May 21, 2012 GENERAL MEMORANDUM OF AGREEMENT OF AUGUST 1, 2012 between ALLIANCE OF MOTION PICTURE & TELEVISION PRODUCERS and INTERNATIONAL ALLIANCE OF THEATRICAL STAGE EMPLOYEES, MOVING PICTURE TECHNICIANS, ARTISTS AND ALLIED CRAFTS OF THE UNITED STATES, ITS TERRITORIES AND CANADA FOR THE PRODUCER-I.A.T.S.E. BASIC AGREEMENT AND WEST COAST STUDIO LOCAL AGREEMENTS This Memorandum of Agreement is entered into as of August 1, 2012 between the International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, its Territories and Canada (hereinafter referred to as the "IATSE"), on its own behalf and on behalf of its respective signatory West Coast Studio Locals (hereinafter referred to as "Locals" and listed on Exhibit "A" attached hereto), (such International Alliance and Locals being referred to individually as the "Union" and collectively as the "Unions"), on the one hand, and the Alliance of Motion Picture & Television Producers (hereinafter "AMPTP") on behalf of those Producers which have effectively consented, in writing, to be part of the single multi-employer bargaining unit (each hereinafter respectively referred to as the "Producer" and collectively referred to as the "Producers" and listed on Exhibit "B" attached hereto), on the other hand. This Memorandum of Agreement reflects the complete understanding reached between the parties. As soon as practicable, this Memorandum of Agreement will be reduced to formal contract language. This Memorandum of Agreement is not contract language, except where the context clearly indicates otherwise. EFFECT OF CHANGES All of the provisions of the current collective bargaining agreements between these parties shall remain the same unless otherwise specifically changed as noted herein or by the negotiations of Local Agreements. The appropriate provisions herein shall be incorporated in the “Wage Scales, Hours of Employment and Working Conditions” of the West Coast Studio Local Agreements (referred to as the "Local Agreements") and/or in the Producer-I.A.T.S.E. Basic Agreement (referred to as "the Basic Agreement"), unless otherwise specifically provided. The provisions herein shall be effective as of August 1, 2012, unless a contrary date is specified, in which case such provision shall be effective as of the date so specified. Ratification of this General Memorandum and the Local Agreements subject hereto constitutes ratification of all Local and General issues. -1- G :\data\w pdata\IATSE\2012\N egs\M O A\M O A G eneral 5-21-12.w pd In consideration of the mutual agreements herein contained, the parties hereto agree as follows: 1. Term The term of the Basic Agreement and the West Coast Studio Local Agreements shall be for three years, beginning August 1, 2012 and terminating on July 31, 2015. 2. Wages Minimum contract wage rates shall be increased by two percent (2%) effective July 29, 2012; by an additional two percent (2%) effective August 4, 2013; and by an additional two percent (2%) effective August 3, 2014. These increases shall be compounded. 3. Health Plan a. Contributions to Active Employees Fund of the Health Plan Modify Article XII(b) of the Basic Agreement by increasing the current hourly Producer contribution rate to the Active Employees Fund by $1.00 per hour effective July 29, 2012. b. Health Plan Premium The bargaining parties agree to recommend to the Directors of the Health Plan the establishment of the following employee-paid premium, to be paid on a quarterly basis, effective January 1, 2013, for eligible participants in the Active Employees Fund: $0 per month for a participant without enrolled dependents; $25 per month for a participant who enrolls one (1) dependent; and $50 per month for a participant who enrolls two (2) or more dependents. c. Reallocation of 30.5 Cents From IAP to Active Employees Fund of the Health Plan i. Reallocate to the Active Employees Fund the thirty and five-tenths cents ($0.305) per hour Producer contribution to the Motion Picture Industry Individual Account Plan (“IAP”) for each hour worked by or guaranteed an employee effective July 29, 2012. ii. The bargaining parties agree to recommend to the Directors of the Pension and Health Plans that those employees employed under a collective bargaining agreement for which contributions are due to the Health Plan who do not participate in the IAP or who do not reallocate to the Active Employees Fund the thirty and five-tenths cents ($0.305) per hour IAP contribution immediately following the established expiration date of such collective bargaining agreement on or after July 31, 2012, regardless of whether such agreement is extended, be required to pay the following -2- G :\data\w pdata\IATSE\2012\N egs\M O A\M O A G eneral 5-21-12.w pd premium on a quarterly basis, effective on the day after expiration of such collective bargaining agreement, but not earlier than January 1, 2013: $35 per month for a participant; $60 per month for a participant who enrolls one (1) dependent; and $85 per month for a participant who enrolls two (2) or more dependents. 4. 5. Pension Plan a. The bargaining parties agree to recommend to the Directors of the Pension Plan that the MPIPP provide a thirteenth and fourteenth check on or about November 1 of each year of the Agreement to those retirees who retired prior to August 1, 2009, provided that: (i) at least eight (8) months of reserves exist in each of the Active Employees Fund and the Retired Employees Fund at that time; (ii) the Plan is certified to be in the Green Zone in the calendar year in which the check(s) are paid; and (iii) to remain in compliance with the Pension Relief Act of 2010, the Plan actuary provides the Plan with a certification each year that satisfies the requirements of Internal Revenue Code Section 431(b)(8)(D)(i), including but not limited to a certification each year that the thirteenth and fourteenth checks are funded by additional contributions not previously allocated to the Plan. b. The bargaining parties agree to recommend to the Directors of the Pension Plan to change the fixed amortization schedule for all unfunded liabilities from fifteen (15) years to sixteen (16) years effective January 1, 2013. Evaluation of Savings of Certain Deficit Reduction Measures On an annual basis beginning July 1, 2013, the consultant for the Health Plan shall determine the level of savings realized from (a) the switch from Blue Shield to Anthem; (b) the repricing of the Medco contract; and (c) the value of the premium implemented on January 1, 2013. 6. Contingent Reallocation of Wage Increases Or Contributions from IAP to Health Plan a. Replace the second and third paragraphs of Article XII(b) of the IATSE Basic Agreement with the following: “Commencing with the quarter ending September 30, 2012 and at the end of every subsequent calendar quarter during the term of this Agreement, the consultants for the Health and Pension Plans shall project the level of reserves in the Active Employees Fund for the term of the Agreement. “If, at any time during the term of this Agreement, the consultants project that the level of reserves in the Active Employees Health Fund will fall below six (6) months, or that the level of reserves in the Retired Employees Plan will fall below eight (8) months, then the IATSE will reallocate up to one percent -3- G :\data\w pdata\IATSE\2012\N egs\M O A\M O A G eneral 5-21-12.w pd (1%) from wages and/or the Individual Account Plan, or any combination thereof, until such time as the reserves are restored to the six (6) or eight (8) month level, as applicable. It is understood that this may occur more than once during the term of this Agreement.” b. Modify Paragraph (f) of Article XII of the IATSE Basic Agreement to provide as follows: “(f) During the period August 1, 2012 to and including July 31, 2015:August 1, 2009 to and including July 31, 2012, “Except for (i) eligibility standards, which shall be maintained at the level in effect on August 1, 2011, and (ii) the usual, customary and reasonable (UCR) schedules, which shall be maintained at the level in effect immediately following the replacement of INGENIX schedules in effect on August 1, 2009, all other benefits (including the bank of hours provision and dental and vision benefits) benefits under the Active Employees Fund (including the current bank of hours provision, eligibility standards, dental and vision benefits and INGENIX schedules operative as of August 1, 2009), shall be maintained at the level in effect on August 1, 2009 in the following manner: “If, at any time during the term of this Agreement, the level of reserves in the Active Employees Fund Health Plan drops below eight (8) months, the Trustees, in conjunction with the Plan consultants, shall review the projections as to future reserve levels. If the consultants project, taking into account a reasonable amount of Supplemental Markets income, that the level of reserves in the Active Employees Fund will fall below six (6) months during the term of this Agreement, the following steps shall be taken: “(1) First, monies received from Post '60s payments in excess of the amount needed to fund the additional check(s) for retired employees, as provided in Article XIII(f)(2) of the 2000, 2003, and 2006 and 2009 Producer-I.A.T.S.E. Basic Agreements, and in excess of the amount needed for an eight (8) month level of reserves in the Retired Employees Fund, shall be allocated to the Active Employees Fund; “(2) Thereafter, if the consultants project, taking into account a reasonable amount of Supplemental Markets income, that the level of reserves will drop below four (4) months during the term of this Agreement, then employer contributions will be increased to the amount and for such time as is necessary to create a four (4) month reserve level for the maintained benefits.” Make conforming changes in the IATSE Basic Agreement. In addition, the bargaining parties agree to recommend to the Directors of the Health Plan to modify the Trust documents as appropriate in accordance with the foregoing. -4- G :\data\w pdata\IATSE\2012\N egs\M O A\M O A G eneral 5-21-12.w pd c. Add the following to the end of Article XIV(a) of the IATSE Basic Agreement to provide: “It is agreed and recommended that as a matter of funding policy, the Directors of the Health Plan shall continue to maintain the level of reserves in the Retired Employees Fund at eight (8) months at all times during the term of the Agreement. “Commencing with the quarter ending September 30, 2012 and at the end of every subsequent calendar quarter during the term of this Agreement, the consultants for the Health and Pension Plans shall project the level of reserves in the Retired Employees Fund for the term of the Agreement.” d. Modify Article XIV(f) of the IATSE Basic Agreement to provide as follows: “(f) “During the period August 1, 2012 to and including July 31, 2015: August 1, 2009 to and including July 31, 2012, “Except for (i) the Coordination of Benefits rules adopted on March 28, 2011 and made retroactive to January 1, 2011, which shall be maintained at the level in effect as of January 1, 2011, and (ii) the usual, customary and reasonable (UCR) schedules, which shall be maintained at the level in effect immediately following the replacement of the INGENIX schedules in effect on August 1, 2009, all other benefits (including dental and vision benefits) under the Retired Employees Fund (including dental and vision benefits and INGENIX schedules operative as of August 1, 2009) shall be maintained at the level in effect on August 1, 2009, so long as it is prudent to do so, in the following manner: “The consultants for the Health Plan shall project the level of reserves in the Retired Employees Plan on a quarterly basis during the term of the 2009 Agreement. If the consultants project, taking into account a reasonable amount of Post ‘60s income, that: (1) the reallocation of contributions from the Individual Account Plan as provided in Article XII(b) above will not restore the level of reserves in the Retired Employees Fund to eight (8) months during the term of the Agreement; and (2) the level of reserves will fall below four (4) months during the term of this Agreement, then employer contributions will be increased to the amount and for such time as is necessary to create a four (4) month reserve level for the maintained benefits.” Make conforming changes in the IATSE Basic Agreement. In addition, the bargaining parties agree to recommend to the Directors of the Health Plan to modify the Trust documents as appropriate in accordance with the foregoing. -5- G :\data\w pdata\IATSE\2012\N egs\M O A\M O A G eneral 5-21-12.w pd 7. MPIPHP Assumption Agreement Change “may” to shall” in the first sentences of Articles XIX(b)(8) and XXVIII(b)(11) of the Basic Agreement, as follows: a. First sentence of Article XIX(b)(8): “(8) If the Producer shall sell, assign, transfer or otherwise dispose of the distribution rights to such motion picture on free television, or shall license the distribution rights to the motion picture on free television, Producer shall may obtain from the buyer, licensee or distributor a separate agreement, made expressly for the benefit of the Retired Employees Fund, as herein provided, requiring such buyer, licensee or distributor to comply with the provisions of this Article XIX.” b. First sentence of Article XXVIII(b)(11): “(11) If the Producer shall sell, assign, transfer or otherwise dispose of the distribution rights to such motion picture in such Supplemental Markets, or shall license the distribution rights to the motion picture in such Supplemental Markets, Producer shall may obtain from the buyer, licensee or distributor a separate agreement, made expressly for the benefit of the Health Plan, requiring such buyer, licensee or distributor to comply with the provisions of this Article XXVIII.” -6- G :\data\w pdata\IATSE\2012\N egs\M O A\M O A G eneral 5-21-12.w pd 8. Basic Cable Productions Add the following Sideletter re Basic Cable Productions to the Basic Agreement and the West Coast Studio Local Agreements: As of August 1, 2012 Matthew D. Loeb International President International Alliance of Theatrical Stage Employees and Moving Picture Technicians, Artists and Allied Crafts of the United States, its Territories and Canada 1430 Broadway, 20th Floor New York, New York 10018 Re: Productions Made for Basic Cable Dear Matt: The following terms and conditions shall apply to productions made for basic cable: Employees working on the pilot or first season of any series produced for basic cable shall be subject to the terms and conditions of the Long-Form Television Sideletter to the Agreement. Employees working on the second and subsequent seasons of any such series shall be subject to the terms and conditions of the New One-Hour Series Sideletter to the Agreement (except that the reference in subparagraph a. of that Sideletter to “the first two (2) production seasons” shall be changed to “the second and third production seasons” and the references in subparagraphs b. and c. of that Sideletter to “the first year” and “the second year” shall be changed to “the second year” and “the third year,” respectively). Sincerely, Carol A. Lombardini ACCEPTED AND AGREED: ____________________________________ Matthew D. Loeb International President -7- G :\data\w pdata\IATSE\2012\N egs\M O A\M O A G eneral 5-21-12.w pd 9. Made-For-Home Video Productions Add the following Sideletter re Made-For-Home Video Productions to the Basic Agreement and the West Coast Studio Local Agreements: As of August 1, 2012 Matthew D. Loeb International President International Alliance of Theatrical Stage Employees and Moving Picture Technicians, Artists and Allied Crafts of the United States, its Territories and Canada 1430 Broadway, 20th Floor New York, New York 10018 Re: Made-For-Home Video Productions Dear Matt: This will memorialize the agreement reached in the 2012 negotiations that a Producer may elect, on a production-by-production basis, to use the terms of either the Long-Form Television Sideletter or the Theatrical Low Budget Agreement for employees employed under the Basic Agreement on made-for-home video productions; provided, however, a Producer electing the Theatrical Low Budget Agreement: (1) shall not be entitled to use the Ultra Low Budget provisions thereof, and, instead, Tier One shall apply to all madefor-home video productions budgeted at $5 million or under and (2) shall pay the applicable Production Cities rates to employees represented by Locals 600, 700 and 800, even if those employees are employed outside the Production Cities. Sincerely, Carol A. Lombardini ACCEPTED AND AGREED: ____________________________________ Matthew D. Loeb International President 10. Studio Zone Modify Paragraph 21 of the West Coast Studio Local Agreements as applicable (and make conforming changes, including by modifying all studio zone maps) and Article XXIX of the IATSE Basic Agreement to expand the studio zone to include Agua Dulce, Castaic (including Lake Castaic), Leo Carillo State Beach, Ontario International Airport, Piru and Pomona (including the Los Angeles County Fair Grounds). -8- G :\data\w pdata\IATSE\2012\N egs\M O A\M O A G eneral 5-21-12.w pd 11. Sunset Clauses a. Renew the Sideletter re Productions Made for New Media in the IATSE Basic Agreement for the term of the 2012 Agreement. b. Renew the Sideletter re Exhibition of Motion Pictures Transmitted via New Media in the IATSE Basic Agreement for the term of the 2012 Agreement. c. Renew the Industry Experience Roster Safety Requirement Training program for the term of the 2012 Agreement. (See second paragraph of Article XXV(a) on page 56 of 2009 IATSE Basic Agreement.) FOR THE ALLIANCE OF MOTION PICTURE & TELEVISION PRODUCERS, ON BEHALF OF THE COMPANIES LISTED ON EXHIBIT "B" ATTACHED HERETO AND THOSE PRODUCERS WHICH HAVE EFFECTIVELY CONSENTED TO BE PART OF SAID MULTI-EMPLOYER BARGAINING UNIT __________________________________________ Date:_______________________________ Carol A. Lombardini, President FOR THE INTERNATIONAL ALLIANCE OF THEATRICAL STAGE EMPLOYEES AND MOVING PICTURE TECHNICIANS, ARTISTS AND ALLIED CRAFTS OF THE UNITED STATES AND CANADA __________________________________________ Date:_______________________________ Matthew D. Loeb, International President -9- G :\data\w pdata\IATSE\2012\N egs\M O A\M O A G eneral 5-21-12.w pd May 9, 2012 MEMORANDUM OF AGREEMENT OF OCTOBER 1, 2012 FOR THE PRODUCER – I.A.T.S.E. AND M.P.T.A.A.C. SUPPLEMENTAL DIGITAL PRODUCTION AGREEMENT This Memorandum of Agreement is entered into between the International Alliance of Theatrical Stage Employees and Moving Picture Technicians, Artists and Allied Crafts of the United States, its Territories and Canada, on the one hand, and the Alliance of Motion Picture and Television Producers, on behalf of those Producers listed on Exhibit “A” attached hereto and those Producers which have effectively consented to be part of the single multi-employer bargaining unit, on the other hand, and reflects the complete understanding reached between the parties as to the terms of the successor Agreement to the Producer-I.A.T.S.E. and M.P.T.A.A.C. Supplemental Digital Production Agreement of 2009 (“the 2009 Digital Agreement”). All of the terms and conditions of the 2009 Digital Agreement shall remain unchanged, except as modified below and subject to conforming changes: 1. Term The term of the Digital Agreement shall be for three (3) years, commencing on October 1, 2012 and terminating on September 30, 2015. 2. Wage Rates a. Minimum wage rates for employees employed on digital recordings to which the wage scales in the Producer-I.A.T.S.E. Basic Agreement and the West Coast Studio Local Agreements apply, including those wage rates set forth in subparagraph (d) of the Digital Agreement and those wage rates appended to the Digital Agreement, shall be increased by two percent (2%) effective July 29, 2012, by an additional two percent (2%) effective August 4, 2013, and by an additional two percent (2%) effective August 3, 2014. These increases shall be compounded. b. Minimum wage rates for employees employed on digital recordings to which the wage scales in the Producer-I.A.T.S.E. and M.P.T.A.A.C. Videotape Electronics Supplemental Basic Agreement apply shall be increased by two percent (2%) effective September 30, 2012, by an additional two percent (2%) effective September 29, 2013, and by an additional two percent (2%) effective September 28, 2014. These increases shall be compounded. -1 - G:\data\wpdata\IATSE\DIGITAL\2012\MOA\Digital 5-9-12.wpd 3. Effective Date of Pension and Health Provisions a. b. c. 4. The $1.00 per hour increase in the current Producer contribution rate to the Active Employees Fund shall be effective: i. On July 29, 2012 for employees employed on digital recordings to which the wage scales in the Producer-I.A.T.S.E. Basic Agreement and the West Coast Studio Local Agreements apply; and ii. On September 30, 2012 for employees employed on digital recordings to which the wage scales in the Producer-I.A.T.S.E. and M.P.T.A.A.C. Videotape Electronics Supplemental Basic Agreement apply. The reallocation to the Active Employees Fund of the thirty and five-tenths cents ($0.305) per hour Producer contribution to the Motion Picture Industry Individual Account Plan (“IAP”) for each hour worked by or guaranteed an employee shall be effective: i. On July 29, 2012 for employees employed on digital recordings to which the wage scales in the Producer-I.A.T.S.E. Basic Agreement and the West Coast Studio Local Agreements apply; and ii. On September 30, 2012 for employees employed on digital recordings to which the wage scales in the Producer-I.A.T.S.E. and M.P.T.A.A.C. Videotape Electronics Supplemental Basic Agreement apply. The employee-paid premium to the Health Plan shall be paid on a quarterly basis, effective January 1, 2013, for eligible participants in the Active Employees Fund: $0 per month for a participant without enrolled dependents; $25 per month for a participant who enrolls one (1) dependent; and $50 per month for a participant who enrolls two (2) or more dependents. Contract References for Purposes of Identifying Applicable Wage Scales and Working Conditions (a) The reference in the opening paragraph of the 2009 Digital Agreement to “the 2009 Producer - I.A.T.S.E. Basic Agreement” shall be changed to “the 2012 Producer - I.A.T.S.E. Basic Agreement.” (b) The reference in subparagraph (a) of the 2009 Digital Agreement to “the Videotape Electronics Supplemental Basic Agreement of 2006[sic]” shall be changed to “the Videotape Electronics Supplemental Basic Agreement of 2012.” -2- G:\data\wpdata\IATSE\DIGITAL\2012\MOA\Digital 5-9-12.wpd (c) The reference in subparagraph (b)(1) and (b)(2)(A) and (B) of the 2009 Digital Agreement to “the 2009 West Coast Studio Local Agreements” shall be changed to “the 2012 West Coast Studio Local Agreements.” (d) The reference in subparagraph (l)(1) of the 2009 Digital Agreement to “the 2009 IATSE Videotape Electronics Supplemental Basic Agreement” shall be changed to “the 2012 IATSE Videotape Electronics Supplemental Basic Agreement.” (e) The reference in the subparagraph (l)(2) of the 2009 Digital Agreement to “the 2009 Producer - I.A.T.S.E. Basic Agreement” shall be changed to “the 2012 Producer - I.A.T.S.E. Basic Agreement.” FOR THE ALLIANCE OF MOTION PICTURE & TELEVISION PRODUCERS, ON BEHALF OF THE COMPANIES LISTED IN EXHIBIT “A” ATTACHED HERETO, AND THOSE PRODUCERS WHO HAVE EFFECTIVELY CONSENTED TO BE PART OF THE MULTI-EMPLOYER BARGAINING UNIT DESCRIBED IN THE PRODUCER – I.A.T.S.E. AND M.P.T.A.A.C. BASIC AGREEMENT 0F 2012 Date: Carol A. Lombardini President FOR THE INTERNATIONAL ALLIANCE OF THEATRICAL STAGE EMPLOYEES AND MOVING PICTURE TECHNICIANS, ARTISTS AND ALLIED CRAFTS OF THE UNITED STATES, ITS TERRITORIES AND CANADA Date: Matthew D. Loeb International President -3- G:\data\wpdata\IATSE\DIGITAL\2012\MOA\Digital 5-9-12.wpd