Parties may terminate the Voting Agreement by providing a written notice to Parent at any time following (a) a Change of Recommendation, (b) January 27, 2021 or (c) enactment of an amendment, waiver or other modification to the Merger Agreement that would be materially adverse to the Warner Parties’ interest in the Company, or the enactment of any amendment, waiver or other modification to the obligations of Parent and the Company under the Merger Agreement to cause the repayment and satisfaction in full of the Company Indebtedness, and the release and discharge of all related liens and shareholder guarantees, pursuant to the terms of the Merger Agreement. If the Voting Agreement is terminated by the Warner Parties, certain covenants contained therein will survive until the earlier to occur of the Effective Time and the termination of the Merger Agreement in accordance with its terms, including (i) the authorization and consent of the Warner Parties to allow Parent to publish and disclose the Warner Parties’ identities and holding of the Warner Shares and the nature of their commitments, arrangements and understandings under the Voting Agreement, (ii) the agreement by the Warner Parties not to exercise any appraisal or dissenters’ rights in connection with the Merger and not to commence or participate in any action with respect to any claim against Parent, Merger Sub, the Company or their respective affiliates with respect to the Merger Agreement, the Statutory Merger Agreement, the Merger or the other transactions contemplated thereby, (iii) certain covenants pertaining to the Company Indebtedness and (iv) the restriction against converting the Series A Preferred Share or any of the Series B Preferred Shares held by the Warner Parties into Class A Shares.
Closing and Effective Time
The closing of the Merger will take place at 10:00 a.m., Bermuda time, at the offices of Conyers Dill & Pearman Limited, Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda, no later than the third business day after the satisfaction or waiver of the conditions as described under the section of this proxy statement captioned “The Merger Agreement—Conditions to the Closing of the Merger” (other than any such conditions that by their nature are to be satisfied by action taken at the closing, but subject to the satisfaction or waiver of such conditions at the closing), unless another time, date or place is agreed by the Company and Parent; provided that if the Marketing Period (as described below under the section of this proxy statement captioned “The Merger Agreement—Financing”) has not ended at such time, then the closing of the Merger will occur instead on the date following the satisfaction or waiver of such conditions (other than any such conditions that by their nature are to be satisfied by action taken at the closing, but subject to the satisfaction or waiver of such conditions at the closing) that is the earlier to occur of (a) any business day during the Marketing Period as may be specified by Parent on no less than two business days’ prior written notice to the Company and (b) the business day immediately following the final day of the Marketing Period.
On the closing date of the Merger, Parent, Merger Sub and the Company will execute and deliver the Statutory Merger Agreement. Additionally, on or prior to the closing date of the Merger, the parties will cause an application for registration of the Merger and the Surviving Company to be executed and delivered to the Registrar of Companies in Bermuda. The Merger will become effective at the Effective Time.


65




Dissenters’ Rights of Appraisal for Company Shareholders
Any shareholder who does not vote in favor of the Merger Proposal and who is not satisfied that it has been offered fair value for its Class A Shares of the Company may, within one month of the giving of the notice calling the Special General Meeting, apply to the Bermuda Court to appraise the fair value of its Class A Shares of the Company, provided that such shareholder fully complies with the requirements of the Companies Act. Under the Voting Agreement, the Warner Parties have waived their rights of appraisal under Bermuda law with regards to the Warner Shares in connection with the Merger.
FOR THE AVOIDANCE OF DOUBT, A FAILURE OF A DISSENTING SHAREHOLDER TO AFFIRMATIVELY VOTE AGAINST THE MERGER PROPOSAL WILL NOT CONSTITUTE A WAIVER OF ITS RIGHT TO HAVE THE FAIR VALUE OF ITS CLASS A SHARES OF THE COMPANY APPRAISED, PROVIDED THAT SUCH DISSENTING SHAREHOLDER DID NOT VOTE IN FAVOR OF THE MERGER PROPOSAL.
The Bermuda Court can determine the fair value to be greater than, less than, or equal to the Common Share Consideration. Where the Bermuda Court has appraised the fair value of any Class A Share of the Company and the Merger has been consummated prior to the appraisal (as is anticipated) then, within one month of the Bermuda Court appraising the value of the Class A Shares, the Surviving Company will pay to such Dissenting Shareholder the Common Share Consideration, plus the difference, if positive, between the Common Share Consideration and the “fair value” of such Class A Shares, as appraised by the Bermuda Court. If the “fair value” of Class A Shares as appraised by the Bermuda Court is lower than or equal to the Common Share Consideration, such Dissenting Shareholder will not be entitled to receive any consideration in addition to the Common Share Consideration.
There is no right of appeal from an appraisal by the Bermuda Court. The costs of any application to the Bermuda Court to appraise the fair value of Class A Shares shall be at the discretion of the Bermuda Court.
Material U.S. Federal Income Tax Consequences of the Merger
The following discussion is a summary of the material U.S. federal income tax consequences of the Merger to U.S. Holders and Non-U.S. Holders (as defined below) of Class A Shares whose shares are converted into the right to receive cash pursuant to the Merger. This discussion is limited to shareholders who hold their Class A shares as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment purposes).
This discussion is based upon the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated thereunder, court decisions, published positions of the Internal Revenue Service (the “IRS”), and other applicable authorities, all as in effect on the date of this proxy statement and all of which are subject to change or differing interpretations at any time, possibly with retroactive effect.

66




This discussion is for general information only and does not purport to address all of the tax consequences that may be relevant to shareholders in light of their particular circumstances, including, for example, banks or other financial institutions; tax-exempt organizations; retirement or other tax deferred accounts; S corporations (or investors in S corporations); insurance companies; mutual funds; dealers in stocks and securities; traders in securities that elect to use the mark-to-market method of accounting for their securities; regulated investment companies; real estate investment trusts; entities subject to the U.S. anti-inversion rules; certain former citizens or long-term residents of the United States; shareholders that own or have owned (directly, indirectly or constructively) 5% or more of CME’s Class A Shares (by vote or value); shareholders holding CME’s Class A Shares as part of a hedging, constructive sale or conversion, straddle or other risk reduction transaction; shareholders that received their Class A Shares in a compensatory transaction, through a tax qualified retirement plan or pursuant to the exercise of options or warrants; shareholders who own an equity interest, actually or constructively, in Parent following the Merger; U.S. Holders whose “functional currency” is not the U.S. dollar; or shareholders subject to special tax accounting rules as a result of any item of gross income with respect to the Class A Shares being taken into account in an “applicable financial statement” (as defined in the Code).
This discussion does not address any considerations under U.S. federal tax laws other than income taxes, including tax consequences arising from the Medicare tax on net investment income, with respect to the Foreign Account Tax Compliance Act of 2010 (including the Treasury Regulations promulgated thereunder and any intergovernmental agreements entered in connection therewith and any laws, regulations or practices adopted in connection with any such agreement), or the U.S. federal alternative minimum tax consequences of the Merger. Furthermore, this discussion does not address any state, local or non-U.S. tax consequences or any tax consequences to shareholders that do not vote in favor of the Merger and properly demand appraisal of their Class A Shares under Section 106 of the Companies Act or that entered into a voting agreement as part of the transactions described in this proxy statement.
If a partnership (including an entity or arrangement that is treated as a partnership or other pass-through entity for U.S. federal income tax purposes) holds CME’s Class A Shares, then the tax treatment of a partner in such partnership will generally depend upon the status of the partner and the activities of the partner and the partnership. Partnerships holding Class A Shares of the Company and partners therein should consult their tax advisors regarding the consequences of the Merger.
CME has not sought, and does not intend to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in this discussion, and no assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge by the IRS in the event of litigation.
THIS DISCUSSION IS FOR GENERAL INFORMATIONAL PURPOSES ONLY AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE. CME URGES YOU TO CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO YOU IN CONNECTION WITH THE MERGER IN LIGHT OF YOUR OWN PARTICULAR CIRCUMSTANCES, INCLUDING U.S. FEDERAL NON-INCOME TAX CONSEQUENCES, AND TAX CONSEQUENCES UNDER STATE, LOCAL OR NON-U.S. TAX LAWS.

67




U.S. Holders
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of Class A Shares that is, for U.S. federal income tax purposes:
an individual citizen or resident of the United States;
a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
a trust (1) that is subject to the primary supervision of a court within the United States and the control of one or more United States persons as defined in Section 7701(a)(30) of the Code or (2) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.
The receipt of cash in exchange for CME’s Class A Shares pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. Subject to the discussion in the following paragraph regarding the “passive foreign investment company” (or “PFIC”) rules, in general, a U.S. Holder’s gain or loss will be equal to the difference, if any, between the amount of cash received and the U.S. Holder’s adjusted tax basis in the Class A Shares surrendered pursuant to the Merger. Gain or loss must be determined separately for each block of shares (that is, shares acquired at the same cost in a single transaction). Such gain or loss will be capital gain or loss and will be long-term capital gain or loss if such U.S. Holder’s holding period in such Class A Shares is more than one year at the time of the completion of the Merger. Long-term capital gains of a non-corporate U.S. Holder (including individuals) are generally eligible for reduced tax rates. The deductibility of capital losses is subject to limitations.
If CME is a PFIC for the current taxable year or has been a PFIC during any prior taxable year in which a U.S. Holder held Class A Shares, special rules would apply to such U.S. Holder’s disposition of Class A Shares in the Merger. Based on the current and anticipated value of CME’s assets and the composition of its income and assets, CME does not believe that it was a PFIC for its taxable year ended in December 31, 2019 or any prior taxable year, nor does CME expect to be a PFIC for the current taxable year. However, this conclusion is a factual determination that is made annually and thus will not be determinable until the close of CME’s current taxable year. U.S. Holders are urged to consult their own tax advisors regarding the application of the PFIC rules to the disposition of Class A Shares in the Merger.
Non-U.S. Holders
For purposes of this discussion, a “Non-U.S. Holder” is a beneficial owner of Class A Shares that is, for U.S. federal income tax purposes:
a nonresident alien individual;
a foreign corporation; or
a foreign estate or trust.
Any gain realized by a Non-U.S. Holder pursuant to the Merger generally will not be subject to U.S. federal income tax unless:

68




the gain is effectively connected with a trade or business of such Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States), in which case such gain generally will be subject to U.S. federal income tax at rates generally applicable to U.S. persons, and, if the Non-U.S. Holder is a corporation, such gain may also be subject to the branch profits tax at a rate of 30% (or a lower rate under an applicable income tax treaty); or
such Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other specified conditions are met, in which case such gain will be subject to U.S. federal income tax at a rate of 30% (or a lower rate under an applicable income tax treaty), which gain may be offset by certain U.S. source capital losses of such Non-U.S. Holder.
Information Reporting and Backup Withholding
Information reporting and backup withholding (currently, at a rate of 24%) may apply to the proceeds received by a shareholder pursuant to the Merger. Backup withholding generally will not apply to (1) a U.S. Holder that furnishes a correct taxpayer identification number and certifies that such shareholder is not subject to backup withholding tax on IRS Form W-9 (or a substitute or successor form) or (2) a Non-U.S. Holder that (i) provides a certification of such shareholder’s foreign status on the appropriate series of IRS Form W-8 (or a substitute or successor form) or (ii) otherwise establishes an exemption from backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against the shareholder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS.
THE FOREGOING DISCUSSION DOES NOT DISCUSS ALL ASPECTS OF U.S. FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO PARTICULAR SHAREHOLDERS. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF EXCHANGING THEIR CLASS A SHARES FOR CASH PURSUANT TO THE MERGER UNDER ANY FEDERAL, STATE, LOCAL OR NON-U.S. TAX LAWS.
Regulatory Approvals Required for the Merger
Generally
The Merger Agreement requires CME, Parent and Merger Sub to use reasonable best efforts to (i) take all appropriate actions and do, or cause to be done, all things necessary, proper or advisable under any applicable law or otherwise to consummate and make effective the transactions contemplated by the Merger Agreement as promptly as practicable, but in no event later than the Outside Date and (ii) obtain from any governmental entities any permits, authorizations, consents, approvals, waiting period expirations or terminations, or orders required to be obtained or made, or avoid any action or proceeding by any governmental entity, in connection with the authorization, execution and delivery of the Merger Agreement and the consummation of the transactions contemplated by the Merger Agreement.

69




Without limiting the foregoing, but subject to the provisions described below, the parties have each agreed to use reasonable best efforts to (i) as promptly as reasonably practicable make or cause to be made the applications or filings required to be made under or with respect to any applicable competition laws, required competition approvals, applicable communications laws or required communications approvals in connection with the authorization, execution and delivery of the Merger Agreement and the consummation of the transactions contemplated by the Merger Agreement, (ii) comply at the earliest reasonably practicable date with any request under or with respect to any of the foregoing laws or approvals for additional information, documents or other materials received by CME, Parent or any of its or their respective affiliates from any governmental entity in connection with such applications or filings or the transactions contemplated by the Merger Agreement, and (iii) coordinate and cooperate with, and give due consideration to all reasonable additions, deletions or changes suggested by, the other party in connection with any filing under or with respect to any applicable competition laws, required competition approvals, applicable communications laws or required communications approvals, and any filings, conferences or other submissions related to resolving any investigation or other inquiry by any applicable governmental entity in connection therewith.
Without limiting the foregoing, but subject to the provisions described below, the parties have each agreed to (i) cooperate with each other and use reasonable best efforts to take, as promptly as reasonably practicable, any and all actions necessary to avoid the entry of any injunction, order, decree, decision, determination or judgment that would delay, restrain, prevent, enjoin or otherwise prohibit consummation of the transactions contemplated by the Merger Agreement, including through the defense of litigation seeking to delay, restrain, prevent, enjoin or otherwise prohibit consummation of the transactions contemplated by the Merger Agreement and the proffer and agreement by Parent of its willingness to sell, lease, license or dispose of, or hold separate, any assets, rights, product lines, licenses or businesses or other operations of CME or any of its subsidiaries and (ii) if any such injunction, order, decree, decision, determination or judgment is entered or issued, or becomes reasonably foreseeable, cooperate with each other and use reasonable best efforts to take, as promptly as reasonably practicable, any and all steps necessary to resist, vacate, modify, prevent, reverse, suspend, eliminate or remove such injunction, order, decree, decision, determination or judgment.
Notwithstanding the foregoing, subject to certain exceptions, none of Parent, Merger Sub or any of their respective affiliates, or direct or indirect equity holders (including PPF) or their respective affiliates is required (and CME and its subsidiaries are not permitted to, without Parent’s prior written approval) take or agree to take any action, or agree or commit to any condition or restriction necessary to secure the requisite approvals and authorizations, that would (each of the following, a “Burdensome Condition”): (i) require any action by, or would impose any condition or restriction on, Parent, any of its affiliates or direct or indirect equity holders of Parent (including PPF) or their respective affiliates or any investment funds advised or managed by one or more affiliates of Parent or any direct or indirect portfolio companies thereof or any of their respective businesses, product lines or assets, (ii) require CME, Parent, any of their respective affiliates or direct or indirect equity holders (including PPF) or their respective affiliates or any investment funds advised or managed by one or more affiliates of Parent or any direct or indirect portfolio companies thereof to propose, negotiate, agree, accept, commit to or effect, by consent decree, hold-separate or administrative order or otherwise, the sale, transfer, license, divestiture or other disposition of, or any prohibition or limitation on the ownership, operation or effective control of, any of their businesses, product lines or assets (excluding such actions that would not reasonably be expected to be material to CME or certain of its significant subsidiaries, as applicable) or (iii) materially and adversely interfere with Parent’s or its affiliates’ ability to participate in the management, effectively control, or exercise of full rights of ownership of, CME or materially impair the aggregate economic benefits that Parent and its affiliates reasonably expect to derive from the consummation of the transactions contemplated by the Merger Agreement.

70




Both CME and PPF operate in the European Union. The EU Merger Regulation requires notification of and approval by the European Commission of mergers or acquisitions involving parties with worldwide and European Union sales exceeding given thresholds. The European Commission has an initial period of 25 working days after its receipt of the notification to issue its decision (“Phase I”). The European Commission may extend this Phase I period to 35 working days, if, within the first 20 working days after submission of the notification, the parties propose remedies to address any competition concerns identified by the European Commission. The European Commission may open an extended investigation, which extends Phase I by up to 90 working days, and can be extended to 105 working days, if remedies are offered after the 55th working day or to 110 working days by request of the parties or by the European Commission with consent of the parties. The Merger cannot be consummated until after the European Commission has issued its clearance decision. Parent is currently planning to file the required notification during the first quarter of 2020.
Communications laws and regulations of certain of the countries in which CME and its subsidiaries operate require that the applicable regulator in each such jurisdiction approve or be notified of the acquisition of control of a broadcasting license-holding company. Accordingly, applications or notifications in connection with the Merger will be timely filed with such regulators, pursuant to the Merger Agreement. The following notification has been filed:
a notification of a change of control of Pro TV S.R.L., an indirect subsidiary of CME (“Pro TV”), with the Competition Council of Romania for transmission to the Supreme Council of National Defense of Romania.
In addition, the following approval applications are expected to be filed before the end of the first quarter of 2020:
an application for approval from the National Audiovisual Council of Romania regarding the indirect shareholding change in Pro TV; and
an application for (i) the prior consent of the Ministry of Culture of the Republic of Slovenia with an indirect change of control in POP TV d.o.o. Ljubljana and Kanal A d.o.o., as television broadcasters, or, alternatively, should the Ministry of Culture of the Republic of Slovenia conclude that such consent is not required, (ii) a decision of the Ministry of Culture of the Republic of Slovenia rejecting the application due to the fact that such consent is not required.
Effect on CME if the Merger is Not Completed
If the Merger Proposal is not approved by shareholders, or if the Merger is not completed for any other reason:
Shareholders will not be entitled to, nor will they receive, any payment for their Voting Shares pursuant to the Merger Agreement;
CME will remain a public company, CME’s Class A Shares will continue to be listed and traded on Nasdaq and the Prague Stock Exchange and continue to be registered under the Exchange Act, and CME will continue to file periodic reports with the SEC;

71




CME anticipates that CME’s management will operate the business in a manner similar to that in which it is being operated today, and that CME shareholders will be subject to similar types of risks and uncertainties as those to which they are currently subject, including, but not limited to, risks and uncertainties with respect to CME’s business, prospects and results of operations, as such may be affected by, among other things, the highly competitive industry in which CME operates and economic conditions;
the price of CME’s Class A Shares may decline significantly, and if that were to occur, it is uncertain when, if ever, the price of the Class A Shares would return to the price at which they trade as of the date of this proxy statement;
the Board of Directors will continue to evaluate and review CME’s business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate (irrespective of these efforts, it is possible that no other transaction acceptable to the Board of Directors will be offered or that CME’s business, prospects and results of operations will be adversely impacted); and
under certain specified circumstances, CME will be required to pay Parent the Company Termination Fee of $50 million upon the termination of the Merger Agreement, and under certain other specified circumstances, Parent will be required to pay CME the Parent Termination Fee of $50 million upon termination of the Merger Agreement (for more information, please see the section of this proxy statement captioned “The Merger Agreement—Termination Fees”).


72




THE MERGER AGREEMENT
The following summary describes the material provisions of the Merger Agreement. The descriptions of the Merger Agreement in this summary and elsewhere in this proxy statement are not complete and are qualified in their entirety by reference to the Merger Agreement, a copy of which is attached to this proxy statement as Annex A-1 and incorporated into this proxy statement by reference. You should carefully read and consider the entire Merger Agreement and the Statutory Merger Agreement, which are the legal documents that govern the Merger, because this summary may not contain all the information about the Merger Agreement and Statutory Merger Agreement that is important to you. The rights and obligations of the parties are governed by the express terms of the Merger Agreement and the Statutory Merger Agreement and not by this summary or any other information contained in this proxy statement.
The representations, warranties, covenants and agreements described below and included in the Merger Agreement (1) were made only for purposes of the Merger Agreement and as of specific dates, (2) were made solely for the benefit of the parties to the Merger Agreement, and (3) may be subject to important qualifications, limitations and supplemental information agreed to by the Company, Parent and Merger Sub in connection with negotiating the terms of the Merger Agreement. In addition, the representations and warranties may have been included in the Merger Agreement for the purpose of allocating contractual risk between the Company, Parent and Merger Sub rather than to establish matters as facts, and may be subject to standards of materiality applicable to such parties that differ from those applicable to investors. Shareholders are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, Parent or Merger Sub or any of their respective affiliates or businesses. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosure. The Merger Agreement is described below, and included as Annex A-1, only to provide you with information regarding its terms and conditions, and not to provide any other factual information regarding the Company, Parent, Merger Sub or their respective businesses. Accordingly, the representations, warranties, covenants and other agreements in the Merger Agreement should not be read alone, and you should read the information provided elsewhere in this proxy statement and in the Company’s filings with the SEC regarding the Company and its business.
The Merger
The Merger Agreement provides that, on the terms and subject to the conditions of the Merger Agreement and the Statutory Merger Agreement, and in accordance with the Companies Act, at the Effective Time, Merger Sub will merge with and into the Company, with the Company continuing as the Surviving Company of such merger and a wholly-owned subsidiary of Parent.
Closing and Effective Time
See the section of this proxy statement captioned “The Merger—Closing and Effective Time.”

73




Directors and Officers; Certificate of Incorporation; Bye-Laws
At the Effective Time, the board of directors of the Surviving Company will consist of persons listed in the Statutory Merger Agreement to be the directors of the Surviving Company, and the officers of the Company as of immediately prior to the Effective Time will continue as the officers of the Surviving Company, in each case, to hold office in accordance with the memorandum of association and bye-laws of the Surviving Company until their respective successors are duly elected, designated or qualified or until their earlier death, resignation or removal.
At the Effective Time, the memorandum of association of the Surviving Company will be the memorandum of association of CME as in effect immediately prior to the Effective Time, with such memorandum of association being amended such that it is in the form of the memorandum of association of Merger Sub immediately prior to the Effective Time. At the Effective Time, the bye-laws of the Surviving Company shall be the bye-laws of Merger Sub as in effect immediately prior to the Effective Time.

Merger Consideration
Capital Stock
At the Effective Time, and without any action required by the Company, Parent, Merger Sub, any shareholder of the Company or any other person, each Class A Share issued and outstanding immediately prior to the Effective Time will be canceled and cease to exist automatically and each such Class A Share (other than such shares owned by the Company, Parent, Merger Sub or any of their respective direct or indirect wholly-owned subsidiaries) will be converted into the right to receive the Common Share Consideration.
At the Effective Time, and without any action required by the Company, Parent, Merger Sub, any shareholder of the Company or any other person, the Series A Preferred Share and each Series B Preferred Share issued and outstanding immediately prior to the Effective Time will be canceled and cease to exist automatically and will be converted into the right to receive the Series A Preferred Share Consideration and the Series B Preferred Share Consideration, respectively; provided that (1) any conversion of the Series A Preferred Share or any Series B Preferred Shares on or after October 27, 2019 will be deemed to be null and void, (2) any Class A Shares issued as a result of any conversion of the Series A Preferred Share or any Series B Preferred Shares will be canceled and cease to exist automatically and no consideration will be payable in exchange therefor, and (3) the Series A Preferred Share or any Series B Preferred Shares that were the subject of any such conversion will be canceled and cease to exist automatically and converted into the right to receive only the Series A Preferred Share Consideration or the Series B Preferred Share Consideration, as applicable, as if no such conversion had occurred.
Company Equity Awards
Immediately prior to the Effective Time, each Company Option that is unvested will become immediately vested and be exercisable in full and each Company Option that remains outstanding and unexercised as of such time will be automatically canceled, and the holder thereof will be entitled to receive a cash payment (less the amount of any applicable tax withholding) in an amount equal to the product of (i) the total number of Class A Shares underlying such unexercised Company Option immediately prior to the Effective Time and (ii) the excess of the Common Share Consideration over the exercise price per Class A Share subject to each such Company Option.

74




Immediately prior to the Effective Time, each Company RSU outstanding immediately prior to the Effective Time will become immediately vested and all restrictions thereupon will lapse, and each Company RSU will be canceled in exchange for the right of the holder to receive the Common Share Consideration (less the amount of any applicable tax withholding) with respect to each Class A Share underlying such Company RSU.
Treatment of Dissenting Shares
At the Effective Time, each Dissenting Share will be canceled and cease to exist automatically and, unless otherwise required by applicable law, converted into the right to receive the Common Share Consideration. Additionally, in the event that the “fair value” of a Dissenting Share as appraised by the Bermuda Court under the Companies Act is greater than the Common Share Consideration, Dissenting Shareholders will also be entitled to receive such difference from the Surviving Company. If the “fair value” of Class A Shares as appraised by the Bermuda Court is lower than or equal to the Common Share Consideration, Dissenting Shareholder will not be entitled to receive any consideration in addition to the Common Share Consideration. Under the Voting Agreement, the Warner Parties have waived their rights of appraisal under Bermuda law with regards to the Warner Shares in connection with the Merger. See the section of this proxy statement captioned “The Merger—Dissenters’ Rights of Appraisal for Company Shareholders.”
Under the Merger Agreement, CME has agreed to give Parent (1) prompt notice of any demands received by CME for appraisal of Dissenting Shares (or withdrawals thereof) and any other written instruments or other communications received by CME relating to dissenter or appraisal rights, (2) prompt notice of, to the extent CME has knowledge thereof, any applications to the Bermuda Court for appraisal of the fair value of the Dissenting Shares and (3) to the extent permitted by applicable law, the opportunity to participate with CME in any settlement negotiations and proceedings with respect to any demands for appraisal under the Companies Act. Prior to the Effective Time, the Company will not, without the prior written consent of Parent, voluntarily make any payment with respect to any demands for appraisal, settle or compromise or offer to settle or compromise or otherwise negotiate any such demands, or waive any failure by a holder of Class A Shares to timely deliver a written demand for appraisal or any failure to timely take any other action to exercise appraisal rights in accordance with the Companies Act, or agree to do any of the foregoing.
Exchange and Payment Procedures
Prior to the closing, Parent or Merger Sub will designate a reputable international bank or trust company reasonably acceptable to the Company to act as the payment agent in connection with the Merger (the “Paying Agent”). On the closing date of the Merger, Parent or Merger Sub will deposit or cause to be deposited with the Paying Agent cash sufficient to pay the aggregate Merger Consideration to which the Company’s shareholders become entitled pursuant to the Merger Agreement.
As promptly as practicable after the Effective Time (but in no event later than three business days thereafter), the Paying Agent will mail or otherwise provide to (1) each holder of record of a certificate or certificates that immediately prior to the Effective Time represented outstanding Voting Shares (the “Certificates”) whose Voting Shares were converted pursuant to the Merger Agreement, a letter of transmittal in such form as Parent may reasonably specify and instructions for effecting the surrender of the Certificates (or an affidavit of loss in lieu of Certificates) in exchange for payment of the applicable Merger Consideration and (2) each holder of record of non-certificated Voting Shares represented by book-entry (“Book-Entry Shares”), a notice of the effectiveness of the Merger. Upon surrender of a Certificate (or an affidavit of loss in lieu of Certificates) for cancellation to the Paying Agent, together with a duly completed and validly executed letter of transmittal and such other documents as may be required pursuant to the instructions of the Paying Agent, and without any action by any holder of record of any Book-Entry Shares, the holder of such Certificate or Book-Entry Share will be entitled to receive the applicable Merger Consideration for each Voting Share

75




formerly represented by such Certificate or Book-Entry Share, as applicable. If your shares are held in “street name” through a bank, brokerage firm or other nominee, you will receive instructions from your bank, brokerage firm or other nominee as to how to effect the surrender of your “street name” shares in exchange for the consideration.
If any cash deposited with the Paying Agent is not claimed within one year following the Effective Time, the Surviving Company shall be entitled to require the Paying Agent to deliver to it any such funds, and any holder of Certificates or Book-Entry Shares who have not complied with the exchange procedures in the Merger Agreement will thereafter look only to the Surviving Company (subject to abandoned property, escheat and other similar laws) as general creditors thereof with respect to the applicable Merger Consideration payable upon due surrender of their Certificates or Book-Entry Shares and compliance with the exchange procedures set forth in the Merger Agreement, without any interest thereon. Any cash deposited with the Paying Agent that remains unclaimed until such amounts would otherwise escheat to or become property of any governmental entity will, to the fullest extent permitted by applicable law, become the property of the Surviving Company free and clear of any claims or interest of any person previously entitled thereto.
Representations and Warranties
The Merger Agreement contains representations and warranties of the Company, Parent and Merger Sub.
Some of the representations and warranties in the Merger Agreement made by the Company are qualified by, among other things, exceptions relating to the absence of a “Company Material Adverse Effect.” For purposes of the Merger Agreement, “Company Material Adverse Effect” means, with respect to the Company, any change, effect, development, circumstance, condition, state of facts, event or occurrence that, individually or in the aggregate, (i) has a material adverse effect on the financial condition, business, assets, properties, liabilities or results of operations of the Company and its subsidiaries, taken as a whole, or (ii) would prevent or materially delay or materially impair the consummation by the Company of any of the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement; provided, however, that for purposes of clause (i), none of the following will be deemed to constitute a Company Material Adverse Effect or be taken into account when determining whether a Company Material Adverse Effect has occurred or is reasonably likely to exist:
general changes in any industry or industries in which the Company or its subsidiaries operate;
general changes in legal, tax, economic, political or regulatory conditions, including any changes affecting financial, credit or capital market conditions in Europe or elsewhere in the world where the Company or its subsidiaries have material operations;
any generally applicable change in applicable law or GAAP or interpretation of any of the foregoing;
the Company’s compliance with the express terms of the Merger Agreement and any action taken or omitted to be taken by the Company at the express written direction or request of or with express written prior consent of Parent;
subject to certain exceptions, any effect resulting from the execution, announcement or pendency of the Merger Agreement and the transactions contemplated thereby (including the Merger), including any adverse change in customer, employee, supplier, financing source, licensor, licensee, sub-licensee, joint venture partner or similar relationship;

76




changes in the price or the trading volume of the Class A Shares, in and of itself (however, the effects giving rise or contributing to such changes that are not otherwise excluded from the definition of a “Company Material Adverse Effect” may be taken into account);
any failure by the Company to meet any published guidance or analyst estimates or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or the Company’s failure to meet the Company’s internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (however, the effects giving rise or contributing to such failure that are not otherwise excluded from the definition of a “Company Material Adverse Effect” may be taken into account); and
conditions arising out of acts of terrorism or sabotage, war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions or other force majeure events, including any material worsening of such conditions threatened or existing as of October 27, 2019;
provided, further that any effect set forth in the first three bullet points and the last bullet point above may be taken into account in determining whether there is, or would be reasonably expected to be, a Company Material Adverse Effect to the extent such change, effect, development, circumstance, condition, state of facts, event or occurrence materially disproportionately affects the Company and its subsidiaries relative to other similar sized participants in the industry and geographic markets in which the Company and its subsidiaries participate.
In the Merger Agreement, the Company has made customary representations and warranties to Parent and Merger Sub that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement or in the confidential disclosure letter delivered in connection therewith and by certain reports filed by the Company with the SEC. These representations and warranties relate to, among other things:
the Company’s and its subsidiaries’ due organization, existence, good standing and authority to carry on their business, and the Company’s and its subsidiaries’ organizational documents;
the Company’s capitalization, including the absence of any options, warrants, calls, preemptive rights, phantom stock, equity appreciation subscriptions or other rights, agreements, arrangements, understandings or commitments of any kind that obligate the Company or any of its subsidiaries to issue, sell or transfer any shares of capital stock or other voting securities, or obligating the Company or any of its subsidiaries to grant, extend or enter into any such rights, and the absence of any bonds, debentures, notes or other indebtedness of the Company or its subsidiaries having voting rights (or convertible into securities that have such rights);
the absence of liens on the Company’s ownership of the equity interests of its subsidiaries;
the Company’s corporate power and authority to enter into, perform its obligations under, and consummate the transactions under, the Merger Agreement, and the enforceability of the Merger Agreement against the Company;
the declaration of advisability of the Merger Agreement and the Merger by the Board of Directors and the Special Committee, and the approval of the Merger Agreement and the Merger by the Board of Directors and the Special Committee;

77




required governmental consents, approvals, notices and filings in connection with the Merger;
the absence of (i) conflicts with, or breaches of any provision of, the Company’s or its subsidiaries’ governing documents, (ii) violations of governmental orders or applicable laws by the Company or its subsidiaries and (iii) violations of, breaches of, defaults under, modifications of or creation of rights of termination, cancelation or acceleration under certain material contracts, in each case as a result of the Company entering into and performing under the Merger Agreement;
the Company’s SEC filings since January 1, 2018 and the financial statements included therein, the absence of material misstatements or omissions in such filings, and the absence of certain undisclosed liabilities;
the Company’s disclosure controls and procedures and internal controls over financial reporting;
the conduct of the Company’s business in the ordinary course since December 31, 2018, and the absence since December 31, 2018 of certain changes, effects, developments, circumstances, conditions, states of facts, events, occurrences that would have or would be reasonably expected to have a Company Material Adverse Effect (as described above);
the absence of certain legal proceedings, investigations and governmental orders pending or threatened against the Company, its subsidiaries or their directors or officers;
the Company’s and its subsidiaries’ employees and employee benefit plans;
labor matters;
certain tax matters relating to the Company and its subsidiaries;
material contracts to which the Company or its subsidiaries are a party, including the absence of any default or breach under, and compliance with, and validity and effectiveness of, such material contracts;
title to, and absence of liens on, the real property and tangible assets of the Company and its subsidiaries;
certain environmental matters relating to the Company and its subsidiaries;
certain intellectual property of the Company and its subsidiaries;
compliance by the Company and its subsidiaries with applicable laws and permits, including compliance with certain anti-corruption and trade control laws;
accuracy and truthfulness of the information contained in this proxy statement;
the Board of Directors’ and the Special Committee’s receipt of the opinion of Allen & Company;
insurance policies of the Company and its subsidiaries;

78




certain related party transactions;
the absence of any undisclosed broker’s or finder’s fees; and
the inapplicability of any anti-takeover law to the Merger and the other transactions contemplated by the Merger Agreement.
In the Merger Agreement, Parent and Merger Sub have made customary representations and warranties to the Company that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:

Parent’s and Merger Sub’s due organization, existence, good standing and authority to carry on their businesses;
Parent’s and Merger Sub’s corporate power and authority to enter into, perform their obligations under, and consummate the transactions under, the Merger Agreement, and the enforceability of the Merger Agreement against them;
required governmental consents, approvals, notices and filings in connection with the Merger;
the absence of (i) conflicts with, or breaches of any provision of, Parent’s or Merger Sub’s governing documents, (ii) violations of governmental orders or applicable laws by Parent or Merger Sub and (iii) violations of, breaches of, defaults under, modifications of or creation of rights of termination, cancelation or acceleration under certain material contracts, in each case as a result of Parent and Merger Sub entering into and performing under the Merger Agreement;
the absence of certain legal proceedings, investigations and governmental orders pending or threatened against Parent or any of its subsidiaries (including Merger Sub);
the accuracy and truthfulness of the information supplied by Parent and Merger Sub to the Company expressly for inclusion or incorporation by reference in this proxy statement;
the absence of (i) any ownership of Voting Shares by PPF, Parent, Merger Sub or any of their respective subsidiaries between October 27, 2019 and the closing date of the Merger, and (ii) any contract, other arrangement or understanding (other than the Merger Agreement or Voting Agreement) for PPF, Parent, Merger Sub and their respective subsidiaries to acquire, hold, vote or dispose of any Voting Shares between October 27, 2019 and the closing date of the Merger;

delivery by Parent to the Company of executed copies of the Debt Financing Documents and the Equity Commitment Letter, each of which is in full force and effect and is a valid and binding obligation of Parent and Merger Sub;
compliance with the terms of the Debt Financing Documents and the Equity Commitment Letter and, assuming the satisfaction of the conditions to Parent’s obligation to consummate the Merger, the aggregate net proceeds of the Financing being sufficient for the satisfaction of Parent’s and Merger Sub’s obligations under the Merger Agreement;

79




delivery by Parent to the Company of an executed copy of the Limited Guarantee of PPF, which is in full force and effect and is a valid and binding obligation of PPF, and has not been amended, withdrawn or rescinded in any respect, or breached by PPF;
the capitalization of Merger Sub and absence of any activities of Merger Sub other than pursuant to consummation of the transactions contemplated in the Merger Agreement;
the absence of any undisclosed broker’s or finder’s fees;
the absence of agreements between PPF, Parent or Merger Sub or any of their respective subsidiaries or any other person on behalf of Parent or Merger Sub or their respective affiliates, on the one hand, and the Company’s shareholders or management, on the other hand (other than the Merger Agreement, the Statutory Merger Agreement and the Voting Agreement);
solvency of the Surviving Company after consummation of the Merger and other transactions contemplated under the Merger Agreement; and
Parent’s and Merger Sub’s acknowledgement as to their independent investigation of the Company and its subsidiaries, and the absence of reliance by Parent or Merger Sub upon any representations and warranties not set forth in the Merger Agreement, including with respect to any estimates, projections, predictions, data, financial information, memoranda, presentations or other information provided by the Company.
The representations and warranties contained in the Merger Agreement will terminate at the Effective Time.
Conduct of Business Pending the Merger
Under the Merger Agreement, the Company has agreed that, subject to certain exceptions in the confidential disclosure letter delivered to Parent and Merger Sub in connection with the Merger Agreement, between October 27, 2019 and the Effective Time or the date of termination of the Merger Agreement, unless Parent gives its written consent (which consent cannot be unreasonably withheld, delayed or conditioned) or unless required by the Merger Agreement or applicable law, the Company and its subsidiaries must conduct its and their businesses in all material respects in the ordinary course of business and in compliance, in all material respects, with all applicable laws.
Further, the Company has agreed that, subject to certain exceptions in the confidential disclosure letter delivered to Parent and Merger Sub in connection with the Merger Agreement, between October 27, 2019 and the Effective Time or the date of termination of the Merger Agreement, unless Parent gives its written consent (which consent cannot be unreasonably withheld, delayed or conditioned) or unless required by the Merger Agreement or applicable law, the Company may not, and will not permit any of its subsidiaries to, take any of the following actions:
amend, authorize, or propose to amend the organizational or governing documents of the Company or any of its subsidiaries;
split, combine, subdivide, recapitalize or reclassify any shares of capital stock or other ownership interests of the Company or any of its subsidiaries;

80




declare, set aside, set a record date for, authorize or pay any dividend or other distribution payable in cash, equity, property or otherwise (or any combination thereof) with respect to Company capital stock or any capital stock or other ownership interests of any of its subsidiaries (except for any dividend or other distribution by the Company’s subsidiaries to the Company or its other subsidiaries);
directly or indirectly redeem, purchase or otherwise acquire, or offer to redeem, purchase or otherwise acquire, or modify or amend terms of, any equity interests in the Company or its subsidiaries, except (i) from holders of Company Options in full or partial payment of any exercise price and any applicable taxes payable upon exercise of such options to the extent required or permitted under the terms thereof, (ii) from holders of Company RSUs to the extent required or permitted under the terms of such Company RSUs in full or partial payment of any purchase price and any applicable taxes payable by the holder upon the lapse of restrictions on such awards, or (iii) acquisitions of equity interests by any subsidiary of the Company in another subsidiary of the Company pursuant to contractual obligations existing as of October 27, 2019;
authorize for issuance, issue, grant, sell, encumber, deliver, transfer or dispose of, or propose, agree to commit to or authorize the issuance, grant, sale, encumbrance, delivery, transfer or disposition of any equity interests in the Company or any of its subsidiaries, or grant to any person any right the value of which is based on the value of Voting Shares or other capital stock, other than the issuance of Voting Shares reserved for issuance on October 27, 2019 pursuant to the exercise of the Company Options or vesting of Company RSUs outstanding as of October 27, 2019;
acquire or agree to acquire any equity interests in any person or any business, division or assets of any person, except for any such purchases of assets in the ordinary course of business;
transfer, lease, license, sell, mortgage, pledge, covenant not to assert, abandon, allow to lapse, dispose of, or encumber any material assets or material intellectual property, other than (i) sales, leases, covenants not to assert and licenses of assets or intellectual property in the ordinary course of business, and (ii) dispositions of assets no longer used in the operation of the business;
(i) incur, create, assume or otherwise become liable for, or modify in any material respect, any long-term or short-term indebtedness, (ii) assume, guarantee, endorse or otherwise become liable or responsible for the obligations of any other person that is not a Company subsidiary or enter into any “keep well” or other agreement to maintain the financial condition of another person other than a Company subsidiary, (iii) modify in any material respect or change the material terms or extend the maturity of any indebtedness (including refinancing any existing indebtedness), (iv) make any loans, advances or capital contributions to, or investments in, any other person other than a Company subsidiary or advances to employees in the ordinary course of business, (v) cancel any indebtedness or waive any claims or rights thereunder, or (vi) create or suffer to exist any lien (other than certain permitted liens) on any of the Company’s or its subsidiaries’ assets in each case, except for (A) intercompany indebtedness, (B) indebtedness for borrowed money under the Company’s credit facilities existing as of October 27, 2019 incurred in the ordinary course of business for working capital purposes, (C) letters of credit issued in the ordinary course of business, (D) the extension, renewal or replacement of capital leases in the ordinary course on comparable terms and conditions as those capital leases existing as of October 27, 2019, (E) repayment of existing indebtedness in the ordinary course of business to the extent repayment does not require the payment of any pre-payment

81




or similar fees and (F) incurrence of indebtedness in accordance with the Company’s existing credit facility with Warner Media;
except (i) as required by the terms of any company benefit plan in effect on October 27, 2019, or (ii) to the extent necessary to comply with applicable law, (A) increase the salary or target bonus of any directors, officers, employees or consultants of the Company or its Subsidiaries other than annual increases in salary or compensation that do not exceed 4% in the aggregate, or increase in any manner the pension or other similar benefits, severance or termination pay of any of the Company’s or its subsidiaries’ directors, officers, employees or consultants; (B) become a party to, establish, amend, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, or any compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any of the Company’s or its subsidiaries’ current or former directors, officers, employees or consultants; (C) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any benefit plan; (D) grant any new awards under any benefit plan (however, the Company and its subsidiaries may offer cash awards to eligible employees having a value of annual grants that do not exceed in the aggregate 103% of the value of the total annual grant to any such employees in the immediately preceding year (without giving effect to accelerated vesting of stock-based compensation in 2018), which awards would be payable at the same times and upon substantially similar terms and conditions as Company RSUs); (E) amend or modify any outstanding award under any benefit plan; (F) enter into, amend or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization; (G) enter into any agreement or arrange for the creation of any rabbi trust or similar arrangement, other than any rabbi trust or similar arrangement contemplated by existing employment agreements or otherwise existing as of October 27, 2019; (H) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan that is required by applicable law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable law; (I) forgive any loans, or issue any loans (other than routine advances issued in the ordinary course of business) to any the Company’s or its subsidiaries’ directors, officers, contractors or employees or (J) hire or engage any new employee or consultant or terminate the employment or engagement, other than for cause, of any employee or consultant if such new employee or consultant will receive total annual compensation in excess of $200,000, with any stock-based compensation granted to any new employee or consultant to be paid in cash based on the value of such compensation (and not through the grant of equity interests) and such cash payment will be payable at the same times and upon substantially similar terms and conditions as Company RSUs;
except as set forth on the Company’s or any applicable subsidiary’s budget for the relevant period, make, authorize, enter into any commitment for or incur any capital expenditures in excess of (A) $2,000,000 with respect to certain of the Company’s subsidiaries and (B) $5 million with respect to the Company and certain of its other subsidiaries; provided, that such capital expenditures may not exceed $10 million in the aggregate with respect to the Company and its subsidiaries, taken as a whole;

82




enter into (i) any new line of business outside of (A) the business conducted by the Company and its subsidiaries as of October 27, 2019, (B) any reasonable extension of such businesses and (C) any businesses reasonably related, ancillary or complementary thereto, or (ii) any agreement or arrangement that limits or otherwise restricts the Company or its subsidiaries or any successor thereto from operating, engaging or competing in any material line of business in which such person is currently engaged or in any geographic area material to the business or operations of such person;
change any of the accounting methods used by the Company or its subsidiaries or change their fiscal year, except for such changes required by any change in GAAP or applicable law or by any governmental entity;
make any material tax election, prepare any material tax return in a manner which is inconsistent with past practices of the Company (or its subsidiary, as applicable) with respect to the treatment of items on such tax return, file any amended tax return resulting in a liability for a material amount of tax, or change any annual tax accounting period, in each case, other than in the ordinary course of business;
settle or compromise any pending or threatened litigation, audit, claim or action against the Company or any of its subsidiaries that (i) would impose on the Company or any of its subsidiaries a monetary obligation (without giving effect to insurance proceeds receivable) in excess of (A) the greater of $2 million individually or the amount reserved against such matter in the Company’s most recent publicly filed financial statements or (B) $8 million in the aggregate or (ii) involves any (A) injunctive or equitable relief that would impose material restrictions on the Company and its subsidiaries’ operations or business, taken as a whole, as conducted on October 27, 2019 or (B) admission of wrongdoing or criminal act;
(i) renew, extend, modify, amend, cancel or terminate certain material contracts, other than in the ordinary course of business, (ii) waive, release or assign (other than to affiliates of the Company) any rights under certain material contracts in a manner that would materially reduce the expected economic benefits thereof to the Company and its subsidiaries, taken as a whole, or (iii) enter into any contract which, if entered into prior to October 27, 2019, would constitute a material contract, other than contracts entered into in the ordinary course of business that have comparable terms to existing material contracts of the same type;
implement any employee layoffs or plant closings that would reasonably be expected to trigger notification requirements under applicable laws;
adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or its subsidiaries (other than the Merger);
enter into any contract (other than the Voting Agreement) with respect to the voting or registration of the Voting Shares or any Company subsidiary’s capital stock or securities; or
enter into any agreement, contract, commitment or arrangement to do any of the foregoing, or authorize, resolve or agree to do any of the foregoing.

83




The Merger Agreement does not give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company will exercise, consistent with the terms and conditions of the Merger Agreement, complete control and supervision over its operations.

84




No Solicitation
For purposes of this proxy statement and the Merger Agreement:
A “Competing Proposal” means any proposal or offer made by a person or group (other than a proposal or offer by Parent or any of its subsidiaries) at any time, in a single transaction or a series of related transactions, relating to (a) any direct or indirect acquisition of 15% or more of the net revenue, net income or assets (based on the fair market value thereof, as determined in good faith by the Board of Directors) of the Company and its subsidiaries, taken as a whole, including through the acquisition of one or more of its subsidiaries, (b) any direct or indirect acquisition of beneficial ownership, or the right to acquire beneficial ownership, or the issuance or sale or other disposition, of 15% or more of the total voting power of the equity securities of the Company (whether pursuant to an amalgamation, merger, reorganization, division, consolidation, share exchange, business combination, recapitalization or other similar transaction), (c) any tender offer or exchange offer that if consummated would result in any person or group beneficially owning 15% or more of the total voting power of the equity securities of the Company, (d) any amalgamation, merger, reorganization, division, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company or (e) any combination of the foregoing.
A “Superior Proposal” means any bona fide written Competing Proposal (which Competing Proposal did not result from any breach of the Merger Agreement by the Company or any of its subsidiaries) made by any person or group on terms that the Board of Directors determines in good faith, after consultation with the Company’s outside legal counsel and financial advisor and upon the recommendation of the Special Committee, would, if consummated, result in a transaction that is more favorable to the Company and its shareholders than the transactions contemplated by the Merger Agreement (after taking into account any legal, regulatory, financial, timing, financing and other aspects of such proposal (including the identity of the person(s) making the proposal) that the Board of Directors deems relevant and any adjustment to the terms and conditions offered in writing by Parent in response to such proposal pursuant to the Merger Agreement or otherwise) and that the Board of Directors determines is reasonably capable of being consummated in accordance with its terms, taking into account any legal, regulatory, financial, timing, financing and other aspects of such proposal (including the identity of the person(s) making the proposal) that the Board of Directors deems relevant. For purposes of the definition of “Superior Proposal,” references to “15%” in the definition of “Competing Proposal” are deemed to be references to “50%,” except that the reference to “15%” in clause (a) of the definition of “Competing Proposal” is deemed to be a reference to “90%.”
An “Intervening Event” means a material change, effect, event, circumstance, occurrence, or other matter that was not known by or reasonably foreseeable to the Board of Directors or the Special Committee on October 27, 2019 (or if known, the consequences of which were not known to the Board of Directors or the Special Committee as of October 27, 2019), which change, effect, event, circumstance, occurrence, or other matter, or any consequence thereof, becomes known to the Board of Directors or the Special Committee prior to obtaining the Requisite Shareholder Approval, except certain events and changes will not constitute or be taken into account in determining whether an Intervening Event has occurred.
From October 27, 2019 until the earlier of the termination of the Merger Agreement and the Effective Time, the Company and its subsidiaries and representatives may not, directly or indirectly:
solicit, knowingly encourage, knowingly facilitate, knowingly induce or initiate the making or submission of, any inquiry, proposal or offer that is intended, or could reasonably be expected, to constitute, result in or lead to any Competing Proposal or the announcement of a Competing Proposal;

85




enter into, continue or otherwise participate in any discussions or negotiations regarding, or provide any information with respect to, a Competing Proposal;
approve, endorse or recommend, or propose publicly to approve, endorse or recommend, a Competing Proposal or an inquiry, proposal or offer that is intended, or could reasonably be expected, to lead to a Competing Proposal; or
declare advisable, execute or enter into any letter of intent, memorandum of understanding, agreement in principle, confidentiality agreement, merger agreement, acquisition agreement, exchange agreement, joint venture agreement, partnership agreement, collaboration agreement, option agreement or other similar agreement for or with respect to a Competing Proposal.
The Company also agreed to, and to cause each of the Company Subsidiaries to, and to use reasonable best efforts to cause its and their respective representatives to, (A) immediately cease and cause to be terminated all existing discussions or negotiations with any person conducted as of the date of the Merger Agreement with respect to any Competing Proposal, (B) request the prompt return or destruction of all confidential information previously furnished by or on behalf of the Company and its subsidiaries in connection therewith, (C) terminate any access by any person (other than Parent and its affiliates) to any physical or electronic data room relating to the Company or any of its subsidiaries and (D) not terminate, waive, amend, release or modify any provision of any confidentiality or standstill agreement to which it or any of its affiliates or representatives is a party with respect to any Competing Proposal, and enforce the provisions of any such agreement; provided that, in the case of clause (D), the Company is permitted to waive, amend or modify any confidentiality or standstill agreement to the extent necessary to permit a Competing Proposal to be made confidentially to the Board of Directors if and to the extent the Board of Directors determines in good faith (after consultation with outside legal counsel and upon the recommendation thereof by the Special Committee) that the failure to so waive, amend or modify such confidentiality or standstill agreement would be inconsistent with its fiduciary duties under applicable law and the Company promptly (and in any event no later than one business day thereafter) notifies Parent thereof after taking such action.
Notwithstanding anything to the contrary contained in the Merger Agreement, if the Company receives an unsolicited, bona fide written Competing Proposal from any third party (that did not result from a breach of the non-solicitation provisions of the Merger Agreement, as summarized above) before obtaining the Requisite Shareholder Approval, the Company and its representatives may contact the party making such proposal to clarify the terms and conditions thereof. If the Board of Directors determines in good faith, after consultation with the Company’s outside legal counsel and financial advisors and upon the recommendation thereof by the Special Committee, that such Competing Proposal constitutes, or would reasonably be expected to constitute, result in or lead to a Superior Proposal, the Company and its representatives may (i) provide access to the Company’s or its subsidiaries businesses, properties, assets, books, records or information, including any non-public information, or to any personnel, to the person making the Competing Proposal if such person executes an acceptable confidentiality agreement and (ii) engage in discussions or negotiations with such person with respect to such Competing Proposal.

86




If the Company provides such information or engages in such discussions, as promptly as practicable (but in no event later than 48 hours) after taking such actions, the Company must notify Parent in writing of the determination of the Board of Directors that the Competing Proposal constitutes, or would reasonably be expected to constitute, result in or lead to a Superior Proposal, and provide Parent any material non-public information not previously provided to Parent or its representatives. The Company must also promptly (and in any event within 48 hours) after receipt of any Competing Proposal or any request for non-public information or any inquiry, offer or proposal that could reasonably be expected to constitute, result in or lead to a Competing Proposal, notify Parent in writing of the material terms and conditions of such Competing Proposal or request, inquiry, offer or proposal, and the identity of the person making such Competing Proposal. Additionally, the Company must keep Parent reasonably informed on a prompt basis (and in any event within 48 hours) of any material changes or developments in any such Competing Proposal and provide Parent with unredacted copies of such Competing Proposal, request, inquiry, offer or proposal (including all amendments or proposed amendments, schedules and exhibits thereto) relating to any such Competing Proposal, or, if not in writing, a written description of the material terms and conditions of such Competing Proposal.
The Board of Directors’ Recommendation; Change of Recommendation
As described above, and subject to the provisions described below, the Board of Directors has unanimously made the recommendation that the shareholders of the Company vote “FOR” the Merger Proposal (the “Company Board Recommendation”). Except as permitted by the terms of the Merger Agreement, as described below, the Company has agreed that the Board of Directors (or any committee thereof, including the Special Committee) will not:
withdraw, qualify, amend, or modify, or otherwise propose publicly to withdraw, qualify, change, amend, or modify, in each case in a manner adverse to Parent or Merger Sub, the Company Board Recommendation or take any public action or make any public statement inconsistent with the Company Board Recommendation;
adopt, approve, recommend, endorse or otherwise declare advisable, or publicly propose to do the foregoing with respect to, the adoption of a Competing Proposal;
fail to include the Company Board Recommendation in this proxy statement;
make any public recommendation in connection with a tender offer or exchange offer that is subject to Regulation 14D under the Exchange Act other than a recommendation in a Solicitation/Recommendation Statement on Schedule 14D-9 against such tender offer or exchange offer;
if a Competing Proposal (other than a Competing Proposal subject to Regulation 14D) has been publicly announced or disclosed, fail to recommend against such Competing Proposal or fail to reaffirm the Company Board Recommendation on or prior to the earlier of (i) ten business days after the public announcement or disclosure of such Competing Proposal and (ii) five business days prior to the Special General Meeting;
resolve, agree or propose to take any of the actions described above (each of the actions described in this bullet point and the preceding five bullet points, a “Change of Recommendation”); or
cause or authorize the Company to enter into any definitive or binding agreement relating to a Competing Proposal (other than an acceptable confidentiality agreement entered into in accordance with the Merger Agreement).

87




Furthermore, at any time before obtaining the Requisite Shareholder Approval, the Board of Directors may effect a Change of Recommendation or cause the Company to terminate the Merger Agreement (provided that the Company pays to Parent the Company Termination Fee when and as provided in the Merger Agreement) in order to enter into a definitive agreement with respect to the Superior Proposal, if (i) the Company receives a Competing Proposal that did not result from a breach of the non-solicitation restrictions contained in the Merger Agreement, as described above, and has not been withdrawn and that the Board of Directors determines in good faith (after consultation with the Company’s outside legal counsel and financial advisor and upon the recommendation thereof by the Special Committee) constitutes a Superior Proposal, (ii) the Board of Directors determines in good faith (after consultation with outside legal counsel and upon the recommendation thereof by the Special Committee) that the failure to do so would be inconsistent with its fiduciary duties under the applicable law, (iii) the Company has provided written notice of a prospective Change of Recommendation or termination to Parent at least five business days in advance, and in good faith negotiated, during such five business day period, adjustments in the terms and conditions of the Merger Agreement, the Guarantee and the documents relating to the Financing, so that the Competing Proposal would cease to constitute a Superior Proposal, and (iv) taking into account all adjustments to the terms of the Merger Agreement that may be offered in writing by Parent, the Board of Directors determines in good faith (after consultation with the Company’s outside legal counsel and financial advisor and upon the recommendation thereof by the Special Committee) that such Competing Proposal continues to constitute a Superior Proposal and (after consultation with the Company’s outside legal counsel and upon the recommendation thereof by the Special Committee) that the failure to effect a Change of Recommendation or terminate the Merger Agreement would continue to be inconsistent with its fiduciary duties under applicable law. Any amendment to the financial terms or any other material term of such Superior Proposal will require a new notice and a notice period that is the longer of two business days or the number of business days remaining in the current five business day period.
In addition, other than in connection with a Competing Proposal, at any time before obtaining the Requisite Shareholder Approval, the Board of Directors may effect a Change of Recommendation in response to an Intervening Event if (i) it determines in good faith (after consultation with outside counsel and upon the recommendation thereof by the Special Committee) that its failure to do so would be inconsistent with its fiduciary duties under applicable law; (ii) the Company has provided written notice of a prospective Change of Recommendation to Parent at least five business days in advance, and in good faith negotiated, during such five business day period, adjustments in the terms and conditions of the Merger Agreement and the documents relating to the Financing, so that the failure to make such a Change of Recommendation in response to the Intervening Event would no longer be inconsistent with the fiduciary duties of the Board of Directors under applicable law; and (iii) taking into account all adjustments to the terms of the Merger Agreement that may be offered in writing by Parent, the Board of Directors determines in good faith (after consultation with the Company’s outside counsel and upon the recommendation thereof by the Special Committee) that its failure to effect a Change of Recommendation in response to such Intervening Event would continue to be inconsistent with its fiduciary duties under applicable law.

88




Employee Benefits and Service Credit
As of the Effective time and for a period of one year thereafter, Parent or the Surviving Company will provide to each employee of the Company or its subsidiaries who continues to be employed by the Surviving Company or any of its subsidiaries (the “Continuing Employees”), (i) a base salary or regular hourly wage not less than the base salary or regular hourly wage provided to such Continuing Employee immediately prior to the Effective Time, (ii) an annual target cash bonus opportunity at levels provided to such Continuing Employee immediately prior to the Effective Time, (iii) severance benefits no less favorable than those provided under the plans, policies, contracts, or arrangements of the Company or its subsidiaries as in effect as of immediately prior to the Effective Time, and (iv) employee benefits, other than as required above in (ii) and (iii) and also excluding any equity awards, defined benefit pension and retiree medical and welfare benefits that are, in the aggregate, substantially comparable to those provided to such Continuing Employee (including their dependents) immediately prior to the Effective Time. As of the Effective Time and thereafter, Parent and the Surviving Company will provide that periods of employment with the Company or its subsidiaries will be taken into account for purposes of determining the eligibility for participation and vesting (excluding benefit accrual) of any Continuing Employee under all employee benefit plans maintained by Parent or an affiliate of Parent for the benefit of the Continuing Employees, including vacation or other paid-time-off plans or arrangements and any severance plans, but excluding defined benefit pension, retiree plans, frozen plans, and plans closed to new participants.
As of the Effective Time and thereafter, Parent and the Surviving Company will use reasonable best efforts to (i) ensure that no eligibility waiting periods, actively-at-work requirements or pre-existing condition limitations or exclusions will apply to the Continuing Employees under the applicable health and welfare benefits plan of Parent or any affiliate of Parent, including the Surviving Company (except to the extent applicable under benefit plans immediately prior to the Effective Time), (ii) waive any and all evidence of insurability requirements with respect to such Continuing Employees to the extent such evidence of insurability requirements were not applicable to the Continuing Employees under the benefits plans immediately prior to the Effective Time and (iii) credit each Continuing Employee with all deductible payments, out-of-pocket or other co-payments paid by such Continuing Employee under the health benefit plans of the Company or its subsidiaries prior to the closing date of the Merger during the year in which the closing of the Merger occurs for the purpose of determining the extent to which any such Continuing Employee has satisfied his or her deductible and whether he or she has reached the out-of-pocket maximum under any health benefit plan of Parent or an affiliate of Parent (including the Surviving Company) for such year. The Merger will not affect any Continuing Employee’s accrual of, or right to use, in accordance with the policies, contracts or arrangements of the Company or its subsidiaries as in effect immediately prior to the Effective Time, any personal, sick, vacation or other paid-time off accrued but unused by such Continuing Employee immediately prior to the Effective Time.
As of the Effective Time and thereafter, Parent and the Surviving Company will (i) assume the Company’s and its subsidiaries’ obligations under the company benefit plans, including all vested or accrued benefit obligations to, and contractual rights of the Company’s current and former employees (including any such obligations or rights arising in connection with the Merger) and (ii) honor, fulfill and discharge such obligations in accordance with their terms (including cash awards granted prior to the closing in accordance with the Merger Agreement).

89




Efforts to Close the Merger; Regulatory Filings
The Merger Agreement requires the Company, Parent and Merger Sub to use reasonable best efforts to (i) take all appropriate actions and do, or cause to be done, all things necessary, proper or advisable under any applicable law or otherwise to consummate and make effective the transactions contemplated by the Merger Agreement as promptly as practicable, but in no event later than the Outside Date and (ii) obtain from any governmental entities any permits, authorizations, consents, approvals, waiting period expirations or terminations, or orders required to be obtained or made, or avoid any action or proceeding by any governmental entity, in connection with the authorization, execution and delivery of the Merger Agreement and the consummation of the transactions contemplated by the Merger Agreement.
Without limiting the foregoing, but subject to the provisions described below, the parties have each agreed to use reasonable best efforts to (i) as promptly as reasonably practicable make or cause to be made the applications or filings required to be made under or with respect to any applicable competition laws, required competition approvals, applicable communications laws or required communications approvals in connection with the authorization, execution and delivery of the Merger Agreement and the consummation of the transactions contemplated by the Merger Agreement, (ii) comply at the earliest reasonably practicable date with any request under or with respect to any of the foregoing laws or approvals for additional information, documents or other materials received by the Company, Parent or any of its or their respective affiliates from any governmental entity in connection with such applications or filings or the transactions contemplated by the Merger Agreement, and (iii) coordinate and cooperate with, and give due consideration to all reasonable additions, deletions or changes suggested by, the other party in connection with any filing under or with respect to any applicable competition laws, required competition approvals, applicable communications laws or required communications approvals, and any filings, conferences or other submissions related to resolving any investigation or other inquiry by any applicable governmental entity in connection therewith.
Without limiting the foregoing, but subject to the provisions described below, the parties have each agreed to (i) cooperate with each other and use reasonable best efforts to take, as promptly as reasonably practicable, any and all actions necessary to avoid the entry of any injunction, order, decree, decision, determination or judgment that would delay, restrain, prevent, enjoin or otherwise prohibit consummation of the transactions contemplated by the Merger Agreement, including through the defense of litigation seeking to delay, restrain, prevent, enjoin or otherwise prohibit consummation of the transactions contemplated by the Merger Agreement and the proffer and agreement by Parent of its willingness to sell, lease, license or dispose of, or hold separate, any assets, rights, product lines, licenses or businesses or other operations of the Company or any of its subsidiaries and (ii) if any such injunction, order, decree, decision, determination or judgment is entered or issued, or becomes reasonably foreseeable, cooperate with each other and use reasonable best efforts to take, as promptly as reasonably practicable, any and all steps necessary to resist, vacate, modify, prevent, reverse, suspend, eliminate or remove such injunction, order, decree, decision, determination or judgment.

90




Notwithstanding the foregoing, subject to certain exceptions, none of Parent, Merger Sub or any of their respective affiliates, or direct or indirect equity holders (including PPF) or their respective affiliates is required (and the Company and its subsidiaries are not permitted to, without Parent’s prior written approval) take or agree to take any action, or agree or commit to any condition or restriction necessary to secure the requisite approvals and authorizations, that would (each of the following, a “Burdensome Condition”): (i) require any action by, or would impose any condition or restriction on, Parent, any of its affiliates or direct or indirect equity holders of Parent (including PPF) or their respective affiliates or any investment funds advised or managed by one or more affiliates of Parent or any direct or indirect portfolio companies thereof or any of their respective businesses, product lines or assets, (ii) require the Company, Parent, any of their respective affiliates or direct or indirect equity holders (including PPF) or their respective affiliates or any investment funds advised or managed by one or more affiliates of Parent or any direct or indirect portfolio companies thereof to propose, negotiate, agree, accept, commit to or effect, by consent decree, hold-separate or administrative order or otherwise, the sale, transfer, license, divestiture or other disposition of, or any prohibition or limitation on the ownership, operation or effective control of, any of their businesses, product lines or assets (excluding such actions that would not reasonably be expected to be material to the Company or certain of its significant subsidiaries, as applicable) or (iii) materially and adversely interfere with Parent’s or its affiliates’ ability to participate in the management, effectively control, or exercise of full rights of ownership of, the Company or materially impair the aggregate economic benefits that Parent and its affiliates reasonably expect to derive from the consummation of the transactions contemplated by the Merger Agreement.
Delisting and Deregistration of Class A Shares of CME
The Company, Parent and Merger Sub will cooperate in taking, or causing to be taken, all actions necessary to terminate the registration of the Class A Shares under the Exchange Act and to cause the Class A Shares to be de-listed from Nasdaq and the Prague Stock Exchange, in each case, effective at or after the Effective Time.
Financing
Cooperation with Debt Financing
The Merger is not subject to a financing condition. Subject to certain customary exceptions, the Company has agreed to, and has agreed to use reasonable best efforts to cause its subsidiaries and representatives to, provide to Parent such necessary or customary cooperation as reasonably requested by Parent to assist it in causing the conditions in the Debt Financing Documents to be satisfied and such customary cooperation as is otherwise reasonably necessary and reasonably requested by Parent solely in connection with satisfying such conditions, including (i) assisting with timely preparation of customary presentations, road show materials and bank syndication materials required in connection with the Debt Financing, (ii) furnishing Parent and the Lenders as promptly as practicable with all financial information regarding the Company or its subsidiaries as may be reasonably required under the Debt Financing Documents, (iii) reasonably cooperating with the Lenders to evaluate the Company’s and its subsidiaries’ current assets, cash management and accounting systems, policies and procedures relating thereto for the purpose of establishing collateral arrangements to the extent customary and reasonable, (iv) requesting customary payoff letters, lien terminations and instruments of discharge to be delivered at the closing of the Merger to allow for the payoff, discharge and termination in full of the Company Indebtedness, (v) furnishing Parent and the Lenders with all documentation and other information reasonably requested by the Lenders (in accordance with their usual practices and procedures) or required by any governmental entities with respect to the Debt Financing under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act and any applicable national or international sanctions regime, (vi) assisting in the preparation of, and executing and delivering on the closing date of the Merger, deliverables under the Debt Financing Documents relating to the Debt Financing on substantially the terms contemplated by the Debt Financing Documents and (vii) taking all

91




corporate actions, subject to and only effective upon the occurrence of the Effective Time, as may be reasonably requested by Parent to permit the satisfaction of conditions precedent to the Debt Financing.
If the Merger Agreement is terminated, Parent has agreed to reimburse the Company promptly, upon request, for all documented, reasonable out-of-pocket costs and expenses incurred by the Company and its subsidiaries and their respective representatives in connection with such cooperation, subject to certain specified exceptions. Merger Sub and Parent have also agreed, in the event the closing of the Merger does not occur to indemnify and hold harmless the Company and its affiliates and their respective representatives, on a joint and several basis, against losses suffered or incurred in connection with the Financing and certain other actions taken by the Company, subject to certain specified exceptions.
Marketing Period and Efforts
Under the Merger Agreement, the Company has agreed to allow Parent a period of 20 consecutive business days to market the Debt Financing (the “Marketing Period”). The Marketing Period will begin after (i) the Company has provided Parent with the financial and other information specified in the Merger Agreement and necessary to satisfy the requirements of the financing documents entered into in connection with the Debt Financing and (ii) certain conditions to consummation of the Merger have been satisfied and to the Company’s knowledge and Parent’s knowledge nothing would cause such conditions not to be satisfied assuming the closing were to be scheduled for any time during the 20 consecutive business day period.
The Marketing Period will be deemed not to have commenced if on or prior to the completion of such 20 consecutive business day period, any of the following events occurs (and, in each such case, the Marketing Period will restart when such event has ceased to exist):
the Company publicly announces any intention to restate any financial statements or financial information included in the financial and other information required to be provided to Parent under the Merger Agreement;
the Company’s auditors withdraw any audit opinion issued with respect to its audited financial statements for the three fiscal years most recently ended at least 90 days prior to the Effective Time;

the information provided to Parent in connection with the Debt Financing contains a material misstatement or omission or is no longer compliant in all material respects with the requirements of the SEC’s Regulation S-K and Regulation S-X for offerings of debt securities on Form S-1 (other than such provisions for which compliance is not customary in a Rule 144A offering of high-yield debt securities);
the financial statements and other financial information included in the financial and other information required to be provided to Parent under the Merger Agreement are not sufficient to permit (i) a registration statement on Form S-1 using such financial statements and financial information to be declared effective by the SEC on the business day immediately after the last day of the Marketing Period and (ii) the Parent’s debt financing sources to receive customary comfort letters from the Company’s independent auditors on the financial statements and financial information contained in offering documents required to consummate any offering of debt securities on the business day immediately after the last business day of the Marketing Period; or

the Company fails to make any required filings with the SEC within the time period required by the Exchange Act containing any financial information that is required to be contained or incorporated by reference therein.

92




Although the obligation of Parent and Merger Sub to consummate the Merger is not subject to any financing condition, the Merger Agreement provides that, without Parent’s agreement, the closing of the Merger will not occur earlier than the business day immediately following the final day of the Marketing Period.
Repayment of Company Indebtedness; Shareholder Guarantees
Parent has agreed that it will, and will cause its controlled affiliates to, take all actions reasonably necessary to cause, on the date of closing of the Merger, the repayment and satisfaction in full (including accrued interest, guarantee fees, and any prepayment fees or penalties or other amounts due as a result of or arising from such prepayment) of the Company Indebtedness. The Company has agreed that it will, and will cause its applicable subsidiaries to, arrange for customary payoff letters, lien releases and other instruments of discharge to be executed and delivered in form and substance reasonably acceptable to Parent at least four business days prior to closing of the Merger providing for the payoff, discharge and termination in full of the Company Indebtedness and the discharge of the shareholder guarantees and liens securing the same on the closing date, and will deliver prepayment and termination notices in accordance with the terms of the Company Indebtedness and take all other actions necessary to facilitate the payoff of the Company Indebtedness, the termination of the shareholder guarantees and the termination and release of all liens securing the Company Indebtedness and such shareholder guarantees.
Indemnification and Insurance
Parent has agreed to, and has agreed to cause the Surviving Company to, honor and fulfill in all respects the obligations of the Company, to the fullest extent permissible under applicable law, under the Company’s governing documents in effect as of October 27, 2019 and under any indemnification or other similar agreements in effect on such date to the Covered Persons covered under such governing documents or indemnification agreements arising out of or relating to actions or omissions in their capacity as such occurring at or prior to the Effective Time, including in connection with the approval of the Merger Agreement and the transactions contemplated thereby. Without limiting the foregoing, for a period of six years after the Effective Time, Parent has also agreed to cause the Surviving Company to undertake certain indemnification and expense advancement obligations with respect to each Covered Person. For a period of six years after the Effective Time, the memorandum of association and bye-laws of the Surviving Company must contain provisions related to indemnification, advancement of expenses and exculpation of Covered Persons no less favorable than the corresponding provisions currently contained in the Company’s governing documents.
Prior to the Effective Time, the Company is required to obtain a six-year “tail” insurance policy with a claims period of at least six years after the Effective Time from an insurance carrier with the same or better credit rating as the Company’s current insurance carrier with respect to directors’ and officers’ liability insurance and fiduciary liability insurance, with benefits and levels of coverage that are at least as favorable, in the aggregate, to the applicable Covered Person, as the Company’s existing policies with respect to matters existing or occurring at or prior to the Effective Time; provided that in no event will the Company be required to expend in the aggregate an annual premium for such policies in excess of 300% of the last annual premium paid by the Company for such insurance prior to October 27, 2019.

93




If the Company and the Surviving Company fail to obtain such “tail” insurance policies as of the Effective Time, then the Surviving Company will continue to maintain for a period of at least six years the Company’s insurance policies in place as of October 27, 2019, with benefits and levels of coverage at least as favorable, in the aggregate, as provided in such policies as of October 27, 2019, or will use reasonable best efforts to purchase comparable policies for such six-year period. In no event will Parent or the Surviving Company be required to expend in the aggregate for such policies an annual premium amount in the aggregate in excess of 300% of the last annual premium paid by the Company for such insurance prior to October 27, 2019. If the annual premium amount for such coverage exceeds such amount, the Surviving Company must obtain a policy with the greatest coverage available for a cost that does not exceed such amount.
Covered Persons have certain third party beneficiary rights under the provisions of the Merger Agreement relating to their indemnification.
Other Covenants
Shareholders Meeting
The Merger Agreement requires that, as promptly as reasonably practicable following the date of the Merger Agreement, and in any event no later than the later of (a) the tenth day after the preliminary proxy statement has been filed with the SEC, if the SEC has not informed the Company that it will review the proxy statement and (b) confirmation by the SEC that the SEC has no further comments on the proxy statement, the Company take all actions required under the Companies Act, the Company’s governing documents and the applicable Nasdaq requirements to establish a record date for, duly call and give notice of the Special General Meeting and to use its reasonable best efforts to cause the Special General Meeting to occur as soon as reasonably practicable, in each case, notwithstanding that a Change of Recommendation has been effected or the existence of a Competing Proposal.

94




Shareholder Litigation
The Merger Agreement requires the Company to promptly advise Parent in writing of any legal proceeding asserted or commenced by, on behalf of or in the name of, against or otherwise involving the Company, the Board of Directors, any committee thereof (including the Special Committee), or any of the Company’s directors or officers related to the Merger Agreement, the Merger or the other transactions contemplated by the Merger Agreement, and keep Parent informed on a reasonably prompt basis regarding the same. The Company is required to give Parent the opportunity to (i) participate in the defense, settlement or prosecution of any such legal proceeding and (ii) consult with the Company’s counsel regarding the defense, settlement or prosecution of any such legal proceeding (however, Parent is not entitled to control the defense, settlement or prosecution of any such legal proceeding). The Company may not settle or compromise or agree to settle or compromise any such legal proceeding without Parent’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed).
Conditions to the Closing of the Merger
The respective obligations of the Company, Parent and Merger Sub to effect the Merger are subject to the satisfaction or, to the extent permitted by applicable law, waiver, of the following conditions (the “General Closing Conditions”):
approval of the Merger, the Merger Agreement and the Statutory Merger Agreement by at least 75% of the votes cast by the holders of Voting Shares, voting together as a single class, that are present in person or by proxy at the Special General Meeting, at which a quorum of shareholders of the Company holding a majority of the votes represented by the Voting Shares has been formed;
the absence of any statute, rule or regulation that prohibits or makes illegal the consummation of the Merger, and the absence of any order or injunction of a court of competent jurisdiction pending or in effect that enjoins, restrains or prevents the consummation of the Merger or any of the transactions contemplated by the Merger Agreement or makes illegal the transactions contemplated by the Merger Agreement (the “No Law/Order Condition”); and
the filing, occurrence or obtaining of certain required competition approvals and required communications approvals, and such approvals being in full force and effect without the imposition of a Burdensome Condition (the “Regulatory Approval Condition”).
The obligations of Parent and Merger Sub to effect the Merger are also subject to the satisfaction (or waiver in writing by Parent) on or prior to the closing date of the Merger of the following additional conditions (the “Company Closing Conditions”):
the representations and warranties of the Company regarding organization and qualification, its subsidiaries, authority to enter into the Merger Agreement, approval from the Board of Directors, absence of a Company Material Adverse Effect from December 31, 2018 to October 27, 2019, broker fees due in connection with the Merger or the Merger Agreement, and takeover statutes applicable to the Merger, in each case being true and correct in all material respects, as of October 27, 2019 and as of the closing of the Merger (except that representations and warranties that by their terms speak specifically as of October 27, 2019, or another date, must be true and correct as of such date);

95




certain elements of the representations and warranties of the Company regarding its and its subsidiaries’ capitalization being true and correct in all respects as of October 27, 2019, and as of the closing of the Merger (except that representations and warranties that by their terms speak specifically as of October 27, 2019, or another date, must be true and correct as of such date), except for de minimis inaccuracies;
the other representations and warranties of the Company set forth in the Merger Agreement being true and correct (without giving effect to any qualification as to materiality or Company Material Adverse Effect contained therein) as of October 27, 2019, and as of the closing of the Merger (except that representations and warranties that by their terms speak specifically as of October 27, 2019, or another date, must be true and correct as of such date), except where any failures of any such representations and warranties to be true and correct would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect;
the Company having performed or complied in all material respects with its obligations under the Merger Agreement at or prior to the Effective Time;
no change, effect, occurrence, development, circumstance, condition, state of facts or event having occurred since October 27, 2019, that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect; and
Parent’s receipt of a certificate signed by the Company’s co-chief executive officers or chief financial officer to the effect that the Company has satisfied its obligations with respect to the conditions listed immediately above.
The obligations of the Company to effect the Merger are also subject to the satisfaction (or waiver in writing by the Company) on or prior to the closing date of the Merger of the following additional conditions (the “Parent Closing Conditions”):
all of the representations and warranties of Parent and Merger Sub being true and correct (without giving effect to any qualification as to materiality contained therein) as of October 27, 2019, and as of the closing of the Merger (except that representations and warranties that by their terms speak specifically as of October 27, 2019, or another date, must be true and correct as of such date), except where any failures of any such representations and warranties to be true and correct would not reasonably be expected, individually or in the aggregate, to prevent, materially impede or materially delay consummation by Parent or Merger Sub of the transactions contemplated by the Merger Agreement;
each of Parent and Merger Sub having performed or complied (i) in all respects with its obligations relating to the payoff of the Company Indebtedness required to be performed or complied with at or prior to the closing of the Merger and (ii) in all material respects with its other obligations under the Merger Agreement required to be performed or complied with at or prior to the Effective Time; and
the Company’s receipt of a certificate signed by an executive officer of Parent to the effect that Parent and Merger Sub have satisfied their obligations with respect to the conditions listed immediately above.

96




Termination of the Merger Agreement
The Company and Parent may, by mutual written agreement, terminate the Merger Agreement and abandon the Merger at any time prior to the Effective Time, whether before or after the adoption of the Merger Agreement by the Company’s shareholders.
The Merger Agreement may also be terminated and the Merger abandoned, whether before or after the adoption of the Merger Agreement by the Company’s shareholders, as follows:
by either Parent or the Company, if:
o
the Effective Time has not occurred by 11:59 p.m. Bermuda time on the Outside Date; provided, however, that this termination right will not be available to a party whose breach of any representation, warranty, covenant or agreement set forth in the Merger Agreement has been the primary cause of, or primarily resulted in, the Effective Time not occurring prior to the Outside Date (an “Outside Date Termination”);
o
a governmental entity of competent jurisdiction has issued a final, non-appealable order, decree or ruling permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger or the other transactions contemplated by the Merger Agreement; provided, however, that this termination right will not be available to a party if any action of such party or the failure of such party to perform any of its obligations under the Merger Agreement required to be performed at or prior to the Effective Time has been the primary cause of, or primarily resulted in, the issuance of the order, decree or ruling (a “Governmental Order Termination”); or
o
the Requisite Shareholder Approval is not obtained at the Special General Meeting or at any adjournment or postponement thereof, in each case at which a vote on such adoption is taken (a “Shareholder Approval Failure Termination”);
by the Company, if:
o
prior to the Effective Time, Parent or Merger Sub has breached any of its representations, warranties, covenants or agreements in the Merger Agreement, and such breach would reasonably be expected to prevent, or materially impair or delay, the ability of either Parent or Merger Sub to perform its obligations under the Merger Agreement, or to consummate the Merger and the other transactions contemplated by the Merger Agreement and such breach is not curable prior to the Outside Date, or if curable prior to the Outside Date, has not been cured within the earlier of 30 calendar days after the receipt of notice thereof from the Company or three business days before the Outside Date; provided, however, that this termination right will not be available to the Company if it is then in material breach of any of its representations, warranties, covenants or agreements in the Merger Agreement (a “Parent Breach Termination”);

97




o
prior to the adoption of the Merger Agreement by the Requisite Shareholder Approval, in order to enter into a definitive agreement with respect to a Superior Proposal, subject to the terms and conditions of the Merger Agreement, including the payment of the Company Termination Fee prior to or concurrently with such termination (as described in “The Merger Agreement—Termination Fees” below) (a “Superior Proposal Termination”); or
o
(1) all the conditions to the obligations of Parent and Merger Sub under the Merger Agreement have been satisfied (other than any condition that, by its nature, is to be satisfied at the closing, but which would be satisfied if the closing date of the Merger were the date of such termination, or that has not been satisfied as a result of Parent or Merger Sub’s breach or failure to perform any of their respective covenants in this Agreement), (2) Parent and Merger Sub fail to consummate the closing of the Merger by the date on which the closing is required to have occurred pursuant to the Merger Agreement, (3) the Company has confirmed by written notice to Parent at least three business days prior to such termination that all the conditions to obligations of the Company under the Merger Agreement have been satisfied (other than any condition that, by its nature, is to be satisfied at the closing, but which would be satisfied if the closing date were the date of such termination) or that the Company is willing to waive any unsatisfied Parent Closing Conditions, (4) during the three business day period described above, the Company stands ready, willing and able to consummate the closing and (5) Parent or Merger Sub fails to consummate the closing within three business days after the delivery of such notice by the Company (a “Closing Failure Termination”).
by Parent, if:
o
prior to the Effective Time, the Company has breached any of its representations, warranties, covenants or agreements in the Merger Agreement, and such breach will result in the General Closing Conditions or the Company Closing Conditions not being satisfied and such breach is not curable prior to the Outside Date, or if curable prior to the Outside Date, has not been cured within the earlier of 30 calendar days after the receipt of notice thereof from Parent or three business days before the Outside Date; provided, however, that this termination right will not be available if Parent or Merger Sub is then in material breach of any of their representations, warranties, covenants or agreements in the Merger Agreement (a “Company Breach Termination”); or
o
prior to the adoption of the Merger Agreement by the Requisite Shareholder Approval, the Board of Directors has effected a Change of Recommendation (a “Change of Recommendation Termination”).
Termination Fees
Parent will be entitled to receive the Company Termination Fee of $50 million from the Company if:
Parent effects a Change of Recommendation Termination, or the Company or Parent effects an Outside Date Termination or Shareholder Approval Failure Termination at a time when Parent would have been entitled to effect a Change of Recommendation Termination;

98




the Company effects a Superior Proposal Termination; or
(1) Parent or the Company effects an Outside Date Termination or a Shareholder Approval Failure Termination, or Parent effects a Company Breach Termination, (2) in the case of an Outside Date Termination or a Company Breach Termination, any person has made to the Board of Directors, or shall have made, disclosed or otherwise communicated or made known, a Competing Proposal after October 27, 2019 and prior to such termination and such Competing Proposal has not been withdrawn prior to such termination, or, in the case of a Shareholder Approval Failure Termination, any person has publicly made, disclosed or otherwise publicly communicated or made known, a Competing Proposal after October 27, 2019 and prior to such termination and such Competing Proposal has not been publicly withdrawn prior to such termination and (3) within 12 months following the date of such termination, the Company shall have entered into a definitive agreement with respect to any Competing Proposal or consummated a transaction contemplated by any Competing Proposal; provided that for purposes of this paragraph, each reference to “15%” in the definition of “Competing Proposal” is deemed to be a reference to “50%,” except that the reference to “15%” in clause (a) of such definition is deemed to be a reference to “90%.”
The Company will be entitled to receive the Parent Termination Fee of $50 million from Parent if:
Parent or the Company effects an Outside Date Termination and, at or prior to the time of such termination, either the No Law/Order Condition or the Regulatory Approval Condition has not been satisfied;
Parent or the Company effects a Governmental Order Termination;
the Company effects a Parent Breach Termination or a Closing Failure Termination; or
Parent or the Company effects an Outside Date Termination at a time when the Company would have been entitled to effect a Parent Breach Termination or a Closing Failure Termination.
Remedies
The parties have agreed that neither the Company Termination Fee nor the Parent Termination Fee is a penalty, but rather a fee payable upon termination of the Merger Agreement, which has been calculated as a reasonable amount to compensate the Company or Parent, as applicable, in the circumstances in which such termination fee is due and payable for the efforts and resources expended and opportunities foregone by such compensated party while negotiating the Merger Agreement and in reliance on the Merger Agreement and on the expectation of the consummation of the transactions contemplated thereby, which amount would otherwise be impossible to calculate with precision.

99




Notwithstanding anything to the contrary in the Merger Agreement (except as described in the next sentence), the right to receive payment of the Company Termination Fee or the Parent Termination Fee (together with certain costs and expenses) from the Company or Parent will be the sole and exclusive remedy of the other party and its related parties (including, in the case of Parent, the Lenders under the Debt Financing and their related parties) for any cost, expense, loss or damage suffered as a result of, or arising from or otherwise in connection with (1) the Merger Agreement or any other ancillary documents executed in connection with the Merger, (2) the failure of the Merger and other transactions contemplated in the Merger Agreement to be consummated, (3) any breach (or threatened or alleged breach) of, or failure (or threatened or alleged failure) to perform under, the Merger Agreement or any of the other documents delivered or executed in connection with the Merger Agreement, or (4) any oral representation made or alleged to have been made in connection with the Merger Agreement. Upon the payment of the Company Termination Fee or the Parent Termination Fee (and, in the case of Parent, satisfaction of its reimbursement obligations set forth in the Merger Agreement), as applicable, none of the Company or any of its related parties, or Parent or any of its related parties (including the Lenders under the Debt Financing and their related parties), as applicable, will have any further liability or obligation relating to or arising out of the Merger Agreement or the Merger. However, termination of the Merger Agreement will not relieve the Company of liability under the Merger Agreement resulting from its actual and intentional fraud or for any willful breach of any of its representations, warranties, covenants or agreements in the Merger Agreement prior to such termination, up to a cap of (1) $5 million in the case of any actual and intentional fraud or willful breach of the Company’s covenants relating to the conduct of its business between the date of execution of the Merger Agreement and the date of closing of the Merger or (2) $50 million in all other cases. Under no circumstances will the Company be liable for both the damages described in the immediately preceding sentence and payment of the Company Termination Fee.
The limitations above, however, do not limit the right of a party to bring or maintain a legal proceeding (i) for an injunction, specific performance or other equitable relief to the extent otherwise permitted in the Merger Agreement, unless and until the Merger Agreement has been terminated and the applicable termination fee has been paid to such party in accordance with the Merger Agreement and (ii) against the other parties to the Merger Agreement or their affiliates arising out of or in connection with a breach of the confidentiality agreement between the Company and Parent. Under no circumstances will a party be entitled to receive both a grant of specific performance and the applicable termination fee (if payable to such party).
Specific Performance
The parties have agreed in the Merger Agreement that irreparable damage would occur in the event that the parties do not perform the provisions of the Merger Agreement in accordance with its specified terms or otherwise breach such provisions. The parties have agreed that, subject to certain specified limitations in the Merger Agreement, prior to the termination of the Merger Agreement, they will be entitled, in addition to any other remedy to which they are entitled at law or in equity, to an injunction or injunctions to prevent breaches (or threatened breaches) of the Merger Agreement, the Limited Guarantee and, subject to certain exceptions described below, the Equity Commitment Letter and Parent’s and Merger Sub’s obligation to enforce the terms of the Debt Financing Documents, in each case by any other party thereto, and to specifically enforce the terms and provisions of the Merger Agreement or such other documents.

100




Notwithstanding the foregoing, the Company’s right to an injunction, specific performance or other equitable remedy in connection with enforcing Parent’s and Merger Sub’s obligation to cause the Equity Financing to be funded to fund the transactions contemplated by the Merger Agreement will be subject to the requirements that (1) all of the General Closing Conditions and Company Closing Conditions would have been satisfied as of the time the closing should have occurred in accordance with the terms of the Merger Agreement, (2) the Debt Financing (or any alternative financing) has been or will be funded in accordance with the terms thereof, (3) the Company has confirmed in writing to Parent that all General Closing Conditions and Parent Closing Conditions have been satisfied or waived and, if specific performance is granted and the Equity Financing and Debt Financing are funded, the closing will occur and (4) Parent and Merger Sub have failed to consummate the closing by the date the closing is required to occur pursuant to the terms of the Merger Agreement.
Notwithstanding the foregoing, the Company’s right to an injunction, specific performance or other equitable remedies in connection with enforcing Parent’s and Merger Sub’s obligation to enforce the terms of the Debt Financing Documents (including any alternative financing) will be subject to the requirements that (1) all of the General Closing Conditions and Company Closing Conditions have been satisfied and Parent and Merger Sub fail to consummate the closing as required under the terms of the Merger Agreement and (2) all of the conditions to the consummation of the financing provided by the Debt Financing Documents (including any alternative financing that has been obtained) have been satisfied.
Fees and Expenses
All expenses incurred in connection with the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement will be paid by the party incurring such expenses, except that Parent has agreed to pay, whether or not the Merger or any other transaction contemplated by the Merger Agreement is consummated, and all filing fees incurred in connection with any filing in connection with the governmental approvals required to satisfy the Regulatory Approval Condition.
Amendment
The Merger Agreement may be amended by the parties in writing at any time before or after receipt of the Requisite Shareholder Approval; provided, however, that after receipt of the Requisite Shareholder Approval, no amendment that requires further approval by such shareholders under applicable law may be made without obtaining such further approval. Certain provisions related to the debt financing sources in the Merger Agreement may not be amended, modified or altered in a manner that is materially adverse to any debt financing source without the prior written consent of such debt financing source.

101




Governing Law
The Merger Agreement and any claims or disputes arising out of or relating to the Merger Agreement are governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any conflict of laws principles that would cause the application of the laws any other state or jurisdiction, except that matters involving (1) the implementation of the Merger in accordance with the Companies Act or appraisal proceedings thereunder, (2) any action asserting a claim for breach of a fiduciary duty owed by any director, officer, employee or agent of the Company to the Company or its shareholders, (3) any action asserting a claim arising pursuant the Companies Act or the Company’s governing documents, or (4) any action asserting a claim governed by the internal affairs doctrine, in each case, will be governed by the laws of Bermuda. However, any claim, controversy, dispute or cause of action of any kind of nature involving a Lender, agent or underwriter under the Debt Financing Documents or any affiliate or representative of such person that is in any way related to the Merger Agreement, the Merger or any of the other transactions contemplated by the Merger Agreement, will be governed by, and construed in accordance with, the Laws of England and Wales, without regard to the conflict of laws provisions thereof that would cause the laws of another jurisdiction to apply.

102




PROPOSAL 1: APPROVAL OF THE MERGER AGREEMENT, THE STATUTORY MERGER AGREEMENT AND THE MERGER
In this proposal, CME is asking for approval of the Merger Agreement, the Statutory Merger Agreement and the Merger. Approval of this proposal is a condition to consummation of the Merger. The Board of Directors, after considering, in consultation with CME’s management and financial and legal advisors, the various factors more fully described in the section of this proxy statement captioned “The Merger—Recommendation of the Special Committee and the Board of Directors and Reasons for the Merger” and upon the recommendation of the Special Committee, has unanimously: (1) determined that the Common Share Consideration for each Class A Share constitutes fair value in accordance with the Companies Act; (2) determined that the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger, on the terms and subject to the conditions set forth therein, are advisable to, and in the best interests of, CME and its shareholders; (3) approved the execution, delivery and performance of the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the Merger; (4) resolved that the Merger Agreement and the Statutory Merger Agreement be submitted to the shareholders of CME at the Special General Meeting for their adoption and approval; and (5) subject to the non-solicitation terms of the Merger Agreement, resolved to recommend that the shareholders of CME vote in favor of the adoption of the Merger, the Merger Agreement and the Statutory Merger Agreement.
A vote of at least 75% of the votes cast by the holders of Voting Shares present in person or represented by proxy at the Special General Meeting, voting together as a single class, is required to approve the Merger Proposal, provided a quorum is present.
The Board of Directors, taking into consideration, among other things, the recommendation of the Special Committee, unanimously recommends that you vote “FOR” the Merger Proposal.

103




PROPOSAL 2: APPROVAL OF THE COMPENSATION ADVISORY PROPOSAL
In accordance with Rule 14a-21(c) under the Exchange Act, shareholders have the opportunity to cast an advisory (non-binding) vote to approve the compensation payments that will or may be made to the named executive officers of CME in connection with the Merger. This proposal, commonly known as a “say-on golden parachute” proposal and referred to in this proxy statement as the “Compensation Advisory Proposal,” gives shareholders the opportunity to cast an advisory (non-binding) vote on the “golden parachute” compensation payments that will or may be paid to the named executive officers of CME in connection with the Merger.
The “golden parachute” compensation that CME’s named executive officers may be entitled to receive from CME in connection with the Merger is summarized in the table that appears in the section of this proxy statement captioned “The Merger—Interests of CME’s Directors and Executive Officers in the Merger—Payments Upon Termination At or Following a Change in Control.” Such summary, in table form, includes all compensation and benefits that may or will be paid by CME to its named executive officers in connection with the Merger.
The Board of Directors, taking into consideration, among other things, the recommendation of the Special Committee, unanimously recommends that the shareholders of the Company approve the following resolution:
“RESOLVED, that the shareholders approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to CME’s named executive officers in connection with the Merger, as disclosed pursuant to Item 402(t) of Regulation S-K in the Payments Upon Termination At or Following a Change in Control table and the related narrative disclosures.”
The approval of the Compensation Advisory Proposal requires a simple majority of the votes cast by the holders of Class A Shares and the holder of the Series A Preferred Share, voting together a as a single class, provided that a quorum is present. Because the vote on the Compensation Advisory Proposal is advisory only, it will not be binding on either Parent or CME.
Approval of the Compensation Advisory Proposal is not a condition to consummation of the Merger, and the vote is advisory only. Accordingly, if the Merger Proposal is approved and the Merger is consummated, the compensation payments that are contractually required to be paid by CME to its named executive officers will become payable, to the extent payable in accordance with the terms of the compensation arrangements, regardless of the outcome of the vote on the Compensation Advisory Proposal.
The Board of Directors, taking into consideration, among other things, the recommendation of the Special Committee, unanimously recommends that you vote “FOR” this proposal.

104




PROPOSAL 3: ADJOURNMENT OF THE SPECIAL GENERAL MEETING
In this proposal, CME is asking for an approval of a proposal to adjourn the Special General Meeting to a later date or dates, if necessary or appropriate to solicit additional proxies if there are insufficient votes to approve the Merger Proposal at the time of the Special General Meeting, provided that a quorum is present. If shareholders approve the Adjournment Proposal, CME could adjourn the Special General Meeting and any adjourned session of the Special General Meeting and use the additional time to solicit additional proxies, including solicitation of proxies from shareholders that have previously returned properly executed proxies voting against approval of the Merger Proposal. Among other things, approval of the Adjournment Proposal could mean that, even if CME had received proxies representing a sufficient number of votes against approval of the Merger Proposal such that the proposal would be defeated, CME could adjourn the Special General Meeting without a vote on the approval of the Merger Proposal and seek to convince the holders of those shares to change their votes to votes in favor of approval of the Merger Proposal. Additionally, if a quorum is not present within half an hour from the time appointed for the Special General Meeting, the Special General Meeting will, pursuant to the Company’s bye-laws, stand adjourned to the same day one week later, at the same time and place or to such time and place as the Board of Directors may determine. If at such adjourned meeting a quorum is not present within half an hour from the time appointed for holding the meeting, the meeting will be dissolved.
Approval of the proposal to adjourn the Special General Meeting requires a simple majority of the votes cast by the holders of Class A Shares and the holder of the Series A Preferred Share at the Special General Meeting, voting together as a single class, provided that a quorum is present. The holder of the Series B Preferred Shares is not entitled to vote on this proposal.
The Board of Directors, taking into consideration, among other things, the recommendation of the Special Committee, unanimously recommends that you vote “FOR” this proposal.

105




SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of January 3, 2020 with respect to the beneficial ownership of shares of CME’s outstanding voting securities of (i) each of its named executive officers, (ii) each director, (iii) all directors and executive officers as a group and (iv) each shareholder known by CME to beneficially own more than 5% of any class of its outstanding voting securities. CME’s outstanding voting securities for purposes all the proposals described in this proxy statement are comprised of 253,607,026 Class A Shares and the Series A Preferred Share, which is entitled to one vote for each of the 11,211,449 Class A Shares into which it is convertible as of the foregoing date. CME’s other outstanding equity securities are the 200,000 Series B Preferred Shares, which are non-voting except for the purposes of the Merger Proposal and certain limited circumstances, and which are convertible into 111,136,877 Class A Shares at the option of TWBV. All of the outstanding Series A Preferred Share and Series B Preferred Shares are directly held by TWBV. See Note 2 and Note 11 below for additional information regarding the Series A Preferred Share and Series B Preferred Shares. CME’s other authorized class of equity securities is Class B Common Stock, par value $0.08 per share, of which there are no shares outstanding.
In computing the number and percentage of shares owned by each shareholder, CME has included any Class A Shares that could be acquired within 60 days of January 3, 2020 by the exercise of Company Options, the vesting of Company RSUs or the conversion of Series B Preferred Shares. These shares, however, are not counted in computing the percentage ownership of any other shareholder. Except as otherwise noted, each of the shareholders identified in the table has sole voting and investment power over the shares beneficially owned by such shareholder.
 
Beneficial Ownership
Name of Beneficial Owner
Class A Common Stock
Options and RSUs (1)
Series B Preferred Stock (2)
% Ownership
John K. Billock(3)
181,614



*

Peter Knag




Alfred Langer(4)
196,322



*

Parm Sandhu (5)
313,782



*

Kelli Turner (6)
196,491



*

Trey Turner (Theodore McKinley Turner III)




 
 
 
 
 
Michael Del Nin (7)
803,810

596,420


*

Christoph Mainusch (8)
815,453

596,420


*

David Sturgeon (9)
431,258

238,568


*

Daniel Penn (10)
356,463

298,210


*

 
 
 
 
 
All directors and executive officers as a group (10 persons)
3,295,193

1,729,618


1.97
%
 
 
 
 
 
AT&T Inc.(11)
162,334,771


111,136,877

74.98
%
Warner Media, LLC (formerly Time Warner Inc.) (11)
162,334,771


111,136,877

74.98
%
TW Media Holdings LLC (11)
162,334,771


111,136,877

74.98
%
Time Warner Media Holdings B.V.(11)
162,334,771


111,136,877

74.98
%


106




*    Less than 1.0%.
(1)
Includes Class A Shares underlying exercisable Company Options or vested Company RSUs and Company Options or Company RSUs that will become exercisable or vest within 60 days of January 3, 2020.
(2)
Represents the number of Class A Shares into which the 200,000 outstanding Series B Preferred Shares are convertible. For additional information on Series B Preferred Shares, see Note 12 to CME’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018.
(3)
Does not include 58,220 Class A Shares underlying unvested Company RSUs.
(4)
Does not include 50,343 Class A Shares underlying unvested Company RSUs.
(5)
Represents shares beneficially owned by Mr. Sandhu which are held in a family trust. Does not include 53,768 Class A Shares underlying unvested Company RSUs or non-exercisable Company Options.
(6)
Does not include 52,055 Class A Shares underlying unvested Company RSUs.
(7)
Does not include 702,119 Class A Shares underlying unvested Company RSUs or non-exercisable Company Options.
(8)
Does not include 702,119 Class A Shares underlying unvested Company RSUs or non-exercisable Company Options.
(9)
Does not include 255,701 Class A Shares underlying unvested Company RSUs or non-exercisable Company Options.
(10)
Does not include 319,519 Class A Shares underlying unvested Company RSUs or non-exercisable Company Options.
(11)
Information (other than percentage ownership) for AT&T, Warner Media, TW Media Holdings LLC (“TWMH”) and TWBV is based upon a statement on Schedule 13D/A filed jointly by them on October 28, 2019. The address of AT&T, a Delaware corporation, is 208 S.Akard St., Dallas, Texas 75202. The address of each of Warner Media, a Delaware limited liability company, and TWMH, a Delaware limited liability company, is One Time Warner Center, New York, New York 10019. The address of TWBV, a private limited liability company organized under the laws of The Netherlands, is Naritaweg 237, 1043CB Amsterdam, The Netherlands. AT&T owns directly and indirectly all of the equity interests of Warner Media. Warner Media owns directly and indirectly all of the equity interests of TWMH and TWMH owns directly all of the equity interests of TWBV. AT&T, Warner Media, TWBV and TWMH beneficially own the Series A Preferred Share and 200,000 Series B Preferred Shares, both of which are directly held by TWBV. TWBV as the direct holder of the Series A Preferred Share is entitled to one vote per each of 11,211,449 Class A Shares into which it is convertible. Pursuant to the terms of the Certificate of Designation of the Series A Preferred Share, the underlying Class A Shares were not included in the calculations of ownership percentages set forth in the table above. For additional information on the Series A Preferred Share, see Note 13 to CME’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018.
On April 25, 2018, Warner Media and TWBV exercised outstanding warrants to purchase 100,926,996 Class A Shares (which shares are included in the Class A Common Stock ownership in the table above). At the time of the exercise of these warrants, Warner Media and TWBV each undertook for a period of at least two years to transfer the right to vote these 100,926,996 Class A Shares at general meetings of the Company to the independent directors of the Company and issued standing proxies to the independent directors authorizing them to vote such shares in proportion to votes otherwise cast on all matters at a general meeting (other than at any meeting where the agenda includes a Change of Control Event (as defined in the 2019 Proxies referred to below). Because these initial standing proxies had a twelve-month term, each of Warner Media and TWBV issued a replacement proxy identical to the initial standing proxy on April 25, 2019 (the “2019 Proxies”). In addition, each of Warner Media and TWBV has the option of issuing a third proxy identical to the initial standing proxy following the expiration of the twelve-month term of the replacement proxy; and Warner Media and TWBV have agreed not to revoke the proxies prior to their expiration dates. These standing proxies do not apply to any general meeting that has been convened to vote on, among other matters, a Change of Control Event, including the Merger. Accordingly, Warner Media and TWBV will retain their ability to vote the Class A Shares covered by the 2019 Proxies at any such general meeting, including the Special General Meeting.
FUTURE SHAREHOLDER PROPOSALS
If the Merger is completed, CME will have no public shareholders, and there will be no public participation in any future meetings of shareholders of CME. However, if the Merger is not completed, shareholders will continue to be entitled to attend and participate in shareholder meetings. CME will hold the annual general meeting of its shareholders in 2020 only if the Merger has not been completed by the date of such meeting.

107




Proposals of shareholders, including any nomination of a person for election as a director, that are intended to be considered at CME’s annual general meeting of shareholders in 2020 (if held) must be received by CME at its principal executive offices at O’Hara House, 3 Bermudiana Road, Hamilton H08, Bermuda, Attention: Secretary, by not less than one hundred and twenty (120) days prior to the anniversary date of the proxy statement prepared and distributed in connection with the 2019 Annual General Meeting (i.e., by December 11, 2019), and must satisfy the conditions established in CME’s bye-laws for shareholder proposals. If such proposals are intended for inclusion in CME’s proxy statement relating to such annual general meeting (if held), such proposals must also satisfy the conditions established by the SEC, including, but not limited to, Rule 14a-8 promulgated under the Exchange Act.

WHERE YOU CAN FIND MORE INFORMATION
The SEC allows CME to “incorporate by reference” information into this proxy statement, which means that CME can disclose important information to you by referring you to other documents filed separately with the SEC. The information incorporated by reference is deemed to be part of this proxy statement, except for any information superseded by information in this proxy statement or incorporated by reference subsequent to the date of this proxy statement. This proxy statement incorporates by reference the documents set forth below that CME has previously filed with the SEC. These documents contain important information about CME and its financial condition and are incorporated by reference into this proxy statement.
The following CME filings with the SEC are incorporated by reference:
CME’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed on February 6, 2019;
CME’s Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2019, filed on April 30, 2019, June 30, 2019, filed on July 23, 2019, and September 30, 2019, filed on October 17, 2019; and
CME’s Current Reports on Form 8-K, filed on January 18, 2019 (Items 1.02, 8.01 and 9.01), February 6, 2019 (Item 9.01), March 22, 2019 (Item 5.02), March 25, 2019 (Item 9.01), April 30, 2019 (Item 9.01), May 21, 2019 (Item 5.07), July 23, 2019 (Item 9.01), September 18, 2019 (Item 5.02), October 17, 2019 (Item 9.01), October 28, 2019 (Items 1.01, 5.02, 8.01 and 9.01), and December 6, 2019 (Items 5.02 and 9.01).
CME also incorporates by reference into this proxy statement additional documents that it may file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this proxy statement and the earlier of the date of the Special General Meeting or the termination of the Merger Agreement. These documents include periodic reports, such as Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, as well as Current Reports on Form 8-K and proxy soliciting materials. The information provided on, or hyperlinked or otherwise connected to, CME’s website is not, and shall not be deemed to be, part of this proxy statement, and therefore is not incorporated by reference herein. Nothing in this proxy statement shall be deemed to incorporate information furnished but not filed with the SEC.

108




Any reports, statements or other information that CME files with the SEC are available to the public from commercial document retrieval services and at www.sec.gov. You may obtain any of the documents CME files with the SEC, without charge (excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference into those documents), by requesting them in writing from CME at the following address:
Central European Media Enterprises Ltd.
Attention: Corporate Secretary
c/o CME Media Services
Krizineckeo nam. 1078/5
15200 Prague 5, Czech Republic

If you request any documents from CME, CME will mail them to you by first class mail, or another equally prompt method, within one business day after CME receive your request. Please note that all of CME’s documents that it files with the SEC are also available in the “SEC and PSE Filings” section of CME’s website at https://www.cetv-net.com/investors. The information included on CME’s website is not incorporated by reference into this proxy statement. If you would like additional copies of this proxy statement or need help voting your shares, please contact CME’s proxy solicitor:
Georgeson LLC
1290 Avenue of the Americas, 9
th Floor
New York, New York 10104
Toll free number: +1 (866) 296-5716
Email: centraleuropeanmedia@georgeson.com
MISCELLANEOUS
CME has supplied all information relating to CME, and Parent has supplied, and CME has not independently verified, all of the information relating to Parent and Merger Sub contained in this proxy statement.
You should rely only on the information contained in this proxy statement, its annexes, including, but not limited to, the Merger Agreement and the Statutory Merger Agreement, along with all of the documents incorporated by reference into this proxy statement, in voting on the proposals set forth in this proxy statement. CME has not authorized anyone to provide you with information that is different from what is contained in this proxy statement. This proxy statement is dated January 10, 2020. You should not assume that the information contained in this proxy statement is accurate as of any date other than that date (or as of an earlier date if so indicated in this proxy statement), and the mailing of this proxy statement to shareholders does not create any implication to the contrary. This proxy statement does not constitute a solicitation of a proxy in any jurisdiction where, or to or from any person to whom, it is unlawful to make a proxy solicitation. The directors, executive officers and certain other members of management and employees of CME may be deemed “participants” in the solicitation of proxies from CME stockholders in favor of the proposed Merger. You can find information about CME’s executive officers and directors in its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in its Definitive Proxy Statement filed with the SEC on Schedule 14A on April 9, 2019.

109




Annex A-1
EXECUTION VERSION


AGREEMENT AND PLAN OF MERGER

AMONG

TV BIDCO B.V.,

TV BERMUDA LTD.

AND

CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.

DATED AS OF

OCTOBER 27, 2019










-A-1-1-



TABLE OF CONTENTS
 
Page
ARTICLE I THE MERGER
A-1-8
 
 
 
Section 1.1
The Merger
A-1-8
Section 1.2
Closing
A-1-9
Section 1.3
Effective Time
A-1-9
Section 1.4
Directors and Officers of the Surviving Company
A-1-9
Section 1.5
Subsequent Actions
A-1-10
 
 
 
ARTICLE II CONVERSION OF SECURITIES
A-1-10
 
 
 
Section 2.1
Conversion of Capital Stock
A-1-10
Section 2.2
Payment for Securities; Surrender of Certificates
A-1-12
Section 2.3
Dissenting Shares
A-1-15
Section 2.4
Treatment of Company Equity Awards
A-1-16
Section 2.5
Additional Payment Matters; Withholding
A-1-16
 
 
 
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
A-1-17
 
 
 
Section 3.1
Organization and Qualification; Subsidiaries
A-1-17
Section 3.2
Capitalization
A-1-18
Section 3.3
Authorization; Validity of Agreement; Company Action
A-1-20
Section 3.4
Board Approvals
A-1-21
Section 3.5
Consents and Approvals; No Violations
A-1-22
Section 3.6
Company SEC Documents and Financial Statements
A-1-23
Section 3.7
Internal Controls; Sarbanes-Oxley Act
A-1-24
Section 3.8
Absence of Certain Changes
A-1-25
Section 3.9
Litigation
A-1-25
Section 3.10
Employee Benefit Plans
A-1-25
Section 3.11
Labor Matters
A-1-27
Section 3.12
Taxes
A-1-27
Section 3.13
Contracts
A-1-29
Section 3.14
Title to Assets; Liens; Leases
A-1-31
Section 3.15
Environmental Matters
A-1-32
Section 3.16
Intellectual Property
A-1-32
Section 3.17
Compliance with Laws; Permits
A-1-33
Section 3.18
Information in the Proxy Statement
A-1-35
Section 3.19
Opinion of Financial Advisor
A-1-35
Section 3.20
Insurance
A-1-36
Section 3.21
Related Party Transactions
A-1-36
Section 3.22
Brokers; Expenses
A-1-36
Section 3.23
Takeover Statutes
A-1-36
Section 3.24
No Other Representations or Warranties
A-1-37
 
 
 
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
A-1-37
 
 
 
Section 4.1
Organization and Qualification
A-1-37
Section 4.2
Authorization; Validity of Agreement; Necessary Action
A-1-38

-A-1-2-



Section 4.3
Consents and Approvals; No Violations
A-1-38
Section 4.4
Litigation
A-1-39
Section 4.5
Information in the Proxy Statement
A-1-39
Section 4.6
Ownership of Company Capital Stock
A-1-39
Section 4.7
Sufficient Funds
A-1-39
Section 4.8
Ownership and Operations of Merger Sub
A-1-41
Section 4.9
Brokers and Other Advisors
A-1-41
Section 4.10
No Agreements with Shareholders
A-1-41
Section 4.11
No Agreements with Management
A-1-41
Section 4.12
Solvency
A-1-42
Section 4.13
Investigation; Limitation on Warranties; Disclaimer of Other Representations and Warranties
A-1-43
 
 
 
ARTICLE V CERTAIN COVENANTS OF THE COMPANY
A-1-43
 
 
 
Section 5.1
Conduct of Business by the Company Pending the Closing
A-1-43
Section 5.2
Solicitation
A-1-49
Section 5.3
Proxy Statement
A-1-54
Section 5.4
Shareholder Approval
A-1-54
Section 5.5
Curaçao Restructuring
A-1-55
 
 
 
ARTICLE VI ADDITIONAL AGREEMENTS OF THE PARTIES
A-1-56
 
 
 
Section 6.1
Access; Confidentiality
A-1-56
Section 6.2
Consents and Approvals
A-1-56
Section 6.3