Document:

Exhibit 4.3

 

MODERN TIMES GROUP MTG AB 2007 STOCK OPTION TERMS

	
§ 1

	
Definitions

As used herein, the following definitions shall apply:

	
”Affiliate”

	 	
Subsidiary as defined in the Swedish Companies Act (2005:551) or any other company which is associated with the Company and is designated by the Board as an Affiliate.

 

	
”Board”

	 	
The board of directors of the Company.

 

	
”Change in Control”

	 	
A situation when someone, other than Investment AB Kinnevik and/or its Affiliate, acquires more than 50 per cent of  the total combined voting power of the Company’s then outstanding shares.

 

	
”Company”

	 	
Modern Times Group MTG AB (publ), reg. no. 556309-9158

 

	
”Continuous Status as an Employee”

	 	
The absence of any interruption or termination of service as an Employee. Termination of service as an Employee shall be considered to occur at the moment when the Employee gives notice or is given notice. Continuous Status as an Employee shall not be considered interrupted in the case of transfer of employment to the Company or any Affiliate, sick leave, parental leave, infant care leave, medical emergency leave, military leave, or any other leave of absence authorized in writing by the Board prior to or after its commencement.

 

	
”Disability”

 

	 	
With respect to an Employee shall mean physical or mental disability or infirmity of an Employee, as determined by a physician of recognized standing selected by the Company, that prevents (or, in the opinion of such physician, is reasonably expected to prevent) the normal performance of the Employee’s duties as an employee of the Company for any continuous period of 180 days, or for 180 days during any one-twelve month period.

 

	
”Employee”

	 	
Individual who is employed by the Company or any Affiliate.

 

	
”Exercise Price”

 

	 	
The price payable for each Warrant

	
”Grant Date”

	 	
The date when both parties have signed the Stock Option Grant Agreement.

 

	
”Option”

	 	
Stock Option granted in accordance with the Stock Option Grant Agreement.

 

	
”Optionee”

	 	
An Employee who has been selected by the Board in its sole

discretion to receive an Option or who has an outstanding Option granted under Modern Times Group AB 2007 Stock Option Terms.

 

  

  

  

 

	
”Retirement”

 

	 	
Shall mean voluntary resignation by an Employee from his/her employment with the Company or its Affiliates (i) following age 55 and achieving 5 years of service with the Company or its Affiliates or (ii) involving such other circumstances as may be determined by the Board in its sole discretion.

 

	
”Share”

	 	
One Class B share of the Company with present quota value of SEK 5.

 

	
”Subscription Price”

 

	 	
The price at which subscription for new share may be made according to a Warrant

 

	
”Warrant”

	 	
A warrant which gives right to subscription of a share of the Company in accordance with appendix A, ”Villkor för Modern Times Group MTG:s (publ) optionsrätter 2007/2012 (English: “Terms and conditions for Modern Times Group MTG  AB’s (publ) warrants  2007/2012)

	
§ 2

	
Grant of Options

Grant to the Optionee free of charge by the Company, in accordance with the terms and conditions of the Stock Option Grant Agreement, the number of Options as stated in the Stock Option Grant Agreement, to acquire the number of Shares as stated in the Stock Option Agreement from the Company or from a party appointed by the Company through exercise of the number Warrants of the Company as stated in the Stock Option Grant Agreement. The Exercise Price to acquire a Warrant is SEK 1 per Warrant.

	
§ 3

	
Warrants

Warrants subject to the Options have been issued in accordance with a resolution of the Annual General Meeting in the Company on May 9, 2007. Each Warrant gives right to subscription of one new Share. To receive a Share through exercise of a Warrant, the Optionee must pay a Subscription Price amounting to SEK [belopp] per Share. Hence, to receive a Share, the acquisition price is the total of the Exercise Price to acquire a Warrant and the Subscription Price to acquire a Share, i.e. total acquisition price to acquire one Share is SEK [belopp]. In accordance with the terms and conditions for the Warrants, the number of Shares each Warrant entitles to and/or the Subscription Price may be adjusted if certain events occur.

	
§ 4

	
Delivery of shares

Subject to certain requirements, the Options formally entitle the Optionee to acquire Warrants of the Company that give a right to subscribe for Shares of the Company. This structure has solely come into being of technical reasons related to the Swedish Companies Act. The Optionee is fully aware of this and understands that this Agreement does not provide any right to dispose of acquired Warrants. By accepting the Stock Option Grant Agreement, the Optionee therefore, gives the Company or a party appointed by the Company, an irrevocable right and obligation to, at notice of exercise of the Options to the extent vested, on behalf of the Optionee, immediately exercise the Warrants acquired and subscribe for Shares of the Company which shall be delivered to the Optionee.

 

  

  

  

 

 

 

	
§ 5

	
Effect of revocation

If the Optionee revokes the right for the Company or a party appointed by the Company to exercise the Warrants which have been acquired at exercise of the Options on behalf the Optionee in accordance with § 4 above, the Options shall immediately terminate and be cancelled without any payment therefore.

	
§ 6

	
Vesting schedule

The Options shall become exercisable on May 15, 2010.

	
§ 7

	
Expiration date

The Options will expire on May 15, 2012 and cannot thereafter be exercised.

	
§ 8

	
Termination of Optionee’s status as Employee

	
(a)  

	
In the event of termination of Optionee’s Continuous Status as an Employee, the Optionee may exercise the Options to the extent exercisable on the date of termination. Such exercise must occur within three (3) months after the date of termination (but in no event later than the date of expiration of the term of the Options as set forth in § 7 above). To the extent that the Optionee was not entitled to exercise the Options at the date of termination or does not exercise the Options within the time specified in this § 8, the Options will immediately terminate and be cancelled without any payment therefore.

	
(b)  

	
Notwithstanding the provision in this § 8 (a) above, in the event of termination of Optionee’s Continuous Status as an Employee as result of retirement of the Optionee, the Optionee may exercise the Options, to the extent exercisable, within twelve (12) months after the date of such retirement (but in no event later than the date of expiration of the term of the Options as set forth in § 7 above). To the extent that the Optionee was not entitled to exercise the Options or does not exercise the Options within the time specified in this § 8 (b), the Options will immediately terminate and be cancelled without any payment therefore.

	
(c)  

	
Notwithstanding the provision in this § 8 (a) above, in the event of termination of Optionee’s Continuous Status as an Employee due to disability, the Optionee may exercise the Options to the same extent as the Optionee would have been entitled to if the Optionee had remained in Continuous Status as an Employee for a period of twelve (12) months after the date on which Optionee ceased employment as a result of the disability. Such exercise must occur within eighteen (18) months from the date on which Optionee ceased employment as a result of disability (but in no event later than the date of expiration of the term of the Options as set forth in § 7 above). To the extent that the Optionee was not entitled to exercise the Options or does not exercise the Options within the time specified in this § 8 (c), the Options will immediately terminate and be cancelled without any payment therefore.

 

  

  

  

 

	
(d)  

	
Notwithstanding the provisions in this § 8 (a) above and § 11 below, in the event of the death of Optionee:

	
  

	
(i)

	
if Optionee is, at the time of death, an Employee of the Company, the Options may be exercised, at any time within six (6) months following the date of death (but in no event later than the date of expiration of the term of the Options as set forth in § 7 above), by Optionee’s estate or by a person who acquired the right to exercise the Options by bequest or inheritance, to the same extent as the Optionee would have been entitled to had the Optionee continued living and remained in Continuous Status as an Employee for a period of twelve (12) months after the date of death; or

	
  

	
(ii)

	
if, at the time of death, these Options has not yet expired but Optionee’s Continuous Status as an Employee terminated prior to the date of death, the Options may be exercised, at any time within six (6) months following the date of death (but in no event later that the date of expiration of the term of the Options as set forth in § 7 above), by Optionee’s estate or by a person who acquired the right to exercise the Options by bequest or inheritance, but only to the extent the Options were exercisable at the time the Optionee’s Continuous Status as an employee terminated.

	 	
(iii)

	
To the extent that the Optionee was not entitled to exercise the Options or does not exercise the Options within the time specified in this 8 (d) (i and ii), the Options will immediately terminate and be cancelled without any payment therefore.

	
§ 9

	
Exercise of Options, shareholder’s right etc.

Exercise of the Options results in that the Company or a party appointed by the Company, on behalf of the Optionee, immediately exercises Warrants and delivers Shares to the Optionee. Optionee is not under any circumstances entitled to receive the right to dispose of Warrants in any other way than exercise of Warrants and subscriptions of Shares.

The Options may be exercised, to the extent possible to exercise, wholly or partially, however not for less than 100 Warrants per exercise or in whole should this be less than 100 Warrants. Exercise is executed on the 1st in each month. In the event the 1st falls on a Saturday or Sunday or Swedish bank holiday, exercise is executed on the next business day thereafter for banks in Sweden.

Options shall be exercised by delivering a written notice to the Company in accordance with instructions provided by the Board. The Board shall have the right to determine the exercise procedure, including appointment of a broker and/or bank(s) through which the exercise can be made. The Board shall also have the right to change the exercise procedure for any reason.

At exercise the Optionee must pay the Exercise Price to acquire Warrants and the Subscription Price of Warrant. The Company will provide the Optionee with exercise details.

The Optionee does not have any rights as a shareholder in relation to Shares acquired through exercise of the Options before the Optionee is registered as holder of the Shares with VPC AB (the Swedish Securities Register Center). The right to dividend on Shares is regulated in appendix A.

 

  

  

  

 

	
§ 10

	
Taxes and Other Fees

The Optionee shall be responsible for the payment of taxes and/or fees which may be payable in respect of the granting, holding or exercise of Options, as a consequence of Swedish or foreign legislation or decisions of Swedish or foreign governmental authorities. The Option grant shall be subject to all applicable tax withholding requirements. The Company and its Affiliates shall have the right to require the Optionee entitled to acquire Warrants/Shares to remit to the Company, prior to the delivery of any Shares and/or Warrants, any amount sufficient to satisfy any foreign, federal, state or local tax withholding requirements. Prior to the Company’s determination of such withholding liability, the Board may, in its sole discretion, permit the Optionee to make an irrevocable election to satisfy, in whole or in part, such obligation to remit taxes, by directing the Company to withhold Shares and/or Warrants that would otherwise be received by such individual. The Company and its Affiliates shall have the right to deduct from all cash payments made pursuant any applicable agreement any foreign, federal, state or local taxes required to be withheld with respect to such payments. If required, the Company and its Affiliates shall also have the right to withhold taxes and/or fees related to the Options from any other cash payments made to the Optionee such as salary payments, bonus payments, pension payments etc.

	
§ 11

	
Non-transferability of Options

Unless otherwise provided by the Board, the Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution as specified in § 8 (c) below and may be exercised, during the lifetime of Optionee, only by Optionee. In case of the Optionee’s death, the transfer restrictions do apply also for the estate or person who has acquired the right to exercise the Options.

	
§ 12

	
Change in Control

Notwithstanding the provisions in § 6 above in case of a Change in Control;

	
(a)  

	
the Optionee shall have a right to immediately exercise the Options as from the date when the Optionee is given notice of such right and as to all Warrants/Shares subject to the Options or as to the number of Warrants/Shares the Optionee elects to acquire. Such exercise must occur within three (3) months after the date of notice of the right to exercise in accordance with this section (a) (but in no event later than the date of expiration of the term of the Options as set forth in § 7 above). To the extent that the Optionee does not exercise the Options within the time specified in this § 12, the Options will terminate and be cancelled without any payment therefore.

	
(b)  

	
The Optionee is, notwithstanding § 11 above, obligated, on request from the Company, to sell the Options as well as any Shares acquired through exercise of the Options, to the Company or a party appointed by the Company on market terms.

  

  

  

	
§ 13

	
Adjustments Upon Changes in Capitalization or Merger

Since the Options formally entitles the Optionee to acquire Warrants no adjustment of the number or price of Warrants subject to an Option shall be made in case of changes in the number of outstanding Shares and/or the share capital of the Company. Instead adjustment is made of the outstanding Warrants in accordance with the adjustment provisions for the Warrants. However, if such an adjustment leads to unreasonable effects, an adjustment shall also be made of the number of Warrants subject to the Options and/or the price to acquire Warrants with the purpose of attaining a reasonable compensation in relation to the shareholders of the Company.

In the event of the proposed dissolution or liquidation of the Company, the Options will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board. The Board may, in the exercise of its sole discretion in such instances, declare that the Options shall terminate as of a date fixed by the Board and give each Optionee the right to exercise the Options as to all or any part of the Warrants/Shares, including Warrants/Shares as to which the Options would not otherwise be exercisable. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, the Options shall be assumed or equivalent options shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless such successor corporation does not agree to assume the Options or to substitute equivalent options, in which case the Board shall, in lieu of such assumption or substitution, provide for the Optionee to have the right to exercise the Options as to all of the Warrants/Shares, including Warrants/Shares as to which the Options would not otherwise be exercisable. If the Board makes the Options fully exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Board shall notify the Optionee that the Options shall be fully exercisable for a period of fifteen (15) days from the date of such notice, and the Options will terminate upon the expiration of such period.

	
§ 14

	
Substitutions and Assumptions

The Board shall have the right to substitute or assume the Options in connection with merger, reorganizations, separations, or other transactions. Such Substitution or Assumption shall be made in accordance with conditions on the market.

	
§ 15

	
No Employment Right

The granting of Options in accordance with these terms or the Stock Option Grant Agreement is made at the sole discretion of the Company. The Optionee shall have no right to receive future Options. Nothing in these terms or the Stock Option Grant Agreement shall confer upon the Optionee any right with respect to continuation of employment with the Company, nor shall it interfere in any way with the Optionee's right or the Company's right to terminate or alter the terms and conditions of the employment relationship at any time. The Options shall not constitute part of the Optionee’s employment contract with the Company or any Affiliate and, accordingly the Options shall not be included in the basis for any pension rights, severance payments, damages or other benefit or compensations from the Company or any Affiliate.

  

  

  

	
§ 16

	
Notices

All notices and other communications under these terms and the Stock Option Grant Agreement shall be in writing and shall be deemed given on date of delivery, if delivered personally or by commercial delivery service, or five (5) business days after mailing, if mailed by registered or certified mail (return receipt requested) or, upon transmission, if sent via facsimile (with confirmation of receipt) to the parties at the addresses stated in the Stock Option Grant Agreement (or at such other address for a party as shall be specified by like notice).

	
§ 17

	
Amendments

The Company may without consent from the Optionee amend these terms and conditions and the Stock Option Grant Agreement to the extent legislation, court practice, authority regulations so require or in any other case – without significantly interfere with the rights of the Optionee in accordance with these terms and the Stock Option Grant Agreement – if it is appropriate or necessary for practical or economical reasons. The Company may also make other adjustments if significant changes in the Company or its Affiliates or its circumstances would result in a situation where the decided terms and conditions for the stock options become inappropriate to use. Amendment of these terms and conditions and the Stock Option Grant Agreement of other reasons may only be made by agreement in writing between the parties.

	
§ 18

	
Acknowledgement

By Optionee’s acceptance of the Stock Option Grant Agreement, Optionee acknowledges receipt of copies of these terms and “Villkor för Modern Times Group MTG AB:s (publ) optionsrätter 2007/2012” (English: “Term and conditions for Modern Times Group MTG AB’s (publ) warrants 2007/2012”). Optionee understands and agrees that the Options are subject to all the terms, conditions, and restrictions stated in these terms and in the Stock Option Grant Agreement as well as in the term document referenced in the preceding sentence.

	
§ 20

	
Governing Law

These terms and conditions and relating legal matters shall be governed by Swedish law. Any action, claim or appeal with respect to these warrants shall be brought before the Stockholm District Court or other such forum that is accepted by the company in writing.

_____________________________________Exhibit 4.4

2009 LONG TERM INCENTIVE PLAN

The 2009 performance based incentive plan (the “Plan”) is proposed to in total include approximately 50 senior executives and other key employees within the Group. The participants in the Plan are required to own shares in MTG. These investment shares can either be shares already held or shares purchased on the market directly in connection with the notification to participate in the Plan. Thereafter the participants will be granted, by the company free of charge, rights to retention shares and performance shares on the terms stipulated below.

The personal investment

In order to participate in the Plan, the employees have to own MTG shares. The maximum number of shares which the employee may invest under the Plan will correspond to a value of approximately 5-8 per cent of the employee’s annual base salary.

For each share invested under the Plan, the participants will be granted retention rights and performance rights by the Company. Subject to fulfilment of certain retention and performance based conditions during the period 1 April 2009 – 31 March 2012 (the “Measure Period”), the participant maintaining employment within the Group at the date of the release of MTG’s interim report for the period January – March 2012, and subject to the participant maintaining the invested shares, each retention right and performance right will entitle the participant to receive one Class B share. Dividends paid on the underlying share will increase the number of rights being allotted in order to treat the shareholders and the participants equally.

Performance conditions

The retention rights and performance rights are divided into Series A: retention shares and Series B - C: performance shares.

The number of shares to be received by exercising rights depends on the fulfilment of the following retention and performance based conditions during the Measure Period:

	
Series A

	
MTG’s total shareholder return on the Class B shares (TSR) exceeding 0 per cent as entry level (no stretch target)

	
Series B

	
MTG’s average normalised return of capital employed (ROCE) of 13 per cent as entry level and 23 per cent as stretch target

	
Series C

	
MTG’s total shareholder return on the Class B shares (TSR) equal to a peer group including CME, ITV, M6, Mediaset, ProSieben, RTL Group, Sky, TF1 and TVN as the entry level and 10 percentage points better than the peer group as the stretch target

The determined levels in the performance based conditions are “entry level” and “stretch target” with a linear interpolation applied between those levels. If entry level is reached the number of rights exercisable is proposed to be twenty per cent. The entry level constitutes the minimum level which must be exceeded in order to enable exercise of part of the rights. Vesting of the retention rights and performance rights is initiated only if a defined entry level is exceeded. If the entry level is not exceeded all rights to retention and performance shares in that series will lapse. If a stretch target is met, all retention rights and performance rights remain exercisable in that series.

  

 

  

The right to retention shares and performance shares

The rights to retention shares and performance shares shall be governed by the following terms

and conditions:

	
  

	
·

	
Granted free of charge on or around 1 June 2009. The Board of Directors shall be authorised to make allotments within the scope of the incentive programmes in connection with recruitments that have been carried out after the first allotment, however no later than on 31 December 2009.

	
  

	
·

	
May not be pledged, transferred or disposed.

	
  

	
·

	
May be exercised the day following the release of the interim report for the period January – March 2012.

	
  

	
·

	
Dividends paid on the underlying share during the vesting period will increase the number of retention and performance shares being allotted in order to treat the shareholders and the participants equally.

	
  

	
·

	
May only be exercised provided that the holder is still employed by the Group and has maintained the personal investment during the vesting period.

Preparation and administration

The Board of Directors, or a committee established by the Board for these purposes, shall be responsible for preparing the detailed terms and conditions of the Plan, in accordance with the mentioned terms and guidelines. To this end, the Board of Directors shall be entitled to make adjustments in the Plan to meet foreign regulations or market conditions. The Board of Directors may also make other adjustments if significant changes in the Group, or its circumstances, result in a situation where the decided terms, targets and conditions for investing, vesting and for the possibility to exercise the rights under the incentive programme, become unsuitable to use.

Allocation

In total, the Plan is estimated to comprise up to 43,225 shares held by the employees entitling participants to rights of up to 43,225 retention shares and 217,900 performance shares. The participants are divided into five different groups. The Plan will comprise the following number of invested shares and the maximum number of rights in accordance with the above mentioned principles and assumptions:

	
  

	
·

	
for the CEO; up to 7,000 shares and 8 rights per invested share (Series A: 1.0 rights and Series B-C: 3.5 rights per Series);

	
  

	
·

	
for approximately eight members of the senior executives (category 1); up to 2,000 shares each and 6.5 rights per invested share (Series A: 1.0 rights and Series B-C: 2.75 rights per Series);

	
  

	
·

	
for approximately nine senior executives and/or key employees (category 2); up to 1,000 shares each and 5 rights per invested share (Series A: 1.0 rights and Series B-C: 2.0 rights per Series);

	
  

	
·

	
for approximately 19 senior executives and/or key employees (category 3); up to 425 shares each and 5 rights per invested share (Series A: 1.0 rights and Series B-C: 2.0 rights per Series); and

	
  

	
·

	
for approximately 14 senior executives and/or key employees (category 4); up to 225 shares each and 5 rights per invested share (Series A: 1.0 rights and Series B-C: 2.0 rights per Series).

  

2

  

Scope and costs of the programme

The Plan will be accounted for in accordance with IFRS 2 which stipulates that the rights should be recorded as a personnel expense in the income statement during the vesting period. Based on the assumptions that the share price is SEK 159.50 (closing share price of the MTG Class B share on 3 April 2009) at the time of allocation, that each participant makes the maximum personal investment, and that the annual employee turnover is 10 per cent among the participants of the programme, an average fulfilment of performance conditions of approximately 50 per cent and full award of retention share, the total cost, exclusive of social security costs, for the programme is estimated to approximately SEK 15 million before tax. The cost will be allocated over the years 2009-2012.

Social security costs will also be recorded as a personnel expense in the income statement in accordance with generally accepted accounting principles. The social security costs are estimated to be around SEK 5 million with the assumptions above and an average social security tax rate of 23 per cent and an annual share price increase of 10 per cent.

The participant’s maximum profit per right in the Plan is SEK 655, which corresponds to five times the average closing share price of the MTG Class B shares during February 2009 (SEK 131). If the value of right exceeds SEK 655, the number of shares each right entitles the employee to receive will be reduced accordingly. The maximum dilution, taking into consideration delivery of shares to the participants and the issues of shares for the purpose of hedging social security costs, is 0.6 per cent in terms of shares outstanding, 0.2 per cent in terms of votes and 0.1 per cent in terms of the estimated programme cost as defined in IFRS 2 divided by the Company’s market capitalisation. Assuming that a maximum gain of SEK 655 per right is achieved, all invested shares are held according to Plan and a 100 per cent fulfilment of retention and performance based conditions are met the maximum cost for the programme is approximately SEK 27 million in accordance with IFRS 2 and the maximum cost for social charges approximately SEK 42 million.

Effect on certain key ratios

The impact on basic earnings per share if the programme had been introduced in 2008 with the assumptions above would result in a dilution of 0.2 per cent or from SEK 43.25 to SEK 43.18 on a proforma basis.

The annual cost of the programme including social charges is estimated to be approximately SEK 7 million assuming the above assumptions. This cost can be related to the Company’s total personnel costs, including social charges, of SEK 1,362 million in 2008.

Delivery of shares under the Plan

To ensure the delivery of Class B shares under the Plan, the Board of Directors proposes that the Annual General Meeting authorises the Board to resolve on a directed issue of Class C shares to Nordea Bank AB (publ), and an authorisation for the Board of Directors to subsequently resolve to repurchase the Class C shares from Nordea Bank AB (publ). The Class C shares will then be held by the Company as treasury shares during the vesting period, where after the appropriate number of Class C shares will be reclassified into Class B shares and subsequently be delivered to the participants under the Plan.

The Board of Directors also intends to hedge the social security costs by issuing Class C shares, which after reclassification into Class B shares will be sold on Nasdaq OMX Stockholm. Any decision to sell shares for the purpose of hedging social security costs will be put forward at the Annual General Meeting 2011.

 

 

3

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