In accordance with Article 167of the Law on Copyright and Related Rights („Official Gazette of the Republic of Serbia“, no. 104/09, 99/11 i 119/12) andArticle17 of the Statute of the Organisation of Phonogram Producers of Serbia – OFPS, Organisation Assembly, at the session onMarch 18th, 2010, at the session on March 26th, 2011, at the session onJanuary 31st, 2013and at the session onJune 21st, 2014, has adopted

DISTRIBUTION PLAN

Fees earned through phonogram use

(REVISED TEXT)

Article 1

Distribution plan includes criteria upon which OFPS distributes to right holders’income as fees collectedfrom broadcasting, re-broadcasting, public communication of phonograms, public communication of broadcast phonograms, as well as from special fees, based on adopted Tariff, and which criteria are based on principles of proportionality, appropriateness and fairness.

Article 2

Right to distribution have the phonogram producers in the territory of Republic of Serbia who have authorised OFPS to collect fees for phonogram use on their behalf and for their account.

Right to distribution also have the phonogram producers in the territory of the Republic of Serbia who have not authorised OFPS to collect fees for phonogram use on their behalf and for their account, in accordance with Article 180 of the Law on Copyright and Related Rights.

Right to distribution have phonogram producers with residence outside the territory of the Republic of Serbia, who have authorised local legal or physical entity to collect fees for phonogram use.

Right to distribution have phonogram producers outside the territory of the Republic of Serbia who are members of foreign organisations for the protection of phonogram producers, with which OFPS has concluded bilateral agreements, based on bilateral agreements.

Distribution rules contained in this Distribution plan are equally implemented to all rights governed by OFPS.

Article 3

Ceases to be valid.

Article 4

Right holder registers the matter of protection with the Organisation in an Excel table which represents part of the Distribution plan and which contains data entered in the previously allocated columns, as follows:

  1. Name of interpreter (full band name, full name and surnameandperformer stage name, if has one);
  2. Phonogram title;
  3. Phonogram duration in seconds;
  4. Year of publication;
  5. Phonogram ownership;
  6. Producer (label);
  7. Ownership commencement date;
  8. Ownership expiration date;
  9. ISRC (if right holders have one);
  10. Country of origin;
  11. Year of first recording;
  12. Phonogram producer.

Filled Excel table is delivered to the Organisation by post, recorded on a CD and with printed list of phonograms being registered, where every page of the list has to be signed, and for legal entities stamped by right holder (authorised person of legal entity).

Right holder is obligated to deliver, with the Excel table (recorded to a CD and with printed list of phonograms being registered) the following forms, which represent part of the Distribution plan:

-form F1D – for registering domestic phonograms by legal entities

-form F1S – for registering foreign phonograms by legal entities

-form F2D – for registering domestic phonograms by physical entities

-form F2S – for registering foreign phonograms by physical entities

Forms from the previous Paragraph must include the following data:

  1. full business name of phonogram producer, name of authorised representative and person filling the form, i.e. authorised person
  2. office of legal entity or place of residence of physical entity
  3. ordinal application number
  4. registration number of legal entity or PIN of physical entity
  5. PIN of legal entity or ID no. for physical entity
  6. excerpt from SBRA (Serbian Business Registers Agency) for legal entities, with data from the register valid at the time of application, for every subsequent application the excerpt is delivered only if the data were changed
  7. OP form (list of authorised persons) for legal entities, valid on the date of application, and for every subsequent year the form is delivered only if authorisations were changed or any other changes occurred
  8. identifying data (phone number, facsimile, e-mail address).

Right holder hereby guarantees, under penalty of perjury, that all data in the form are accurate and true and confirms the authenticity of data by signature and stamp.

Every right holder, to be included in the distribution for a certain year, is under obligation to send an application to the Organisation no later than March 15ththe following year.

In accordance with the Law on Amendments and Supplements of the Law on Copyright and Related Rights („Official Gazette“ of the Republic of Serbia, no. 119/12), commencing January 1st, 2014digital evidence is initialised for broadcasting and re-broadcasting as well as acceptance of digital cue sheets, in accordance with the Government Decree of the Republic of Serbia. Management Board shall adopt, in accordance with the Decree, Regulations for governing the processing of these cue sheets no later than December 31st, 2013.

FUNDS

Article 5

Total fund assets for distribution are determined in a manner where Organisation operation expenses are deducted (total operating expenses), as well as the amount distributed in accordance with an agreement to the organisation for collective rights management of interpreters, from the total gross amount of collected fees. The amount remaining after deduction of Organisation operation expenses (total operating expenses) and after distribution of part of collected unique fee of the organisation for collective management of rights of interpreters represents the Organisation funds for distribution.

10% of assets representing the fund for cultural purposes are deducted from the determined distribution fund.Assets from the fund for cultural purposes are distributed exclusively for broadcasting of domestic phonograms for the purpose of incentive for local artistic creativity, in accordance with the distribution criteria determined by this Distribution plan. Managing Director and Accounting Department are under obligation to deliver to right holders of domestic phonograms beside a substantiated calculation of funds acalculation of funds for cultural purposes.

Distribution fund is determined by the Managing Director and Accounting Department.

Acquired assets based on bilateral agreements with foreign organisations are distributed in accordance with reports of broadcast phonograms delivered by foreign organisations. If reports of broadcast phonograms are not delivered, these assets are included in the fund for the first subsequent distribution and are distributed in accordance with criteria determined by this Distribution plan.

Article 6

Decision on Organisation expenses is adopted by the Managing Board at the beginning of the financial year. Decision on expenses can be changed in accordance with the development policy and investment increase in certain business segments.

Total expenses for the protection of foreign phonograms are determined by agreements which are concluded between the Organisation and foreign organisations and are no subject to limitations under this Article.

INDIVIDUAL DISTRIBUTION

Article 7

Distribution of fees earned from phonogram use is executed based on data acquired from broadcasting organisations in the form of listings of broadcast phonograms (hereinafter: cue sheets).

In the distribution process the Organisation is under obligation to treat equally right holders who have authorised it by agreement to execute collective exercise of related rights of phonogram producers and for those right holders who do not have such an agreement.

Article 7 a

Calculation and distribution of fees earned for used phonograms is executed based on valid cue sheets delivered by foreign broadcasting organisations.

Valid cue sheet is the one containing following elements:

  • Name of interpreter;
  • Phonogram title;
  • Broadcast date;
  • Duration of broadcast phonogram;
  • Note (if the phonogram is broadcast in movies, series, advertisements, trailers, show background, clips, jingles, as well as scene music, sound background...).

Cue sheets are delivered only by digital means, using internet portal for OFPS cue sheets, and based on instructions broadcasters receive in written form from OFPS in accordance with Regulations for registering broadcast phonograms by broadcaster.

Before starting to use the Portal, broadcaster is under obligation to register using the form for user registration containing the following data:

full name of broadcaster, registration type with the SBRA;

channel name for application, with note of whether it is aterrestrial or cable transmission;

name of authorised representative;

broadcaster contact data (address, phone number, e-mail, facsimile);

ID no., PIN;

responsible and authorised persons by broadcaster to fill out and deliver cue sheets and their contact data (e-mail, phone);

signature of authorised representative certified by broadcaster stamp.

Cue sheets are delivered daily, and no later than the 15th of the month for the previous month.

Distribution is based on all valid cue sheets delivered no later than January 31st for the previous year.

If the cue sheets are delivered after the expiration date noted in the previous Paragraph and no later thanMarch 15th for the previous year, Managing Board makes a decision whether the distribution shall be executed based on those cue sheets. Managing Director and the Accounting Department are under obligation to inform the Managing Board about cue sheets delivered after the expiration date within 15 days, starting with March 15th.Managing Board makes a decision as of this Paragraph within 30 days from receiving the notification. If the Managing Board decides to make the distribution based on these cue sheets, it is under obligation to inform the Supervisory Board about it. After expiration of this date no cue sheets subsequently submitted shall be taken into consideration or certificates of broadcasting by broadcaster for the previous year.

Every cue sheet not containing elements from Paragraph 2 shall be treated as invalid. Whether cue sheets are valid and complete is determined by the cue sheet processing department, based on data mentioned in Paragraph 2 of this Article and delivered cue sheets by broadcasting organisations.

In the case where the broadcaster (broadcasting organisation) delivers an invalid cue sheet, technical department is under obligation to inform the broadcaster of the invalid cue sheet, with an explanation of the irregularities and instructions for eliminating determined deficiencies and deliver the corrected cue sheet to the Organisation within 10 days from receipt of the notification.

If for any reason the broadcaster (broadcasting organisation) does not act in accordance with the notification of the technical department processing cue sheets, it shall be understood that the broadcaster has not fulfilled the obligation from Article 187 Paragraph 5 of the Law on Copyright and Related Rights.

Article 7 b

Fees are calculated by splitting the total distribution fund according to collected fees from TV and radio broadcasters in the following manner:

-For TV broadcasters in percentage of total distribution fund corresponding to the percentage of collected fees from TV broadcaster compared to total collected fees (TV fund);

-For radio broadcasters in percentage of total distribution fund corresponding to the percentage of collected fees from radio broadcasters compared to total collected fees from broadcaster (radio fund).

In the case that the legal entity is both TV and radio broadcaster, the assets are distributed according to financial reports of that broadcaster, income of broadcaster (legal entity) from TV and income of broadcaster (legal entity) from radio.

Ratio of collected fees from TV and radio broadcasters is determined by the Managing Director in coordination with technical departments, based on the report from Department for Public Broadcast in relation to collected fees from TV and radio broadcasters. Decision of the Managing Director on determining the ratio of collected fees from TV and radio broadcasters is delivered to the Managing Board within 15 days from the decision date.

Cue sheets received from TV and radio broadcasters are used in the distribution process in accordance with Regulations on registering broadcast phonograms by broadcasters, as well as the Tariff Agreement concluded with a representative society of broadcasters published in the Official Gazette of the Republic of Serbia.

TV Fund is classified in six classes, in the following manner: Class 1a, Class 1b, Class 1c, Class 1d, Class 1e and Class 1f. TV Fund is calculated based on identified undisputed broadcast phonograms.

-Class 1a contains cue sheets delivered from national commercial broadcasters and public broadcasting service. Broadcasting in Class 1a has value of 5 points;

-Class 1b contains cue sheets delivered from broadcasters from region of the City of Belgrade, province commercial broadcasters, province public broadcasting service, as well as cue sheets from commercial broadcasters broadcasting and re-broadcasting programmes via cable, IPTV and satellite signalsthrough DTH platform and have zone of household coverage of over 50%. Broadcasting in Class 1b has value of 4 points;

-Class 1c contains cue sheets of regional, local broadcasters and local public broadcaster service which have zone of coverage of over 100,000 inhabitants, as well as cue sheets of commercial broadcasters broadcasting and re-broadcasting programmes via cable, IPTV and satellite signals through DTH platform and which have zone of household coverage from 25-50%. Broadcasting in Class 1c has value of 3 points;

-Class 1d contains cue sheets of regional, local broadcasters and local public broadcasting service which have zone of coverage from 50,000-100,000 inhabitants, as well as cue sheets of commercial broadcasters broadcasting and re-broadcasting programmes via cable, IPTV and satellite signals through DTH platform and have zone of household coverage from 15-25%. Broadcasting in Class 1d has value of 2 points;

-Class 1e contains cue sheets of regional, local broadcasters and local public broadcasting service which have zone of coverage from 25,000-50,000 inhabitants, as well as cue sheets of commercial broadcasters broadcasting and re-broadcasting programmes via cable, IPTV and satellite signals through DTH platform and which have zone of household coverage from 5-15%. Broadcasting in Class 1e has value of 1 point;

-Class 1f contains cue sheets of regional, local broadcasters and local public broadcasting service which have zone of coverage up to 25,000 inhabitants, as well as cue sheets of commercial broadcasters broadcasting and re-broadcasting programmes via cable, IPTV and satellite signals through DTH platform and which have zone of household coverage up to 5%. Broadcasting in Class 1f has value of 0.5 points.

Radio Fund is classified in six classes in the following manner:Class 2a, Class 2b, Class 2c, Class 2d, Class 2e andClass 2f. Radio Fund is calculated based on identified undisputed phonogram broadcasts.

-Class 2a contains cue sheets delivered by national commercial broadcasters and public broadcasting service. Broadcasting in Class 2a has value of 5 points;

-Class 2b contains cue sheets delivered by broadcasters from region of the City of Belgrade, province commercial broadcasters, province public broadcasting service, as well as cue sheets of broadcasters broadcasting and re-broadcasting programmes via cable, IPTV and satellite signals through DTH platform and have zone of household coverage over 50%. Broadcasting in Class 2b has value of 4 points;

-Class 2c contains cue sheets of regional, local broadcasters and local public broadcaster service which have zone of coverage of over 100,000 inhabitants, as well as cue sheets of commercial broadcasters broadcasting and re-broadcasting programmes via cable, IPTV and satellite signals through DTH platforms and which have zone of household coverage from 25-50%. Broadcasting in Class 2c has value of 3 points;

-Class 2d contains cue sheets of regional, local broadcasters and local public broadcasting service which have zone of coverage from 50,000-100,000 inhabitants, as well as cue sheets of commercial broadcasters broadcasting and re-broadcasting programmes via cable, IPTV and satellite signals through DTH platforms and have zone of household coverage from 15-25%. Broadcasting in Class 2d has value of 2 points;

-Class 2e contains cue sheets of regional, local broadcasters and local public broadcasting service which have zone of coverage from 25,000-50,000 inhabitants, as well as cue sheets of commercial broadcasters broadcasting and re-broadcasting programmes via cable, IPTV and satellite signals through DTH platform and which have zone of household coverage from 5-15%. Broadcasting in Class 2e has value of 1 point;

-Class 2f contains cue sheets of regional, local broadcasters and local public broadcasting service which have zone of coverage up to 25,000 inhabitants, as well as cue sheets of commercial broadcasters broadcasting and re-broadcasting programmes via cable, IPTV and satellite signals through DTH platform and which have zone of household coverage up to 5%. Broadcasting in Class 2f has value of 0.5 points.

Number of broadcasts is aggregated in points in every fund, based on which a total number of points are obtained for every right holder in every fund. Point value is obtained by dividing the distribution amount belonging to a specific fund with the total number of broadcasts in points within a fund.

Thus obtained point value is multiplied by number of broadcasts in points, hence with the acquired sum the right holder participates in every of the funds. Total distribution participation of right holder is acquired from the sum of the amount of each fund. The total percentage by which the right holder participates in the distribution is determined based on the total amount by which the right holder participates in the distribution.

Regional and local broadcasters which have a license for terrestrial broadcasting and determined zone of coverage in their broadcasting license, and at the same time broadcast and re-broadcast via cable, IPTV and satellite signal through DTH platform which enables them to have a larger zone of coverage from the one determined in the broadcasting license, enter the Class with a greater zone of coverage.

Value of phonograms used in clips, jingles, advertisements and marketing videos, shows, trailers, as well as broadcasting phonograms up to 60 seconds duration is calculated as 25% of the value of broadcast phonogram in every Class.

Value of phonograms used as scene music, backgroundmusic etc. is calculated as 25% of the value of broadcast phonograms in every Class.

Coverage of the population by terrestrial broadcasters and household coverage by commercial broadcasters broadcasting and re-broadcasting programmes via cable, IPTV and satellite signal through DTH platform is determined by technical departments of the organisation according to the last official available data of the RBA – Republic Broadcasting Agency, Republic Agency for Digital Communication – RATEL, Republic Institute for Statistics, as well as according to available data from websites of cable, IPTV and satellite providers broadcasting the signal through DTH platform and are based on the territory of the Republic of Serbia and according to operating licenses issued by competent state authority.