Document:

EXHIBIT 10.1

 

FORM OF EQUITY-BASED INCENTIVE AWARD AGREEMENT

 

CTC MEDIA, INC.

 

Equity-Based Incentive Award Agreement

 

THIS
EQUITY-BASED INCENTIVE AWARD AGREEMENT (this “Agreement”) is effective
as of February 24, 2010 and is made by and between CTC Media, Inc., a Delaware
corporation (the “Company”), and [                             ]
(the “Participant”).

 

Preliminary Statements

 

A.    Pursuant to the Notice of Option Grant
evidencing the grant of an Option to the Participant by the Company on October
22, 2009 (the “Notice of Option Grant”), and the Stock Option Agreement,
the Participant was granted an Option to purchase Option Shares at an exercise
price of $16.80 per Option Share, pursuant to Section 5 (Stock
Options) of the Company’s 2009 Stock Incentive Plan.

 

B.    The Company now desires to grant to the
Participant the right to receive potential cash payments in respect of any
appreciation of the Common Stock above $14.00 per share, and not to exceed
$16.80 per share.  Such grant is made
pursuant to Section 8 (Other Stock-Based Awards)
of the Company’s 2009 Stock Incentive Plan.

 

C.    Capitalized terms used but not defined in
this Agreement have the meanings ascribed to them in the Notice of Option Grant
and the Stock Option Agreement.

 

NOW,
THEREFORE, it is hereby agreed as follows:

 

1.     Grant
of Equity-Based Incentive Award. 
Upon any exercise of the Option and with respect to each Option Share
issued to the Participant upon such exercise in accordance with the terms
thereof, the Participant will have the right (the “Award”) to receive a
cash payment from the Company in an amount equal to (a) the lesser of the Fair
Market Value (as defined below) per share of Common Stock of the Company on the
date of exercise of the Option or $16.80, minus (b) $14.00 (such amount, the “Distributable
Amount”). The Company or a subsidiary thereof will pay the aggregate
Distributable Amount to the Participant within 30 days after the applicable
exercise of the Option, such payment to be made in U.S. dollars (or it’s
equivalent in Russian Rubles if such payment takes place in Russia)  in immediately available funds to an account
designated in writing by the Participant.

 

For
purposes hereof, “Fair Market Value” means:

 

(a)                   if the Common Stock trades on a U.S. national
securities exchange, the closing sale price (for the primary trading session)
on the date of the applicable exercise of the Option;

 

(b)                   if the Common Stock does not
trade on any such exchange, the average of the closing bid and asked prices as
reported by an authorized OTCBB (Over-The-Counter
Bulletin Board) market data vendor as listed on the OTCBB website
(otcbb.com) on the date of the applicable exercise of the Option; or

 

(c)                   if the Common Stock is not publicly traded, the
fair market value of the Common Stock on the date of the applicable exercise of
the Option, as determined in good faith by the Board.

 

 

2.     Exercise.  Unless otherwise permitted by the Board or
the Compensation Committee thereof, the Participant may only exercise the
Award, in whole or in part, concurrently with, and to the extent of (a) an
exercise of the Option in accordance with the terms thereof, or (b) a
forfeiture (in form and substance satisfactory to the Company) of a
corresponding portion of the Option.  For
the avoidance of doubt, the Award shall only vest and become exercisable to the
extent and at the time that such Option has vested (including, without
limitation, as a result of an acceleration of vesting pursuant to a Change of
Control in accordance with the terms of the Stock Option Agreement), become
exercisable and been properly exercised in accordance with the terms of the
Stock Option Agreement.  Any election to
exercise the Option in accordance with the terms thereof will be deemed to be
an election to exercise the Award with respect to the number of Option Shares
for which the Option has been so exercised.

 

3.     Termination.  The Award will automatically and immediately
terminate and be canceled upon the termination or expiration of the Option
pursuant to the provisions thereof.

 

4.     Effect of a Change of
Control.  In the event of any Change of
Control where the acquiring or succeeding company in such transaction (or the
parent thereof) assumes the Option or replaces the Option with an equity or
cash incentive program which provides the Participant with an economic benefit
substantially similar to the Option, then such acquiring or succeeding company
shall also assume the obligations hereunder or replace the rights hereunder
with an equity or cash incentive program which provides the Participant with an
economic benefit substantially similar to the Award.

 

5.     Forfeiture
of Gain.  In the event that the
Participant materially breaches the provisions of Sections 4 (Non-Competition and Non-Solicitation), 5 (Proprietary Information) or 6 (Notice of
Resignation or Cessation of Service) of the Stock Option Agreement,
the Participant shall pay to the Company, by way of liquidated damages, an
amount (in cash) equal to the aggregate Distributable Amount previously paid to
the Participant in accordance with the terms hereof.

 

6.     Withholding.  The Company will not be obligated to pay any
Distributable Amount hereunder unless and until the Participant pays to the
Company, or makes provision satisfactory to the Company for payment of, any
applicable taxes, including withholding taxes, required by applicable law to be
withheld in respect of the exercise of the Award; provided that the Company may
offset from the payment of any Distributable Amount the amount of any taxes
required to be withheld by the Company.

 

7.     Amendment.  The Company may amend or modify the terms of
the Award granted hereunder, provided, however, that the Participant’s consent
to such action shall be required unless the Board determines in good faith that
the action, taking into account any related action, would not materially and
adversely affect the Participant’s rights hereunder.

 

8.     Changes in Capitalization.  In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event affecting the Common Stock of the Company, the dollar values
applicable to the Award set forth in Section 1 shall be proportionately
adjusted.

 

9.     Successors and Assigns.  The Participant will not assign, transfer,
pledge or otherwise encumber any of its rights hereunder without the prior
written approval of the Company, except that the rights of the Participant
hereunder will be assigned and transferred to any 

 

2

 

individual or entity to which the Option is assigned
and transferred in accordance with the terms thereof.  The provisions of this Agreement shall inure
to the benefit of, and be binding upon, the Company and its successors and
assigns and the Participant, the Participant’s assigns and the legal
representatives, heirs and legatees of Participant’s estate.

 

10.   Jurisdiction.  The Participant hereby acknowledges and
agrees that the Company may enforce any provision hereof, including, without
limitation, Section 4 (Forfeiture of Gain)
in any court of competent jurisdiction, and in particular the Participant
hereby submits to the nonexclusive jurisdiction of the courts of the State of
Delaware and the courts of the Russian Federation in respect thereof.

 

11.   Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

12.
This Agreement is written, construed and executed in two copies, each made in
English and Russian languages. In case any discrepancy should be found between
English and Russian versions, the English version shall prevail. Each of the
Parties has taken one copy of the Agreement.

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date set forth in the preamble.

 

 

	
  CTC
  MEDIA, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Participant:

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Contact
  details: (address etc.)

  	
   

  	
   

  
	
   

  	
   

  
	
  Signed

  	
   

  	
  /

  	
   

  	
   /

  
											

 

3EXHIBIT 10.2

 

KUDRYASHOV OPTION AGREEMENT

 

CTC MEDIA, INC.

 

Second Amended And Restated Stock Option Agreement

 

THIS
SECOND AMENDED AND RESTATED STOCK OPTION AGREEMENT (this “Agreement”)
made as of April 22, 2010, is entered into between CTC Media, Inc., a
Delaware corporation (the “Company”), and
Anton Kudryashov (“Optionee”), and
amends and restates in its entirety the Amended and Restated Stock Option
Agreement, dated as of August 24, 2009 (the “Prior
Agreement”), between the Company and the Optionee, which amended and
restated the Stock Option Agreement, dated as of November 7, 2008 (the “Original Agreement”), between the Company and the Optionee.

 

Preliminary
Statements:

 

A.    The Company has entered into the Original Agreement, the Prior
Agreement and this Agreement because it desires to retain the services of
Optionee by providing him with this incentive to contribute to the financial
success of the Company and its subsidiaries.

 

B.    The Company and the Optionee desire to amend and restate in its
entirety the Prior Agreement as set forth herein.

 

C.    The Prior Agreement, amended, among other things (i) the
Exercise Price applicable to all Option Shares that may be acquired hereunder,
as set forth therein (the “Exercise Price Amendment”),
and (ii) the schedule pursuant to which the A Option Shares shall become
exercisable, as set forth therein (the “Vesting Schedule Amendment”).  The parties acknowledged and agreed in the
Prior Agreement that the Exercise Price Amendment was subject to the approval
of the stockholders of the Company, which approval the Company intended to seek
at the Company’s 2010 annual meeting of stockholders.  It was agreed in the Prior Agreement that, in
the event that the stockholders of the Company did not approve such Exercise
Price Amendment, (1) the “A Exercise Price” and “B/C Exercise Price” set
forth in the Original Agreement and (2) the schedule pursuant to which the
A Option Shares shall become exercisable as set forth in Section 4(a) of
the Original Agreement, would continue to apply.

 

D.            In February 2010, Alfa CTC Holdings Limited and MTG
Russia AB, which together hold a majority of the Company’s capital stock,
informed the Company that they no longer intended to approve the Exercise Price
Amendment. The Compensation Committee of the Board therefore determined on February 24,
2010 that the Exercise Price Amendment would not be submitted to stockholders
for approval at the Company’s 2010 annual meeting of stockholders.

 

E.             The Company and the Optionee desire to enter into this
Agreement to amend the Prior Agreement to (i) memorialize certain terms of
the Original Agreement, in light of the fact that stockholder approval of the
Exercise Price Amendment was not obtained, and (ii) to amend certain of
the performance criteria applicable to the vesting of the Option with respect
to the C Option Shares, as approved by the Compensation Committee of the Board
on April 22, 2010.

 

1

 

F.     All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.

 

NOW, THEREFORE, it is hereby agreed as
follows:

 

1.     Grant of Option.  The Company hereby confirms the grant to
Optionee, pursuant to the Original Agreement and as of the Grant Date, an
option (the “Option”) to purchase up to
3,042,482 shares of Common Stock (the “Option
Shares”).  The first 1,521,241
Option Shares shall be hereinafter referred to as the “A Option Shares”, the next 760,621 Option Shares shall be
hereinafter referred to as the “B Option Shares”
and the remaining 760,620 Option Shares shall be hereinafter referred to as the
“C Option Shares”.

 

Of
the 760,621 B Option Shares, 253,541 B Option Shares shall be referred to as
the “B-1 Option Shares”, 253,540 B Option
Shares shall be referred to as the “B-2 Option Shares”
and 253,540 B Option Shares shall be referred to as the “B-3 Option
Shares”.

 

Of
the 760,620 C Option Shares, 253,540 C Option Shares shall be referred to as
the “C-1 Option Shares”,  253,540
C Option Shares shall be referred to as the “C-2 Option
Shares” and 253,540 C Option Shares shall be referred to as the “C-3 Option Shares”.

 

Subject
to the terms and conditions set out in this Agreement, the Option with respect
to A Option Shares shall be exercisable at the A Exercise Price, and with
respect to the B Option Shares and the C Option Shares shall be exercisable at
the B/C Exercise Price.

 

2.     Option Term.  The Option shall have a term of ten (10) years
measured from the Grant Date and, except as provided in Paragraph 5(e), shall
accordingly expire at the close of business on the Expiration Date, unless
sooner terminated in accordance with Paragraph 5 or 6.

 

3.     Limited Transferability.
 During Optionee’s lifetime, the
Option shall be exercisable only by Optionee (or his permitted transferee,
including a trustee of a trust set forth below) and shall not be assignable or
transferable other than by will or by the laws of descent and distribution
following Optionee’s death; provided, however, that Optionee may transfer the
Option to a trustee of a trust solely for his benefit and/or the benefit of his
immediate family members so long as such transfer does not result in the
Company incurring any additional stock-based compensation expense under US
generally accepted accounting principles.  For this purpose, “immediate
family members” shall include Optionee’s spouse, children, parents and/or
parents-in-law.

 

2

 

4.     Conditions to, and Dates
of, Exercise.

 

(a)           A Option Shares. 
The Option shall become exercisable for the A Option Shares in
accordance with the following schedule:

 

	
  for
  Date:

  	
   

  	
  Aggregate number of A Option Shares

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after
  August 4, 2009

  	
   

  	
  507,081

  	
   

  
	
  On or after
  September 30, 2009

  	
   

  	
  633,851

  	
   

  
	
  On or after
  December 31, 2009

  	
   

  	
  760,621

  	
   

  
	
  On or after
  March 31, 2010

  	
   

  	
  887,391

  	
   

  
	
  On or after
  June 30, 2010

  	
   

  	
  1,014,161

  	
   

  
	
  On or after
  September 30, 2010

  	
   

  	
  1,140,931

  	
   

  
	
  On or after
  December 31, 2010

  	
   

  	
  1,267,701

  	
   

  
	
  On or after
  March 31, 2011

  	
   

  	
  1,394,471

  	
   

  
	
  On or after
  June 30, 2011

  	
   

  	
  1,521,241

  	
   

  

 

(b)           B-1 Option Shares.  (i) Except as set forth in Paragraphs
4(b)(ii) and 4(b)(iii) below, the Option shall only become
exercisable with respect to the B-1 Option Shares if the Revenue Objective for
2009 is achieved.  Subject to the
achievement of such Revenue Objective, the Option shall become exercisable for
the B-1 Option Shares in accordance with the following schedule:

 

	
  for
  Date:

  	
   

  	
  Aggregate number of B-1 Option Shares

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2009

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2011

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2012

  	
   

  	
  253,541

  	
   

  

 

(ii)           Notwithstanding the fact that the
Revenue Objective for 2009 is not achieved, if the Cumulative Revenue Objective
for 2010 is achieved, the Option shall become exercisable for the B-1 Option
Shares in accordance with the following schedule:

 

	
  for
  Date:

  	
   

  	
  Aggregate number of B-1 Option Shares

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2010

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2012

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2013

  	
   

  	
  253,541

  	
   

  

 

(iii)          Notwithstanding the fact that neither
the Revenue Objective for 2009 nor  the
Cumulative Revenue Objective for 2010 is achieved, if the Cumulative Revenue
Objective for 2011 is achieved, the Option shall become exercisable for the B-1
Option Shares in accordance with the following schedule:

 

3

 

	
  for
  Date:

  	
   

  	
  Aggregate number of B-1 Option Shares

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2011

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2013

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2014

  	
   

  	
  253,541

  	
   

  

 

(c)           B-2 Option Shares. (i) Except
as set forth in Paragraphs 4(c)(ii) and 4(c)(iii) below, the Option
shall only become exercisable with respect to the B-2 Option Shares if the
Revenue Objective for 2010 is achieved. 
Subject to the achievement of such Revenue Objective, the Option shall
become exercisable for the B-2 Option Shares in accordance with the following schedule:

 

	
  for
  Date:

  	
   

  	
  Aggregate number of B-2 Option Shares

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2010

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2012

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2013

  	
   

  	
  253,540

  	
   

  

 

(ii)           Notwithstanding the fact that the
Revenue Objective for 2010 is not achieved, if the Cumulative Revenue Objective
for 2010 is achieved, the Option shall become exercisable for the B-2 Option
Shares in accordance with the following schedule:

 

	
  for
  Date:

  	
   

  	
  Aggregate number of B-2 Option Shares

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2010

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2012

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2013

  	
   

  	
  253,540

  	
   

  

 

(iii)          Notwithstanding the fact that neither
the Revenue Objective for 2010 nor the Cumulative Revenue Objective for 2010 is
achieved, if the Cumulative Revenue Objective for 2011 is achieved, the Option
shall become exercisable for the B-2 Option Shares in accordance with the
following schedule:

 

	
  for
  Date:

  	
   

  	
  Aggregate number of B-2 Option Shares

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2011

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2013

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2014

  	
   

  	
  253,540

  	
   

  

 

4

 

(d)           B-3 Option Shares. The Option
shall only become exercisable with respect to the B-3 Option Shares if the
Revenue Objective for 2011 is achieved and/or the  Cumulative Revenue Objective for 2011 is
achieved.  Subject to the achievement of
such Objective(s), the Option shall become exercisable for the B-3 Option
Shares in accordance with the following schedule:

 

	
  for
  Date:

  	
   

  	
  Aggregate number of B-3 Option Shares

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2011

  	
   

  	
  84,514

  	
   

  
	
  On or after January 1, 2013

  	
   

  	
  169,028

  	
   

  
	
  On or after January 1, 2014

  	
   

  	
  253,540

  	
   

  

 

(e)           C-1 Option Shares.  (i) Except as set forth in Paragraphs
4(e)(ii) and 4(e)(iii) below, the Option shall only become
exercisable with respect to the C-1 Option Shares if both the Cost Objective
for 2009 and the Reorganization Objective for 2009 are achieved.  Subject to the achievement of such
Objectives, the Option shall become exercisable for the C-1 Option Shares in
accordance with the following schedule:

 

	
  for
  Date:

  	
   

  	
  Aggregate number of C-1 Option Shares

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2009

  	
   

  	
  105,642

  	
   

  
	
  On of after June 30, 2010

  	
   

  	
  126,770

  	
   

  
	
  On or after September 30, 2010

  	
   

  	
  147,898

  	
   

  
	
  On or after December 31, 2010

  	
   

  	
  169,026

  	
   

  
	
  On or after March 31, 2011

  	
   

  	
  190,155

  	
   

  
	
  On of after June 30, 2011

  	
   

  	
  211,283

  	
   

  
	
  On or after September 30, 2011

  	
   

  	
  232,412

  	
   

  
	
  On or after December 31, 2011

  	
   

  	
  253,540

  	
   

  

 

(ii)           Notwithstanding the fact that the
Cost Objective for 2009 is not achieved, if each of the Reorganization
Objectives for 2009 and 2010 and the ROCE Objective for 2010 is achieved, the
Option shall become exercisable for the C-1 Option Shares in accordance with
the following schedule:

 

	
  for
  Date:

  	
   

  	
  Aggregate number of C-1 Option Shares

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2010

  	
   

  	
  190,155

  	
   

  
	
  On of after June 30, 2011

  	
   

  	
  211,283

  	
   

  
	
  On or after September 30, 2011

  	
   

  	
  232,412

  	
   

  
	
  On or after December 31, 2011

  	
   

  	
  253,540

  	
   

  

 

(iii)          Notwithstanding the fact that neither
the Cost Objective for 2009 nor the ROCE Objective for 2010 is achieved, if
each of the Reorganization Objectives for 2009, 2010 and 2011 and the ROCE
Objective for 2011 is achieved, the

 

5

 

Option
shall become exercisable for all of the C-1 Option Shares on the Determination
Date for 2011.

 

(f)            C-2 Option Shares. (i) Except
as set forth in Paragraph 4(f)(ii) below, the Option shall only become
exercisable with respect to the C-2 Option Shares if both the ROCE Objective
for 2010 and the Reorganization Objective for 2010 are achieved.  Subject to the achievement of such
Objectives, the Option shall become exercisable for the C-2 Option Shares in
accordance with the following schedule:

 

	
  for
  Date:

  	
   

  	
  Aggregate number of C-2 Option Shares

  which the Option is then exercisable:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after the Determination Date for 2010

  	
   

  	
  190,155

  	
   

  
	
  On of after June 30, 2011

  	
   

  	
  211,283

  	
   

  
	
  On or after September 30, 2011

  	
   

  	
  232,412

  	
   

  
	
  On or after December 31, 2011

  	
   

  	
  253,540

  	
   

  

 

(ii)           Notwithstanding the fact that the
ROCE Objective for 2010 is not achieved, if each of the Reorganization
Objectives for 2009 and 2010 and the ROCE Objective for 2011 is achieved, the
Option shall become exercisable for all of the C-2 Option Shares on the Determination
Date for 2011.

 

(g)           C-3 Option Shares. The Option
shall only become exercisable with respect to the C-3 Option Shares if both the
ROCE Objective for 2011 and the Reorganization Objective for 2011 are
achieved.  Subject to the achievement of
such Objectives, the Option shall become exercisable for all of the C-3 Option
Shares on the Determination Date for 2011.

 

Whether
or not any Objective is achieved shall be determined in good faith by the Board
or a committee thereof in its sole discretion.

 

5.     Cessation of Service.  The option term specified in Paragraph 2
shall terminate (and the Option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:

 

(a)   Should Optionee cease to remain in Service for any reason (other
than death or Disability) while the Option is outstanding, then Optionee shall
have a period of ninety (90) days (commencing with the date of such cessation
of Service) during which to exercise the Option, but in no event shall the
Option be exercisable at any time after the Expiration Date.

 

(b)   Should Optionee die while the Option is outstanding, then the
personal representative of Optionee’s estate or the person or persons to whom
the Option is transferred pursuant to Optionee’s will or in accordance with the
laws of inheritance shall have the right to exercise the Option.  Such right shall lapse, and the Option shall
cease to be outstanding, upon the earlier of (i) the expiration of the
twelve (12) month period measured from the date of Optionee’s death or (ii) the
Expiration Date.

 

(c)   Should Optionee cease Service by reason of Disability while the
Option is outstanding, then Optionee shall have a period of twelve (12) months
(commencing 

 

6

 

with the date of such cessation of Service) during
which to exercise the Option.  In no
event shall the Option be exercisable at any time after the Expiration Date.

 

(d)   During the limited period of post-Service exercisability, the
Option may not be exercised in the aggregate for more than the number of Option
Shares for which the Option is, at the time of Optionee’s cessation of Service,
exercisable pursuant to the exercise schedule specified in Paragraph 4 or the
special acceleration provisions of Paragraph 6. 
Upon the expiration of such limited exercise period or (if earlier) upon
the Expiration Date, the Option shall terminate and cease to be outstanding for
any vested Option Shares for which the Option has not been exercised.  To the extent Optionee is not vested in the
Option Shares at the time of Optionee’s cessation of Service, the Option shall
immediately terminate and cease to be outstanding with respect to those shares.

 

(e)   If the Optionee is precluded from exercising the Option solely by
virtue of any law (including applicable securities law) or pursuant to any
blackout or insider trading policy, then notwithstanding anything in this
Agreement to the contrary, the Option shall remain exercisable for thirty (30)
days following the date the Option first becomes exercisable after such
preclusion lapses.  During the limited
period of post-Service exercisability provided for in the immediately preceding
sentence, the Option may not be exercised in the aggregate for more than the
number of Option Shares for which the Option is, at the time of Optionee’s
cessation of Service, exercisable pursuant to the exercise schedule specified
in Paragraph 4 or the special acceleration provisions of Paragraph 6.

 

6.     Acceleration of Option.

 

(a)   In the event of any Corporate Transaction where the successor
corporation in such transaction (or the parent thereof) does not assume the
Option or replace the Option with a cash incentive program which provides
Optionee with an economic benefit substantially similar to the Option, the
exercisability of the Option shall, to the extent the Option is not otherwise
fully exercisable, automatically accelerate in full so that the Option shall,
immediately prior to the effective date of such Corporate Transaction, become fully
exercisable for all the Option Shares and may be exercised for any or all of
those Option Shares as fully-vested shares of Common Stock.

 

(b)   Without limiting the generality of Section 6(a) above,
in the event of (i) any Corporate Transaction where neither MTG or Alfa is
party to the merger or the asset sale or (ii) a Change in Control where a
party other than MTG or Alfa achieves control of a majority of the voting power
of the Company’s then outstanding capital stock through direct and/or indirect
beneficial ownership, the exercisability of the Option shall, to the extent the
Option is not otherwise fully exercisable, automatically accelerate so that the
Option shall, immediately prior to the effective date of such Corporate
Transaction or upon the Change in Control, become exercisable for (i) all
the A Option Shares and (ii) those of the B and/or C Option Shares
for which the applicable Objectives have been achieved as of the effective date
of such Corporate Transaction or Change in Control but which have not yet
become exercisable because of the vesting schedules applicable to such B and/or
C Option Shares, and, in each case, may be exercised for any or all of such
Option Shares as fully-vested shares of Common Stock.

 

(c)   In connection with any Corporate Transaction where the
exercisability of the Option automatically accelerates, the Option shall be
exercised to the extent then exercisable prior to or in connection with the
closing of such Corporate

 

7

 

Transaction and, to the extent that the Option is
not so exercised, it shall terminate and cease to be outstanding immediately
following the closing of such Corporate Transaction.  Without limiting the generality of Section 5,
a Change in Control that is not also a Corporate Transaction shall not effect
the term of the Option.

 

(d)   This Agreement shall not in any way affect the right of the
Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

 

7.     Adjustment in Option
Shares.  In the event of (i) an
extraordinary dividend, other distribution, stock split, stock dividend,
recapitalization, reverse stock split, reorganization, merger, split-up,
split-off, combination of shares, exchange of shares or similar corporate
transaction or event whereby the Common Stock is affected, or (ii) any
unusual or nonrecurring events affecting the Company, its affiliates or the financial
statements of such entities, or changes in applicable rules, rulings,
regulations or other requirements of any governmental body or securities
exchange or quotation system, such that in either case an adjustment is
necessary or appropriate in order to prevent dilution or enlargement of the
benefits hereunder, the Board shall make such appropriate adjustments to (i) the
total number and/or class of securities subject to the Option and (ii) the
A Exercise Price and the B/C Exercise Price or such Option.

 

8.     Shareholder Rights.  The holder of the Option shall not have any
shareholder rights with respect to the Option Shares until such person shall
have exercised the Option, paid the A Exercise Price and/or the B/C Exercise
Price, as the case may be, and become a holder of record of the purchased
shares.

 

9.     Manner of Exercising
Option.

 

(a)   In order to exercise the Option  with
respect to all or any part of the Option Shares for which the Option is at the
time exercisable, Optionee (or any other person or persons exercising the
Option) shall provide written notice of Optionee’s election to exercise all or
a portion of the Option and shall take the following additional actions:

 

(i)            Pay the aggregate A Exercise Price and/or B/C Exercise
Price, as the case may be, for the purchased shares in one or more of the
following forms:

 

(A)  cash or check made payable to the Company; or

 

(B)   by a “net exercise” method whereby the Company withholds from the
delivery of the shares of Common Stock for which the Option is exercised that
number of shares of Common Stock having a Fair Market Value equal to the
aggregate exercise price for the shares of Common Stock for which the Option is
exercised; or

 

(C)   in shares of Common Stock held by Optionee (or any other person or
persons exercising the Option) for the requisite period necessary to avoid a
charge to the Company’s earnings for financial reporting purposes and valued at
Fair Market Value on the Exercise Date; or

 

8

 

(D)  If the Common Stock is at the time traded on Nasdaq or any Stock
Exchange at the time the Option is exercised, then the A Exercise Price
and B/C Exercise Price may also be paid through a special sale and remittance
procedure pursuant to which Optionee (or any other person or persons exercising
the Option) shall concurrently provide irrevocable written instructions (a) to
a Company-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale proceeds available
on the settlement date, sufficient funds to cover the aggregate A Exercise
Price and/or B/C Exercise Price payable, as the case may be, for the purchased
shares plus all applicable national and local income and employment taxes
required to be withheld by the Company by reason of such exercise and (b) to
the Company to deliver the certificates for the purchased shares directly to
such brokerage firm in order to complete the sale.

 

Except to the extent the sale and remittance
procedure is utilized in connection with the Option exercise, payment of the A
Exercise Price and/or B/C Exercise Price, as the case may be, must accompany
the notice delivered to the Company in connection with the option exercise.

 

(ii)           Furnish to the Company appropriate documentation that the
person or persons exercising the Option (if other than Optionee) have the right
to exercise the Option.

 

(iii)          Make appropriate arrangements with the Company for the
satisfaction of all applicable national and local income and employment tax
withholding requirements applicable to the Option exercise.

 

(b)   As soon as practical after the Exercise Date, the Company shall
issue to or on behalf of Optionee (or any other person or persons exercising
the Option) a certificate for the purchased Option Shares, with the appropriate
legends (if any) affixed thereto.

 

(c)   In no event may the Option be exercised for any fractional shares.

 

10.   Non-Competition and
Non-Solicitation; Proprietary Information. 
Notwithstanding any
provision of this Agreement to the contrary, Optionee shall not be permitted to
exercise the Option if he is in breach of Section 7 (Non-Competition and Non-Solicitation) or Section 8
(Proprietary Information) of his
employment agreement with the Company dated as of November 7, 2008 (as
such agreement may be amended from time to time).

 

11.   Representation. The Company
represents that it has properly reserved the number of shares subject to the
grant hereunder and has all corporate authority to make the grant. The shares
subject to the awards described herein shall be registered on a Form S-8
or other appropriate registration statement under the Securities Act of 1933,
as amended.

 

12.   Changes in Accounting Policies; Reporting
Methodologies.   In the
event that the Company changes its accounting policies and/or there is a change
in the method in which the size of the Russian television advertising market is
calculated and/or 

 

9

 

reported, in each case, so as to impact the manner
in which any of the Objectives are determined, Optionee and the Board or a
committee thereof shall in good faith negotiate appropriate amendments to the
manner in which the Objectives are determined to take into account such changes
so that there is no dilution or enlargement to Optionee of the benefits of the
Option.

 

13.   Successors and Assigns.   Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Company and its successors and assigns and
Optionee, Optionee’s assigns and the legal representatives, heirs and legatees
of Optionee’s estate.

 

14.   Notices.  Any notice required to be given or delivered
to the Company under the terms of this Agreement shall be in writing and
addressed to the Company at its principal corporate offices.  Any notice required to be given or delivered
to Optionee shall be in writing and addressed to Optionee at the address
indicated below Optionee’s signature line. 
All notices shall be deemed effective (i) upon personal delivery, (ii) five
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid or (iii) two business days after being sent via
reputable international overnight courier.

 

15.   Non-Statutory Option.  Optionee acknowledges that the Option is not
intended to satisfy the requirements of Section 422 of the US Internal
Revenue Code of 1986, as amended.

 

16.   Governing Law.  The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
Delaware without resort to that State’s conflict-of-laws rules.

 

17.   Arbitration.   Any dispute concerning, arising out of or
relating to this Agreement shall be submitted to binding arbitration before the
London Court of International Arbitration (the “LCIA”) and the arbitration shall be conducted pursuant to the
LCIA Rules.  The number of arbitrators
shall be three (the “Arbitrators”).  One Arbitrator shall be selected by the
Company, one shall be selected by Optionee and the third (who shall serve as
Chair of the arbitral tribunal) shall be selected by the other two
Arbitrators.  In the event that either
the Company or Optionee shall fail to select its or his Arbitrator within
thirty days after the matter is submitted for arbitration, then, upon request
of the other, such Arbitrator shall be appointed by the LCIA.  In the event the two Arbitrators selected by
the Company and Optionee fail to select the third Arbitrator within 15 calendar
days of the appointment of the second Arbitrator, then, upon request of either
of them, such third Arbitrator shall be appointed by the LCIA.  The arbitration shall be conducted in
accordance with the following additional provisions:

 

(i)                                    The parties
shall commence the arbitration by jointly filing a written submission with the
LCIA.

 

(ii)                                 The seat of
arbitration shall be London, England; the language to be used in the arbitral
proceedings shall be English; and the governing law shall be the substantive
internal laws of the State of Delaware.

 

(iii)                              Not later than
30 calendar days after the conclusion of the arbitration hearing, the
Arbitrators shall prepare and distribute to the parties a writing setting forth
the arbitral decision (which shall be by majority 

 

10

 

vote) and the Arbitrators’ reasons therefor.  Any award rendered by the Arbitrators shall
be final, conclusive and binding upon the parties, not subject to appeal, and
judgment thereon may be entered and enforced in any court of competent
jurisdiction, provided that the Arbitrators shall have no power or authority to
grant injunctive relief, specific performance or other equitable relief.

 

(iv)                             The Arbitrators
shall have no power or authority, to (x) modify or disregard any provision
of this Agreement, including the provisions of this Section 17, or
(y) address or resolve any issue outside the scope of this arbitration
provision that is not submitted by the parties.

 

(v)                                The parties
shall not be entitled to discovery, and the Arbitrators shall have no power to
order discovery of documents, oral testimony or other materials.

 

(vi)                             In connection
with any arbitration proceeding pursuant to this Agreement, each party shall
bear its or his own costs and expenses.

 

18.   Entire Agreement; Amendment.  This Agreement is intended to be the sole
agreement of the parties hereto as it relates to this subject matter and does
hereby supersede all other agreements of the parties relating to the subject
matter hereof, including, without limitation, the Prior Agreement.

 

19.   Captions.  The captions of the sections of this
Agreement are for convenience of reference only and in no way define, limit or
affect the scope or substance of any section of this Agreement.

 

20.   Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

11

 

IN
WITNESS WHEREOF, the parties hereto have caused the Option to be executed as of
the date set forth in the preamble.

 

 

	
   

  	
  CTC
  MEDIA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Boris
  Podolsky

  
	
   

  	
   

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Optionee:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Anton
  Kudryashov

  
	
   

  	
   

  
	
   

  	
  Address:

  

 

12

 

APPENDIX

 

The
following definitions shall be in effect under the Agreement:

 

1.             Adjusted Revenues shall mean, with respect to any fiscal year of the Company, Revenues
for such fiscal year as adjusted to include the total operating revenues for
any acquisition for which the Company began consolidating the results of
operations of the acquired business with the Company’s results of operations
during such fiscal year on a pro forma
annualized basis as if the acquired business had been owned by the Company for
the entirety of such fiscal year.

 

2.             Agreement shall mean this Stock Option Agreement.

 

3.             A Exercise Price shall mean US$22.07 per A Option Share.

 

4.             AKAR
shall mean the Association of Communication Agencies of Russia or its any
successor organization thereto.

 

5.             Alfa
shall mean ABH Holdings Corporation together with its affiliates (as such term
is defined in the Exchange Act).

 

6.             A Option Share
shall have the meaning set forth in Section 1.

 

7.             Average  Capital
Employed shall mean, with respect to
any fiscal year, the sum of the Company’s consolidated
total assets less its consolidated total current liabilities as
at the end of each quarter in such fiscal year divided by four.

 

8.             Baseline Operating Expenses shall mean in the case of 2009, the Operating
Expenses for 2008 (as adjusted to include Operating Expenses for any
acquisition for which the Company began consolidating the results of operations
of the acquired business with the Company’s results of operations during 2008
on a pro forma annualized basis as if the
acquired business had been owned by the Company for all of 2008) multiplied by
1.135 (or, in the event that the Consumer Price Inflation Index as published by
the Ministry of Statistics for the Russian Federation for 2009 is less than 12%
or greater than 15%, multiplied by a number equal to 1.0 plus such actual
annual inflation rate).

 

9.             B/C Exercise Price shall mean US$5.49 per B Option Share or C Option Share, as applicable.

 

10.       B Option Share shall have the meaning set forth in Section 1.

 

11.       B-1 Option Share shall have the meaning set forth in Section 1.

 

12.       B-2 Option Share shall have the meaning set forth in Section 1.

 

13.       B-3 Option Share shall have the meaning set forth in Section 1.

 

14.       Board
shall mean the Company’s Board of Directors.

 

A-1

 

15.        Change in Control shall mean any party either alone or with its affiliates (as such term
is defined in the Exchange Act) achieving control of a majority of the voting
power of the Company’s then outstanding capital stock through direct and/or
indirect beneficial ownership.

 

16.        Common Stock shall mean the Company’s common stock.

 

17.        C Option Share shall have the meaning set forth in Section 1.

 

18.        C-1 Option Share shall have the meaning set forth in Section 1.

 

19.        C-2 Option Share shall have the meaning set forth in Section 1.

 

20.        C-3 Option Share shall have the meaning set forth in Section 1.

 

21.        Corporate Transaction shall mean either of the following shareholder-approved transactions to
which the Company is a party:

 

(i)                                    a merger or
consolidation in which securities possessing more than fifty percent (50%) of
the total combined voting power of the Company’s outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such transaction, or

 

(ii)                                 the sale,
transfer or other disposition of all or substantially all of the Company’s
assets in complete liquidation or dissolution of the Company.

 

22.        Company shall mean CTC Media, Inc., a Delaware corporation.

 

23.        Cost Objective shall mean, with respect to 2009, that Operating Expenses were lower
than the Baseline Operating Expenses by 2.5% for 2009.

 

24.        Cumulative Revenue Objective shall mean, with respect to 2010, that the percentage
compounded annual growth rate by which 2010 Revenues exceeded 2008 Adjusted
Revenues is at least five percentage points greater than the percentage
compounded annual growth rate by which the Russian Television Advertising Market
Size increased from 2008 to 2010, and, with respect to 2011, that the
percentage compounded annual growth rate by which 2011 Revenues exceeded 2008
Adjusted Revenues is at least five percentage points greater than the
percentage compounded annual growth rate by which the Russian Television
Advertising Market Size increased from 2008 to 2011; by way of example if the
Russian Television Advertising Market Size grew by 10% from 2008 to 2009 and by
a further 10% from 2009 to 2010, Revenues for 2010 would need to be at least
32.25% more than Adjusted Revenues for 2008 for the Cumulative Revenue
Objective for 2010 to be met (or, on average, 15% growth year-on-year).

 

25.        Determination Date shall mean the date on which the Board or a committee thereof determines
in good faith whether any Objective for the immediately preceding fiscal year
has been achieved, which date shall be no later than 30 calendar days following
the date on which the Company files its annual report 

 

A-2

 

on Form 10-K with the
US Securities and Exchange Commission for such year but in no event later than
100 calendar days after the end of such fiscal year; provided, that with
respect to any Revenue Objective or Cumulative Revenue Objective, such date
shall be no later than the later of (x) such date and (y) 30 calendar
days following the date on which AKAR publicly announces the Russian Television
Advertising Market Size for such year.

 

26.        Disability shall mean the inability of Optionee to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment and shall be determined by the Board or a committee thereof on the
basis of such medical evidence as the Board or such committee deems warranted under
the circumstances.

 

27.        Employee shall mean an individual who is in the employ of the Company (or any
Parent or Subsidiary), subject to the control and direction of the employer
entity as to both the work to be performed and the manner and method of performance.

 

28.        Exchange Act shall mean the US Securities Exchange Act of 1934, as amended.

 

29.        Exercise Date shall mean the date on which the Option shall have been exercised in
accordance with Paragraph 9 of the Agreement.

 

30.        Exercise Price Amendment shall have the meaning set forth in the Preliminary
Statements.

 

31.        Expiration Date shall mean August 4, 2018.

 

32.        Fair Market Value per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:

 

(i)                                    If the Common
Stock is at the time traded on Nasdaq, then the Fair Market Value shall be the
official close price per share of Common Stock on the date in question, as the
price is reported by Nasdaq.  If there is
no close price for the Common Stock on the date in question, then the Fair
Market Value shall be the close price on the last preceding date for which such
quotation exists.

 

(ii)                                 If the Common
Stock is at the time listed on any Stock Exchange, then the Fair Market Value
shall be the closing price per share of Common Stock on the date in question on
the Stock Exchange determined by the Board to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange.  If there
is no closing price for the Common Stock on the date in question, then the Fair
Market Value shall be the closing price on the last preceding date for which
such quotation exists.

 

(iii)                              If the Common
Stock is at the time neither listed on any Stock Exchange nor traded on Nasdaq,
then the Fair Market Value shall be determined in good faith by the Board.

 

A-3

 

33.        Grant Date shall mean November 7, 2008.

 

34.        MTG
shall mean Modern Times Group MTG AB together with its affiliates (as such term
is defined in the Exchange Act).

 

35.        Nasdaq
shall mean the Nasdaq Stock Market, any market thereof or any successor system,
as applicable.

 

36.        Objective shall mean any or all of the Revenue Objective, the Cumulative Revenue
Objective, the Cost Objective, the ROCE Objective and/or the Reorganization
Objective.

 

37.        Operating Expenses shall mean the Company’s total consolidated operating expenses other
than:

 

(i)                                    (a) depreciation and amortization, (b) amortization of
programming rights, and (c) amortization of sublicensing rights (currently
categorized as direct operating expenses and selling, general and
administrative expenses, as adjusted for acquisitions that are consolidated for
only a portion of any year), each denominated in Russian rubles;

 

(ii)                                 stock-based compensation expense; and

 

(iii)                              any expense exempted from this definition of “Operating Expenses” by the
Board’s Compensation Committee.

 

Operating expenses
that are generated in a currency other than Russian rubles shall be translated
into Russian rubles using the same weighted average exchange rate methodology
used by the Company to translate its financial statements into US dollars.  In the event of any changes in accounting
principles or the classification of expenses, the results for a fiscal year
shall be adjusted so that such results will be comparable with the results for
the prior fiscal year.

 

38.        Option Shares shall mean, collectively, the A Option Shares, B Option Shares and C
Option Shares and individually, any of them.

 

39.        Optionee shall mean Anton Kudryashov.

 

40.        Original Agreement shall mean the Stock Option Agreement, dated as of November 7,
2008, between the Company and the Optionee.

 

41.        Parent
shall mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, provided each corporation in the unbroken
chain (other than the Company) owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.

 

A-4

 

42.        Prior Agreement shall mean the Amended and Restated Stock Option Agreement, dated as of
August 24, 2009, between the Company and the Optionee.

 

43.        Reorganization Objective shall mean, with respect to 2009, 2010 and 2011,
achieving in such year those organizational objectives that the Board
establishes for such year based upon its review and consideration of the
recommendations set out in the study by Booz Allen Hamilton commissioned by the
Company in 2008; which organizational objectives for any year shall be provided
to Optionee no later than December 20th of the
immediately preceding year.

 

44.        Revenue Objective shall mean, with respect to any of 2009, 2010 and 2011, that Revenues
for such year exceeded Adjusted Revenues for the immediately preceding year by
at least five percentage points more than the Russian Television Advertising
Market Size for such year exceeded the Russian Television Advertising Market
Size for the immediately preceding year; by way of example if the Russian
Television Advertising Market Size for 2009 was 15% more than the Russian
Television Advertising Market Size for 2008, Revenues for 2009 would need to be
at least 20% more than Adjusted Revenues for 2008 for the Revenue Objective to
be met.

 

45.        Revenues shall mean, with respect to any fiscal year of the Company, the
consolidated total operating revenues of the Company for such year expressed in
Russian rubles less total operating revenues attributable to any acquisition by
the Company for which the Company began consolidating the results of operations
of the acquired business with the Company’s results of operations during such
fiscal year, each denominated in Russian rubles; provided that revenues that
are generated in a currency other than Russian rubles shall be translated into
Russian rubles using the same weighted average exchange rate methodology used
by the Company to translate its financial statements into US dollars.

 

46.        ROCE shall
mean, with respect to any fiscal year, the Company’s return
on capital employed for such year calculated on a Russian
ruble basis as follows: (a) the Company’s consolidated EBIT (earnings
before interest and taxes) for such fiscal year divided by (b) the Average
Capital Employed for such fiscal year; provided that the foregoing calculation
is subject to adjustment at the discretion of the Compensation Committee of the
Board to account for impairment charges, acquisitions or other extraordinary or
non-recurring charges).

 

47.        ROCE Objective
shall mean, with respect to 2010, that ROCE is greater than
21.3% and, with respect to 2011, that ROCE is
greater than a percentage figure to be set by the Board or a committee
thereof in its sole discretion and provided to the Optionee no later than March 31,
2011.

 

48.        Russian Television Advertising Market Size shall mean, with respect to any year, the monetary
size of the Russian television advertising market for such year as reported by
AKAR.

 

A-5

 

49.       Service shall mean the Optionee’s performance of services for the Company (or
any Parent or Subsidiary) in the capacity of an Employee, a non-employee member
of the board of directors or an independent consultant.

 

50.       Stock Exchange shall mean the American Stock Exchange, the New York Stock Exchange or
the London Stock Exchange.

 

51.       Subsidiary
shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, provided each corporation (other than
the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

 

52.       Vesting Schedule Amendment shall have the meaning set forth in the Preliminary
Statements.

 

A-6

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