CENTRAL EUROPEAN MEDIA ENTERPRISES LTD, DEF 14A, 2000-05-01

CENTRAL EUROPEAN MEDIA ENTERPRISES LTD
DEF 14A, 2000-05-01
TELEVISION BROADCASTING STATIONS

Previous: MORGAN STANLEY DEAN WITTER SPECTRUM TECHNICAL LP, 424B3, 2000-05-01

Next: BISHOP STREET FUNDS, 485BPOS, 2000-05-01

<PAGE>
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)

Filed by the Registrant / /

Filed by a Party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/x/ No fee required

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

<PAGE>

CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

The Annual General Meeting of Shareholders of CENTRAL EUROPEAN MEDIA
ENTERPRISES LTD. (the "Company"), a Bermuda company, will be held at the
Southampton Princess Hotel, South Road, Southampton, Bermuda, on May 25, 2000 at
10:00 A.M., for the following purposes:

1. To elect five directors to serve until the next Annual General
Meeting of Shareholders;

2. To consider and act upon an amendment to the Company's
Bye-laws concerning the indemnification provided by the
Company to the Company's directors and officers;

3. To consider and act upon a proposal to cancel options to
purchase shares of Class A Common Stock previously granted to
Frederic T. Klinkhammer and John A. Schwallie and to grant new
options to purchase shares of Class A Common Stock to Mr.
Klinkhammer and Mr. Schwallie;

4. To receive and adopt the financial statements of the Company
for the Company's fiscal year ended December 31, 1999,
together with the auditors' report thereon; and

5. To appoint Arthur Andersen as auditors for the Company and to
authorize the directors to approve their fee.

The approval and adoption of each matter to be presented to the
shareholders is independent of the approval and adoption of each other matter to
be presented to the shareholders.

Only shareholders of record at the close of business on April 5, 2000 are
entitled to notice of and to vote at the meeting.

By order of the Board of Directors,

NICOLAS G. TROLLOPE
Secretary

Hamilton, Bermuda
May 1, 2000

IMPORTANT: THE PROMPT RETURN OF PROXIES WILL ENSURE THAT YOUR SHARES WILL BE
VOTED. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
<PAGE>
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.

------------------------

PROXY STATEMENT FOR ANNUAL GENERAL MEETING OF SHAREHOLDERS
MAY 25, 2000

------------------------

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
(the "Company" or "CME"), a Bermuda company, for use at the Annual General
Meeting of Shareholders of the Company (the "Meeting") to be held at the
Southampton Princess Hotel, South Road, Southampton, Bermuda, on May 25, 2000,
at 10:00 A.M., and at any adjournments thereof.

Shareholders may vote their shares either by signing and returning the
proxy card accompanying this Proxy Statement or by touch-tone telephone.
Instructions for telephone voting are set forth on the accompanying proxy card.
Shareholders who execute proxies retain the right to revoke them at any time by
notice in writing to the Secretary of the Company, by revocation in person at
the Meeting or by presenting a later-dated proxy. Unless so revoked, the shares
represented by proxies will be voted at the Meeting in accordance with the
directions given therein. Shareholders vote at the Meeting by casting ballots
(in person or by proxy) which are tabulated by a person who is appointed by the
Board of Directors before the Meeting to serve as inspector of election at the
Meeting and who has executed and verified an oath of office. The presence, in
person or by proxy, of shareholders entitled to cast at least a majority of the
total number of votes entitled to be cast on each matter to be voted upon at the
Meeting constitutes a quorum as to each such matter. Abstentions and broker
"non-votes" are included in the determination of the number of shares present at
the Meeting for quorum purposes, but abstentions and broker "non-votes" are not
counted in the tabulations of the votes cast on proposals presented to
shareholders. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power with respect to that item and has not
received instructions from the beneficial owner or has discretionary power but
elects not to exercise it.

The registered office of the Company is located at Clarendon House, Church
Street, Hamilton HM CX, Bermuda. Certain subsidiaries of Central European Media
Enterprises Ltd. also maintain offices at Swan House, 52 Poland Street, London
W1V 3DF, England. The date on which this Proxy Statement and the enclosed form
of proxy will be first sent to shareholders is on or about May 1, 2000.

Shareholders of record of the Class A Common Stock, par value $.08 per
share, of the Company (the "Class A Common Stock") at the close of business on
April 5, 2000 shall be entitled to one vote for each share then held.
Shareholders of record of the Class B Common Stock, par value $.08 per share, of
the Company (the "Class B Common Stock") at the close of business on April 5,
2000 shall be entitled to ten votes for each share then held. The Class A Common
Stock and the Class B Common Stock shall be voted on all matters presented as a
single class. There were issued and outstanding at the close of business on
April 5, 2000, 2,313,346 shares of Class A Common Stock and 991,842 shares of
Class B Common Stock.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of April 5, 2000 with
respect to the beneficial ownership of the Company's Class A Common Stock and
Class B Common Stock and also sets forth certain information with respect to
voting power and percentage of ownership as of April 5, 2000, by (i) each
shareholder known by the Company to beneficially own more than 5% of any class
of the Company's outstanding voting securities, (ii) each director of the
Company, (iii) the Chief Executive Officer, a former Chief Executive Officer and
the other executive officer of the Company and (iv) all directors and executive
officers of the Company as a group. Except as otherwise noted below, each of the
shareholders identified in the table has sole voting and investment power over
the shares beneficially owned by such person. The beneficial ownership of Shares
of Class A Common Stock and Class B Common Stock set forth in the following
table reflects the one-for-eight reverse stock split of the Company's Common
Stock in December 1999.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP COMMON STOCK
OF CLASS A OF CLASS B -----------------------
COMMON STOCK(A) COMMON STOCK % OF
--------------------- --------------------- VOTING %
NAME OF BENEFICIAL OWNER NUMBER PERCENT NUMBER PERCENT POWER(B) OWNERSHIP(B)
- ------------------------------------ --------- ------- --------- ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Ronald S. Lauder(1)(12)............. 41,562(21) 1.8% 914,134(25) 92.2% 75.0% 28.3%
Frederic T. Klinkhammer............. 32,626(22) 1.4 -- -- * 1.0
Nicolas G. Trollope(2).............. 212 * -- -- * *
Jacob Z. Schuster................... -- -- -- -- -- --
John A. Schwallie................... 21,458(23) * -- -- * *
Marie-Monique Steckel............... -- -- -- -- -- --
All directors and executive as a
group (6 persons)................. 95,858(24) 4.0 914,134(25) 92.2 75.0 29.7
Michel Delloye(3)................... -- -- -- -- -- --
Vladimir A. Gousinsky (4)........... 520,789 22.5 -- -- 4.3 15.8
Mercury Asset Management plc(5)..... 271,243 11.7 -- -- 2.2 8.2
Warburg, Pincus Asset
Management, Inc. (6).............. 255,325 11.0 -- -- 2.1 7.7
Stephen L. Farley(7)(13)............ 221,718 9.6 -- -- 1.8 6.7
Labrador Partners L.P.(7)(14)....... 200,000 8.6 -- -- 1.6 6.1
ValueVest Management Company,
LLC(8)(15)........................ 156,375 6.8 -- -- 1.3 4.7
Mark A. Reily (9)(16)............... 152,524 6.6 -- -- 1.2 4.6
ValueVest Partners, L.P.(8)(17)..... 134,500 5.8 -- -- 1.1 4.1
Curtis Alexander(10)(18)............ 131,536 5.7 -- -- 1.1 4.0
Leonard A. Lauder(11)(19)........... -- -- 171,069 17.2 15.2 5.3
EL/RSLG Media, Inc.(1)(20).......... -- -- 80,861 8.2 7.2 2.5
</TABLE>

- ------------------

* Less than 1.0%

(a) Does not include 991,842 shares of Class A Common Stock issuable upon
conversion of shares of Class B Common Stock. Shares of Class B Common
Stock are convertible at any time into shares of Class A Common Stock for
no additional consideration on a share-for-share basis.

(b) Represents the percentage of total voting power and the percentage
ownership of the Class A Common Stock and the Class B Common Stock
currently beneficially owned by each identified shareholder and all
directors and executive officers as a group. The Class A Common Stock and
the Class B Common Stock are the only authorized classes of the Company's
capital stock with shares outstanding.

(1) The address of each of the shareholders indicated is Suite 4200, 767 Fifth
Avenue, New York, New York 10153.

(Footnotes continued on next page)

2
<PAGE>
(Footnotes continued from previous page)

(2) These shares are owned beneficially by the Proverbs Trust of which
Mr. Trollope and his wife are co-trustees and beneficiaries.

(3) Resigned as President and Chief Executive Officer and a director of the
Company on March 23, 1999. Mr. Delloye is no longer required to file
Section 16 reports with the Securities and Exchange Commission in
connection with his beneficial ownership of the Company's securities.
Pursuant to Mr. Delloye's severance agreement (see page 13), all of
Mr. Delloye's options for Class A Common Stock have expired. The Company is
not aware of any shares of its stock beneficially owned by Mr. Delloye.

(4) Information in respect of the beneficial ownership of Mr. Vladimir A.
Goussinsky (other than percentage ownership) is based upon a statement on
Schedule 13D, dated October 22, 1999, filed jointly by Mr. Goussinsky,
Elemental Limited, Media Most Limited, media Most B.V., Zao Media Most and
Dr. Andre V. Tsimailo. The address of Mr. Goussinsky, Zao Media Most and
Dr. Andre V. Tsimailo is ulitsa Novy Arbat 36, Moscow 121205 Russian
Federation. The address of Elemental Limited and Media Most Limited is
57/63 Line Wall Road, Gibraltar. The address of Media Most B.V. is
Locatellikade 1, 1076 AZ, Amsterdam Netherlands.

(5) Information in respect of the beneficial ownership of Mercury Asset
Management plc (other than percentage ownership) is based upon a statement
on Schedule 13D filed by such person. The address of Mercury Asset
Management plc is 33 King William Street, London, EC4R 9AS, England.

(6) Information in respect of the beneficial ownership of Warburg, Pincus Asset
Management, Inc. (other than its percentage ownership) is based upon a
statement on Schedule 13G filed by such person. The address of Warburg,
Pincus Asset Management, Inc. is 466 Lexington Avenue, New York, New York
10017.

(7) Information in respect of the beneficial ownership of Stephen L. Farley and
Labrador Partners L.P. (other than percentage ownership) is based upon a
statement on Schedule 13G filed jointly by such persons. The address of
Mr. Farley and Labrador Partners L.P. is 655 Third Avenue, Suite 2520, New
York, New York 10017.

(8) Information in respect of the beneficial ownership of ValueVest Management
Company, LLC and ValueVest Partners, L.P. is based upon a statement on
Schedule 13G filed jointly by such persons. The address of ValueVest
Management Company, LLC and ValueVest Partners, L.P. is One Sansome Street,
39th Floor, San Francisco, California 94104.

(9) Information in respect of the beneficial ownership of Mark A. Reily (other
than his percentage ownership) is based upon a statement on Schedule 13G/A
filed by such person. The address of Mr. Reily is 260 Broadway, Suite 2-D,
New York, New York 10013.

(10) Information in respect of the beneficial ownership of Curtis Alexander
(other than his percentage ownership) is based upon a statement on Schedule
13G filed by such person. The address of Mr. Alexander is 615 Boston Post
Road, Suite 200, Sudbury, Massachusetts 01776.

(11) Information in respect of the beneficial ownership of Leonard A. Lauder
(other than his percentage ownership) is based upon a statement on Schedule
13D filed by such person. The address of Mr. Leonard Lauder is c/o The
Estee Lauder Companies Inc., 767 Fifth Avenue, New York, New York 10153.

(12) 15,004 of these shares of Class B Common Stock are owned directly by Ronald
S. Lauder, 423,177 of these shares of Class B Common Stock are owned
beneficially by RSL Investments Corporation, 284,062 of these shares of
Class B Common Stock are owned beneficially by RSL Capital LLC and 72,223
of these shares of Class B Common Stock are owned beneficially by Duna
Investments, Inc., all of which are owned by Mr. Lauder. 26,307 of these
shares of Class B Common Stock are held by RAJ Family Partners L.P. and
beneficially owned by Mr. Lauder, and 80,861 of these shares of Class B
Common Stock are held by EL/RSLG Media, Inc., of which 50% of the common
stock outstanding is beneficially owned by the 1995 Estee Lauder RSL Trust
and beneficially owned by Mr. Lauder.

(Footnotes continued on next page)

3
<PAGE>
(Footnotes continued from previous page)

(13) 200,000 of these shares are also included in the shares reported as being
beneficially owned by Labrador Partners L.P. Mr. Farley is the managing
general partner of Labrador Partners L.P.

(14) These shares are also included in the shares reported as being beneficially
owned by Stephen L. Farley, the managing general partner of Labrador
Partners L.P.

(15) 134,500 of these shares are also included in the shares reported as being
beneficially owned by ValueVest Partners, L.P. ValueVest Management
Company, LLC is the general partner of ValueVest Partners, L.P.

(16) 15,750 of these shares are owned directly by Mark A. Reily ("Reily"), 4,000
of these shares are owned by an IRA F/B/O Reily, 1,250 shares are owned by
a SEP IRA F/B/O Reily, 86,737 shares are owned by Media Group Investors,
L.P. which has a sole general partner, Media Group Management, Inc., of
which Reily is a 75% shareholder, 15,662 shares of Common Stock owned by
Media Group Investments, Ltd., which has as its investment advisor
Vercingetorix Corp., of which Reily is a 50% shareholder, 16,000 shares of
Common Stock owned by Goldman Sachs Strategic Tech Fund, which also has as
its investment adviser Vercingetorix Corp., and 13,125 shares of Common
Stock owned by Key Media & Communications, Inc., which has as its
investment advisor Vercingetorix Corp.

(17) These shares are also included in the shares reported as being beneficially
owned by ValueVest Management Company, LLC, the general partner of
ValueVest Partners, L.P.

(18) 12 of the shares are owned directly by Curtis Alexander ("Alexander").
86,737 of these shares are owned by Media Group Investors, L.P. which has a
sole general partner, Media Group Management, Inc., of which Alexander is a
25% shareholder. 15,662 of these shares are owned by Media Group
Investments, Ltd., which has as its investment advisor Vercingetorix Corp.
of which Alexander is a 50% shareholder. 16,000 of these shares are owned
by Goldman Sachs Strategic Technology Portfolio, L.P., which also has as
its investment adviser Vercingetorix Corp. 13,125 of these shares are owned
by Key Media & Communications, Inc., which also has as its investment
advisor Vercingetorix Corp.

(19) 35,654 of these shares of Class B Common Stock are owned directly by
Leonard A. Lauder. 80,861 of these shares of Class B Common Stock are held
by EL/RSLG Media, Inc., of which 50% of the common stock outstanding is
beneficially owned by the 1995 Estee Lauder LAL Trust, of which Leonard A.
Lauder is a co-trustee and beneficiary. 54,554 of these shares of Class B
Common Stock are held by LWG Family Partners L.P., a partnership whose
managing partner is a corporation which is one-third owned by Mr. Lauder.

(20) These shares are also included in the shares reported as being beneficially
owned by Ronald S. Lauder and Leonard A. Lauder.

(21) Represents shares of Class A Common Stock underlying (i) warrants which are
currently exercisable at exercise prices per share of $128.80 and $242.00
on 31,250 and 8,750 shares of Class A Common Stock, respectively and which
expire on September 9, 2000 and October 2, 2001, respectively, (ii) 1,250
shares of Class A Common Stock underlying options which are currently
exercisable at $184.00 per share and which expire on August 1, 2007, and
(iii) 312 shares of Class A Common Stock underlying options which are
currently exercisable, which had an initial exercise price equal to $178.60
and which exercise price increases on the first day of each calendar
quarter by one quarter of 5.57% and which expire on June 8, 2008. Does not
include 938 shares of Class A Common Stock underlying options which are not
currently exercisable and which will not become exercisable within
60 days, but which had an initial exercise price of $178.60 per share,
which exercise price increases on the first day of each calendar quarter by
one-quarter of 5.57% and which expire on June 8, 2008.

(22) Includes 32,501 shares of Class A Common Stock underlying options which are
currently exercisable at exercise prices per share of $66.50, $192.00, and
$186.50 on 22,500, 6,667 and 3,334 shares of Class A Common Stock,
respectively. Does not include 23,749 shares of Class A Common Stock
underlying options

(Footnotes continued on next page)

4
<PAGE>
(Footnotes continued from previous page)

which are not currently exercisable and which will not become exercisable
within 60 days, but of which (i) options for 5,833 shares had an initial
exercise price of $192.00, which exercise price increases on each January 1
by 5.55% compounded annually and which expire on January 19, 2005;
(ii) options for 2,916 had an initial exercise price of $186.50 per share,
which exercise price increases on each January 1 by 5.55% compounded
annually and which expire on February 23, 2005; and (iii) options for
15,000 shares have an exercise price of $66.50 per share and expire on
March 23, 2009. At the Annual General Meeting to which this Proxy Statement
relates, shareholders are being asked to approve a proposal of the Board of
Directors to cancel these options and grant options to Mr. Klinkhammer to
acquire 132,000 shares of Class A Common Stock. Such options will not be
currently exercisable and will not be exercisable within 60 days but would
have an exercise price of $11.875 per share and will expire on March 8,
2007.

(23) Represents 20,625 shares of Class A Common Stock underlying options which
are currently exercisable at exercise prices per share of $112.00, $117.00,
$166.00 and $184.00 on 1,250, 6,250, 3,125 and 10,000 shares of Class A
Common Stock, respectively and 833 shares of Class A Common Stock
underlying options which are currently exercisable, which had an initial
exercise price equal to $91.504 and which exercise price increases on the
first day of each calendar quarter by one quarter of 4.91%. Does not
include 11,667 shares of Class A Common Stock underlying options which are
not currently exercisable and which will not become exercisable within
60 days but of which (i) options for 1,667 shares had an initial exercise
price of $91.504 per share, which exercise price increases on the first day
of each calendar quarter by one-quarter of 4.91% and which expire on August
1 2003; and (ii) options for 10,000 shares have an exercise price of
$104.00 per share and expire on August 1, 2006. At the Annual General
Meeting to which this Proxy Statement relates, shareholders are being asked
to approve a proposal of the Board of Directors to cancel these options and
grant options to Mr. Schwallie to acquire 33,000 shares of Class A Common
Stock. Such options will not be currently exercisable and will not be
exercisable within 60 days but would have an exercise price of $11.875 per
share and will expire on March 8, 2007.

(24) Includes 55,521 shares of Class A Common Stock underlying options which are
currently exercisable or which will become exercisable within 60 days and
40,000 shares of Class A Common Stock underlying warrants which are
currently exercisable. Does not include 30,812 shares of Class A Common
Stock underlying options which are not currently exercisable and which will
not become exercisable within 60 days.

(25) Includes 12,500 shares of Class B Common Stock underlying options which are
currently exercisable at an exercise price of $191.416 per share and which
expire on August 1, 2007.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors and persons who beneficially own
greater than 10% of a registered class of the Company's equity securities to
file certain reports ("Section 16 Reports") with the Securities and Exchange
Commission with respect to ownership and changes in ownership of the Common
Stock and other equity securities of the Company. Based solely on the Company's
review of the Section 16 Reports furnished to the Company and written
representations from certain reporting persons, the Company believes that,
during the fiscal year ended December 31, 1999, all filing requirements under
Section 16(a) applicable to its officers, directors and greater than 10%
beneficial owners were complied with on a timely basis, except that
Marie-Monique Steckel and Jacob Z. Schuster each filed a late Form 3 upon
becoming a director of the Company on December 14, 1999.

5
<PAGE>
ELECTION OF DIRECTORS

Five directors will be nominated for election at the Meeting to serve until
the Company's next annual general meeting of shareholders. The election of
directors requires the affirmative vote of a majority of the votes cast, in
person or by proxy, at the Meeting, provided that a quorum is present in person
or by proxy. Abstentions and broker non-votes will be included in determining
the presence of a quorum, but are not counted as votes cast. UNLESS OTHERWISE
INDICATED, THE ACCOMPANYING FORM OF PROXY WILL BE VOTED FOR THE PERSONS LISTED
BELOW. At this time, the Board of Directors knows of no reason why any nominee
might be unable to serve. There is no arrangement or understanding between any
director and any other person pursuant to which such person was selected as a
director.

<TABLE>
<CAPTION>
YEAR
BECAME A
NAME OF NOMINEE PRINCIPAL OCCUPATION AGE DIRECTOR
- ------------------------------------------ ------------------------------------------ ---- ------------
<S> <C> <C> <C>
Ronald S. Lauder.......................... Nonexecutive Chairman of the Board of the 56 1994
Company; Chairman of RSL Communications,
Ltd.
Frederic T. Klinkhammer................... President, Chief Executive Officer and 55 1999
Director
Nicolas G. Trollope....................... Partner, Conyers Dill & Pearman 53 1994
Jacob Z. Schuster......................... President, RSL Management Corporation 51 1999
Marie-Monique Steckel..................... Consultant to Ronald S. Lauder 60 1999
</TABLE>

Ronald S. Lauder, a founder of the Company, has served as nonexecutive
Chairman of the Board of the Company since its incorporation in 1994. He is also
the co-founder and has served as the Chairman of RSL Communications, Ltd. ("RSL
Communications"), an international telecommunications company, since 1994.
Mr. Lauder is a principal shareholder of The Estee Lauder Companies Inc. ("Estee
Lauder") and has served as Chairman of Estee Lauder International and Chairman
of Clinique Laboratories, Inc., divisions of Estee Lauder, since returning to
the private sector from government service in 1987. From 1986 until 1987,
Mr. Lauder served as U.S. Ambassador to Austria. From 1983 to 1986, Mr. Lauder
served as Deputy Assistant Secretary of Defense for European and NATO Affairs.
Mr. Lauder currently is a director of Estee Lauder. He is Chairman of the Board
of Trustees of the Museum of Modern Art, Chairman of the Council of Presidents
of American Jewish Organizations, President of the Jewish National Fund,
Chairman of the International Public Committee of the World Jewish Restitution
Organization, Treasurer of the World Jewish Congress, a member of the Board of
Governors of the Joseph H. Lauder Institute of Management and International
Studies at the University of Pennsylvania and a member of the Visiting Committee
of the Wharton School at the University of Pennsylvania. He received his B.S. in
International Business from the Wharton School of the University of
Pennsylvania.

Frederic T. Klinkhammer has served as President and Chief Executive Officer
of the Company since March 1999. Mr. Klinkhammer has also served as President
and Chief Executive Officer of CME Development Corporation since March 1999.
From January 1998 until March 1999, Mr. Klinkhammer served as Chief Operating
Officer and Executive Vice President of the Company and as Chief Operating
Officer, Executive Vice President and Managing Director of CME Development
Corporation. From July 1992 to December 1997, Mr. Klinkhammer operated an
international broadcasting and telecommunications consulting practice.
Mr. Klinkhammer was founding Chief Executive Officer of MediaLinx, the
multimedia arm of BCE Inc., from March 1993 to August 1996 and was responsible
for the creation of Sympatico, Canada's largest internet service provider.
Mr. Klinkhammer was President and Chief Executive Officer of IMAX Corporation
from August 1990 to June 1992, during which time that company produced its first
two feature length films. From March 1984 to August 1990, Mr. Klinkhammer served
as President and Chief Executive Officer of First Choice, Canada's largest pay
television company. From March 1983 to March 1984, Mr. Klinkhammer served as
Chief Executive Officer of Cablenet Ltd., a multi system cable operator with
operations in the U.S. and Canada. From January 1974 to March 1983,
Mr. Klinkhammer served as Vice President-Finance and later Vice President and
General Manager of Citytv in Toronto, Canada. Mr. Klinkhammer, a certified
Management Accountant, is a graduate of Ryerson Polytechnical Institute in
Business.

6
<PAGE>
Jacob Z. Schuster has been President and Treasurer of RSL Management
Corporation since November 1995. Mr. Schuster has been Executive Vice President
and Assistant Secretary of RSL Communications since 1994 and served as the
Treasurer of RSL Communications from 1994 through 1998 and as Chief Financial
Officer of RSL Communications from February 1997 until December 1998. From 1986
to 1992, Mr. Schuster was a General Partner and the Treasurer of Goldman, Sachs
& Co. Mr. Schuster is a director of RSL Communications and deltathree.com, Inc.
Mr. Schuster received a B.S. degree from Johns Hopkins University and an M.B.A.
degree from Baruch College.

Marie-Monique Steckel has served as a consultant to Ronald S. Lauder since
September 1999. From 1979 to September 1999, Ms. Steckel served as the President
of France Telecom North America. Ms. Steckel serves as a director of
Lepercq-Istel Fund. Ms. Steckel received a political science degree from the
Institute d'Etudes Politiques in Paris and did graduate work at Yale and Harvard
Business School.

Nicolas G. Trollope has served as Vice President and Secretary of the
Company since January 1997. Mr. Trollope has been a partner with the law firm of
Conyers, Dill & Pearman, Hamilton, Bermuda, since 1991. Mr. Trollope serves as a
director of RSL Communications and Delphi International Ltd., an insurance
company. Mr. Trollope received an LL.B. degree from London University.

COMMITTEES OF THE BOARD

The Board of Directors has an Audit Committee which is composed of Messrs.
Lauder and Trollope. During a portion of 1999 the Audit Committee was composed
of Messrs. Lauder and Herbert S. Schlosser and Peter R. Goldscheider. Messrs.
Schlosser and Goldscheider no longer serve on the Board of Directors The Audit
Committee is responsible for recommending annually to the Board of Directors the
independent auditors to be retained by the Company, reviewing with the
independent auditors the scope and results of the audit engagement and
establishing and monitoring the Company's financial policies and control
procedures. During the fiscal year ended December 31, 1999, the Audit Committee
met on one occasion.

The Board of Directors has a Compensation Committee which is composed of
Messrs. Lauder and Schuster and Ms. Steckel. During a portion of 1999 the
Compensation Committee was composed of Messrs. Lauder and Trollope. The
Compensation Committee is responsible for determining executive compensation
policies and guidelines and for administering the Company's 1994 Stock Option
Plan (the "1994 Stock Option Plan") and the Company's 1995 Stock Option Plan
(the "1995 Stock Option Plan"; collectively, the 1994 Stock Option Plan and the
1995 Stock Option Plan may be referred to as the "Stock Option Plans"),
including granting options and setting the terms thereof pursuant to such plans.
In addition, the Compensation Committee is responsible for the administration of
the Company's Director, Officer and Senior Executive Co-Investment Plan and for
reviewing and approving significant employment agreements. During the fiscal
year ended December 31, 1999, the Compensation Committee met on one occasions.

During the fiscal year ended December 31, 1999, the Board of Directors met,
or acted by unanimous consent, on twenty occasions. Each member of the Board of
Directors attended at least 75% of the aggregate number of meetings of the Board
of Directors and the Committees of the Board on which they served during the
periods that they served.

There is no family relationship among any directors or executive officers
of the Company.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF THE
ELECTION OF THE FIVE NOMINEES TO THE COMPANY'S BOARD OF DIRECTORS.

7
<PAGE>
EXECUTIVE OFFICER

Set forth below is certain information describing the Company's executive
officer who is not a nominee for director:

John A. Schwallie, age 37, has served as Vice President-Finance and Chief
Financial Officer of the Company since August 1995. Mr. Schwallie, a certified
public accountant, served as Financial Director of CNTS, the Company's Czech
Republic subsidiary, from 1994 until August 1995. From 1992 until 1993,
Mr. Schwallie served as the Advisor to the Financial Director of Prague
Breweries, the second largest brewery in the Czech Republic. During 1991, he
served as the assistant to the Regional Director of General Atlantic, a London
based multi-billion dollar privately held conglomerate, operating retail outlets
in Prague. Mr. Schwallie received his B.S. degree from Skidmore College and his
M.B.A. degree from Cornell University.

There is no arrangement or understanding between any executive officer and
any other person regarding selection as an executive officer.

8
<PAGE>
EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table summarizes all plan and non-plan compensation awarded
to, earned by, or paid to the Company's present and one former Chief Executive
Officers and its other executive officer (together, the "Named Executive
Officers") who either served as executive officers during, or were serving as
executive officers at the end of, the last completed fiscal year ended
December 31, 1999, for services rendered in all capacities to the Company and
its subsidiaries for each of the Company's last three fiscal years. The number
of securities underlying options set forth in the following table reflects the
one-for-eight stock split of the Company's Common Stock which occurred in
December 1999.

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------------
AWARDS
ANNUAL COMPENSATION --------------------------------------
------------------------------------------ SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD OPTIONS(4) COMPENSATION
PRINCIPAL POSITION YEAR $ $ $ $ # $
- ---------------------------------------- ---- ------- ------- ------------ ---------- ---------- ------------

<S> <C> <C> <C> <C> <C> <C> <C>
Frederic T. Klinkhammer ................ 1999 350,000 100,000 166,400(1) -- 37,500 2,520(6)
President and Chief Executive Officer 1998 300,000 200,000 74,700(1) 18,750 504(6)

John A. Schwallie ...................... 1999 250,000 40,000 38,400(2) -- 10,000 2,520(6)
Vice President-Finance 1998 235,417 80,000 39,843(3) 2,500 1,008(6)
And Chief Financial Officer 1997 210,417 75,000 -- 10,000

Michel Delloye ......................... 1999 87,500 -- 81,000(1) -- -- 1,300,040(5)
Former President and Chief 1998 271,943 -- 254,125(1) 28,125 60(6)
Executive Officer
</TABLE>

- ------------------
(1) Represents an expatriate premium paid by the Company pursuant to the terms
of an employment agreement.

(2) Represent housing costs paid by the Company.

(3) Represents a living allowance paid by the Company pursuant to the terms of
an employment agreement.

(4) At the Annual General Meeting to which this Proxy Statement relates,
shareholders are being asked to approve a proposal of the Board of Directors
to cancel these options and grant options to acquire 132,000 and 33,000
shares of Class A Common Stock to Mr. Klinkhammer and Mr. Schwallie,
respectively, all at an exercise price of $11.875 per share.

(5) Mr. Delloye resigned as President and Chief Executive Officer of the Company
on March 23, 1999. Pursuant to a severance agreement (see page 13),
Mr. Delloye received a lump sum payment from the Company and one of its
subsidiaries totaling $1,300,000. This number also represents life insurance
benefits paid by the Company.

(6) Represents life insurance benefits paid by the Company.

No stock appreciation rights or long-term incentive plan awards (all as
defined in the proxy regulations of the Securities and Exchange Commission) were
awarded to, earned by, or paid to the Named Executive Officers during the time
periods described above.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information with respect to grants of
options to purchase shares of Class A Common Stock granted to the Named
Executive Officers during the fiscal year ended December 31, 1999.

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL
----------------------------------------------------- RATES OF STOCK PRICE
NUMBER OF PERCENT OF APPRECIATION
SECURITIES TOTAL OPTIONS OVER EXERCISE PRICE
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES EXERCISE ----------------------
GRANTED IN FISCAL PRICE EXPIRATION 5% 10%
NAME (#)(1)(2) YEAR ($/SH)(1) DATE ($) ($)
- --------------------------------------------- ---------- ------------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Frederic T. Klinkhammer...................... 37,500 61.22% 66.50 3/23/09 1,568,000 3,974,000
John A. Schwallie............................ 10,000 16.33% 104.00 8/1/06 654,000 1,657,000
</TABLE>

(Footnotes on next page)

9
<PAGE>
(Footnotes from previous page)

- ------------------
(1) The number of securities underlying options granted in 1999 and the exercise
price for such options reflect the one-for-eight reverse stock split of the
Company's Common Stock which occurred in December 1999.

(2) At the Annual General Meeting to which this Proxy Statement relates,
shareholders are being asked to approve a proposal of the Board of Directors
to cancel these options and grant options to acquire 132,000 and 33,000
shares of Class A Common Stock to Mr. Klinkhammer and Mr. Schwallie,
respectively, all at an exercise price of $11.875 per share, which options
will expire on March 8, 2007.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table sets forth information with respect to each exercise of
stock options during the fiscal year ended December 31, 1999 by the Named
Executive Officers and the value at December 31, 1999 of unexercised stock
options held by the Named Executive Officers.

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED VALUE FISCAL YEAR-END FISCAL YEAR-END
ON EXERCISE REALIZED (#)(1)(2) ($)(1)(3)
NAME (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ----------------------------- --------------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Frederic T. Klinkhammer...... 0 0 23,749/32,501 0/0
John A. Schwallie............ 0 0 21,458/11,667 0/0
Michel Delloye............... 0 0 10,937/0(4) 0/0
</TABLE>

- ------------------
(1) The number of securities underlying unexercised options at fiscal year-end
reflect the one-for-eight reverse stock split of the Company's Common Stock
which occurred in December 1999.

(3) All options listed are exercisable at prices greater than the closing market
price of the Company's Common Stock at year-end.

(4) Pursuant to Mr. Delloye's severance agreement with the Company and one of
its wholly-owned subsidiaries (see page 13), all of these options have been
terminated.

COMPENSATION OF DIRECTORS

The Company pays a cash fee to each of its non-employee directors of
$10,000 per annum. In addition, on the first business day following each annual
general meeting of the Company's shareholders during the term of the 1995 Stock
Option Plan, each non-employee director of the Company (other than Mr. Trollope
who declines such options, but including for these purposes the Chairman) who
has served as a director since the last annual general meeting of shareholders
will be granted options to purchase 1,250 shares (or, in the case of the
Chairman, such higher number as the Board of Directors shall determine) of Class
A Common Stock (in the case of the Chairman, Class B Common Stock). For the
non-employee directors, the exercise price of the options will equal the average
of the closing price of a share of Class A Common Stock for the 10 business days
following the annual meeting (105% of the fair market value of a share of Class
A Common Stock in the case of an option to acquire Class B Common Stock) plus a
premium reflecting the risk-free rate of return based on the life of the option.
The options will vest over the five year period from the date of grant and will
expire 10 years from the date of grant.

The Company reimburses each director for expenses in connection with
attending meetings of the Board of Directors. Mr. Trollope is a partner in the
law firm of Conyers Dill & Pearman, Hamilton, Bermuda, which served as the
Company's Bermuda counsel for the fiscal year ended December 31, 1999 and is
expected to continue to serve as the Company's Bermuda counsel in 2000. For the
fiscal year ended December 31, 1999, the

10
<PAGE>

Company paid fees of $159,625.57 to Conyers Dill & Pearman, which includes the
services of Mr. Trollope as a director. No separate compensation is paid to any
director for serving on committees. Directors who are also employees of the
Company receive no additional compensation for service as a director.

On August 1, 1996, the Company and Mr. Herbert Schlosser, a former director
of the Company, entered into a consulting agreement which expired in accordance
with its terms on July 31, 1999. Under the consulting agreement, Mr. Schlosser
served as a consultant to the Company and, at the request of the Company's
management, performed general consulting services relating to the Company's
broadcast operations. Pursuant to the agreement, the Company paid Mr. Schlosser
at the rate of $100,000 per annum through July 31, 1999, initially granted
Mr. Schlosser 10 year options to purchase 3,125 shares of Class A Common Stock
at an exercise price equal to $174.00 per share, and on August 1, 1997 granted
Mr. Schlosser additional 10 year options to purchase 1,250 shares of Class A
Common Stock at an exercise price equal to $184.00 per share. Such options were
in addition to those granted separately to Mr. Schlosser for serving as a
director.

EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

Frederic T. Klinkhammer

Frederic T. Klinkhammer has entered into employment agreements dated as of
January 1, 1998 and amended as of March 23, 1999 with the Company and a
wholly-owned subsidiary of the Company. The employment agreements provide that
Mr. Klinkhammer will serve as President and Chief Executive Officer of the
Company and such subsidiary. Prior to March 23, 1999, under the employment
agreements, Mr. Klinkhammer served as Executive Vice President and Chief
Operating Officer of the Company and Executive Vice President, Managing Director
and Chief Operating Officer of such subsidiary. Pursuant to Mr. Klinkhammer's
employment agreement with the Company, as amended, the Company was required to
name Mr. Klinkhammer to its Board of Directors and the Board is required to
nominate Mr. Klinkhammer for election and re-election to the Board of Directors
of the Company during his term of employment with the Company. Under the
employment agreements, Mr. Klinkhammer will be entitled to receive a base salary
of $350,000 per year which will be increased annually, commencing on March 23,
2000, by 5% or such greater amount determined at the option and sole discretion
of the Compensation Committee, and an expatriate premium of UK (pound)104,000
per annum (plus an additional amount based on the increase in the consumer price
index in the London metropolitan area). The employment agreements provide for an
annual cash bonus opportunity of 75% of base salary if performance is at 100% of
target performance goals established by the Compensation Committee for such year
and up to 100% of his base salary if performance is at or above 150% of such
target. 60% of the bonus is based on the achievement of Company wide objectives
established by the Compensation Committee and 40% of the bonus is based on an
evaluation of personal performance as determined by the Compensation Committee.
For 1999, Mr. Klinkhammer was given a cash bonus of $100,000. The employment
agreements also provide that Mr. Klinkhammer will receive an additional one time
bonus of $1,000,000 if he is employed by the Company or any successor
corporation to the Company on December 31, 2003 and if the price of the
Company's Class A Common Stock has increased from its price as of March 22, 1999
(i.e., $66.50 per share) and the percentage increase exceeds that of the Nasdaq
Composite Index for such period.

Under the amendment to Mr. Klinkhammer's employment agreement with the
Company, on his being named Chief Executive Officer on March 23, 1999 he was
awarded options to acquire 37,500 shares of the Company's Class A Common Stock
at an exercise price equal to $66.50 per share, the mean between the high and
low trading prices of the Company's Class A Common Stock on the date of grant.
Under Mr. Klinkhammer's employment agreement with the Company, at the time he
was first hired as Executive Vice President and Chief Operating Officer, he was
also awarded in 1998 options to acquire, in the aggregate, 18,750 shares of the
Company's Class A Common Stock. On March 8, 2000 the Board of Directors (acting
without the participation of Mr. Klinkhammer) upon the recommendation of the
Compensation Committee (but subject to the approval of the shareholders at the
Annual General Meeting to which this Proxy Statement relates) cancelled all
56,250 of such options and awarded to Mr. Klinkhammer options to acquire 132,000
shares of the Company's Class A Common Stock at an exercise price equal to
$11.875 per share. Such options will vest in three equal installments on each of
the first three anniversaries of the date of the grant provided that the vesting
will be accelerated as to one-half of such options if the Company's attributable
EBITDA (before corporate charges) equals or exceeds

11
<PAGE>
$10.0 million during any year in which such options have not yet vested and as
to the remaining one-half of suchoptions if the Company's attributable EBITDA
(before corporate charges) equals or exceeds $15.0 million during any year in
which such options have not yet vested. All 132,000 of such options have an
expiration date of March 8, 2007. All options granted to Mr. Klinkhammer will
become exercisable in the event that Mr. Klinkhammer's employment is terminated
by the Company as a result of a change in control of the Company or in the event
of a merger, reorganization or consolidation in which the Company is not the
surviving corporation. The timing and amount of any subsequent option awards
will be at the discretion of the Compensation Committee and approved by the
Board of Directors, and will be commensurate with Mr. Klinkhammer's position
with the Company and taking into account option awards made to other executives
of the Company.

Mr. Klinkhammer's employment agreements also contain noncompetition
provisions applicable during the term of the employment agreement and for a two
year period thereafter, prohibit Mr. Klinkhammer from using confidential
information of the Company during the term of the employment agreements and
thereafter, and specify certain benefits and perquisites that Mr. Klinkhammer
shall be entitled to receive. The term of the employment agreements generally
expire on March 22, 2004. The employment agreements provide that if
Mr. Klinkhammer's employment agreements are not extended at the expiration of
the five year term, he will serve as a part-time consultant for two years
following such expiration, for which he will be paid $250,000 per annum.

John A. Schwallie

John A. Schwallie, Vice President-Finance and Chief Financial Officer of
the Company, has employment agreements dated as of August 1, 1999 with the
Company and a wholly-owned subsidiary of the Company. Under the employment
agreements, Mr. Schwallie will receive an aggregate annual salary of $250,000.
In addition, under such agreements Mr. Schwallie receives a monthly living
allowance of UK (pound)3,333.33 for each calendar month during which he
maintains a principal residence in the Greater London metropolitan area.
Mr. Schwallie's salary and monthly living allowance will be increased annually
commencing on August 1, 2000 to reflect the increase in the consumer price index
in the London metropolitan area for the previous calendar year. Mr. Schwallie
will have the opportunity to earn an annual cash bonus for each full year in a
target amount of 33% of base salary, to be determined by the CEO of the Company
and subject to the Compensation Committee's approval in its sole discretion. The
formula used to calculate the amount of the bonus shall be the same for all
Executive Officers of the Company, excluding the President and CEO. For 1999
Mr. Schwallie received a cash bonus equal to $40,000. Mr. Schwallie, who had
previously been granted options to purchase 23,125 shares of Class A Common
Stock, was also granted 7 year options under his current agreements to purchase
an additional 10,000 shares of Class A Common Stock at an exercise price of
$104.00 per share. On March 8, 2000 the Board of Directors (acting without the
participation of Mr. Klinkhammer) upon the recommendation of the Compensation
Committee (but subject to the approval of shareholders at the Annual General
Meeting to which this Proxy Statement relates) cancelled all 33,125 of such
options and awarded to Mr. Schwallie options to acquire 33,000 shares of the
Company's Class A Common Stock at an exercise price equal to $11.875 per share.
Such options will vest in three equal installments on each of the first three
anniversaries of the date of the grant, provided that the vesting will be
accelerated as to one-half of such options if the Company's attributable EBITDA
(before corporate charges) equals or exceeds $10.0 million during any year in
which such options have not yet vested and as to the remaining one-half of such
options if the Company's attributable EBITDA (before corporate charges) equals
or exceeds $15.0 million during any year in which such options have not yet
vested. All 33,000 of such options have an expiration date of March 8, 2007. In
the event of a merger, reorganization or consolidation in which the Company is
not the surviving corporation, then all options which have been granted to
Mr. Schwallie shall become immediately exercisable. The employment agreements
contain a confidentiality covenant and a non-compete covenant which has a term
of two years after the termination of Mr. Schwallie's employment. The terms of
the employment agreements generally expire on July 31, 2002.

12
<PAGE>
TERMINATION OF EMPLOYMENT

Michel Delloye

The Company and one of its wholly-owned subsidiaries entered into a
severance agreement, dated as of July 27, 1999, with Michel Delloye, who
resigned as President, Chief Executive Officer, and a director of the Company on
March 23, 1999. Pursuant to the severance agreement, most of the provisions of
certain employment agreements between Mr. Delloye, the Company and its
subsidiary were terminated. Under the severance agreement, the Company and its
subsidiary agreed to pay Mr. Delloye lump sum severance payments of $846,000 and
UK(pound)275,000, respectively, offset by an amount equal to UK(pound)63,365,
which amount had been advanced by the Company and its subsidiary to Mr. Delloye
in connection with the acquisition of a house and related costs. In addition,
under the severance agreement, the Company agreed to pay to Mr. Delloye's
lawyers the sum of $25,000 for legal expenses in connection with the
representation of Mr. Delloye in connection with his relationship with the
Company and its subsidiary.

Under the employment agreements, Mr. Delloye had been granted options to
purchase 28,125 shares of Class A Common Stock. Under the severance agreement,
10,937 options became exercisable immediately prior to Mr. Delloye's resignation
on March 23, 1999. These options have subsequently expired unexercised. The
remaining options were terminated as of March 23, 1999.

Mr. Delloye continues to be subject to provisions in the employment
agreements with regard to a prohibition on the use of confidential information.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee at the end of the fiscal year
ended December 31, 1999 were Ronald S. Lauder and Jacob Z. Schuster and
Marie-Monique Steckel. Prior to the 1999 Annual General Meeting of Shareholders,
the Compensation Committee was composed of Messrs. Lauder and Trollope. See
"Compensation of Directors" and "Certain Relationships and Related
Transactions."

13
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee administers the Company's compensation programs
for the Company's executive officers and station managers and also administers
the Company's Stock Option Plans.

Compensation Objectives and Policies

The Compensation Committee seeks to provide compensation packages to the
Company's executive officers and station managers that will motivate them and
retain their services. The Compensation Committee has adopted the following
basic objectives and policies for compensating the Company's executive officer
and station managers:

o compensation plans reward individual and corporate achievement;

o short and long-term incentives are to be effectively balanced to satisfy
both the short and long-term goals of the Company; and

o the interests of the Company's executive officers and station managers
are to be aligned with those of the Company's shareholders through
potential stock ownership.

The Compensation Committee has devised pay packages that consist of three
components:

Base Salary

Base salaries are intended to provide regular compensation at a sufficient
level to retain and motivate the Company's executive officers and station
managers.

Annual Bonus

The Company's annual bonus plan for the Company's executive officers and
station managers provides participants an opportunity to earn bonuses equal to a
specified percentage of their salaries. A portion of the bonus (determined by
the Compensation Committee) will be based on the achievement of company-wide
financial objectives (such as attributable revenue and EBITDA) established by
the Compensation Committee, and the remainder will be based on an evaluation of
personal performance submitted by management and approved by the Compensation
Committee. The performance of the Chief Executive Officer will be solely
evaluated by the Compensation Committee.

Stock Options

Stock Options are an integral part of the pay packages of the Company's
executive officers and station managers. The Compensation Committee believes
that stock options, which are designed to focus attention on stock values, are
the most effective way of aligning the long-term interests of the Company's
executive officers and station managers with those of the Company's
shareholders. The exercise price of each option on shares of Class A Common
Stock will not be less than the fair market value on the date the grant is
approved by the Compensation Committee, and will generally take any of the
following three forms, at the discretion of the Compensation Committee.

<TABLE>
<CAPTION>
EXPIRY
--------- VESTING SCHEDULE (YEARS)
---------------------------------------
1 2 3 4 5
<S> <C> <C> <C> <C> <C> <C>
Two-year options.................................. 5 years 33% 67%
Three-year options................................ 7 years 25% 30% 45%
Five-year options................................. 10 years 10% 15% 15% 25% 35%
</TABLE>

The Compensation Committee may elect to accelerate the vesting schedule of
the options based on the satisfaction of certain Company performance goals.

Options will generally remain exercisable during continued employment until
the seventh anniversary of the date of grant, which provides executives an
incentive to increase shareholder value over the long term since the full
benefit of the options cannot be realized unless stock price appreciation occurs
over a number of years.

Options will expire on the earlier of their stated expiration date or one
year after termination of an executive's employment, except that options
terminate immediately following a termination for cause and 90 days following a
voluntary termination by the executive. If there is a change in control of the
Company, options generally will become exercisable if an executive is thereafter
terminated by the Company other than for cause, or if the executive terminates
for good reason. Options that have not vested at the time of termination of
employment cannot be exercised.

14
<PAGE>
Fiscal Year 1999

Compensation of the Chief Executive Officer

Frederic T. Klinkhammer

Frederic T. Klinkhammer has served as the Company's Chief Executive Officer
since March 1999. Mr. Klinkhammer has entered into employment agreements with
the Company and a wholly-owned subsidiary of the Company dated as January 1,
1998 and amended as of March 23, 1999. They provide:

Salary

An initial base salary of $350,000 per year with 5% increase in base
salary per year (or such greater amount determined at the option and sole
discretion of the Compensation Committee) provided during the term of the
agreements and an expatriate premium of UK (pound) 104,000 per year (plus an
additional amount based on an increase in the consumer price index in the London
metropolitan area).

Annual Bonus

The Compensation Committee granted a $100,000 bonus to
Mr. Klinkhammer for 1999. The bonus granted to Mr. Klinkhammer was based on his
achievement of personal performance objectives established by the Compensation
Committee. Under Mr. Klinkhammer's employment agreement, he was eligible for 40%
of the potential bonus amount for the achievement of personal performance
objectives. The Compensation Committee determined that Mr. Klinkhammer achieved
these objectives as follows:

o leading the Company through an extremely challenging operating
environment during 1999;

o building more productive relationships with the Company's station
managers;

o reducing Company-wide operating costs; and

o delivering to the Board operating and strategic plans which the Board
believes establish achievable targets in the extremely challenging
operating environment faced by the Company.

Stock Options

During 1999, Mr. Klinkhammer was granted options to purchase 37,500
shares of Class A Common Stock, at an exercise price of $66.50 per share. On
March 8, 2000 the Compensation Committee recommended to the Board of Directors
the cancellation of all 37,500 of such options and the award to Mr. Klinkhammer
of new options to acquire 132,000 shares of the Company's Class A Common Stock
at an exercise price equal to $11.875 per share. The Board of Directors (without
the participation of Mr. Klinkhammer) accepted the Compensation Committee's
recommendation (subject to the approval of shareholders at the Annual General
Meeting to which this Proxy Statement relates). Such options will vest in three
equal installments on each of the first three anniversaries of the date of the
grant provided that the vesting will be accelerated as to one-half of such
options if the Company's attributable EBITDA (before corporate charges) equals
or exceeds $10.0 million during any year in which such options have not yet
vested and as to the remaining one-half of such options if the Company's
attributable EBITDA (before corporate charges) equals or exceeds $15.0 million
during any year in which such options have not yet vested. All 132,000 of such
options will have an expiration date of March 8, 2007. As stated above in this
Report, the Compensation Committee views the award of stock options as a key
tool to motivate and retain its executive officers, including the Chief
Executive Officer, as well as to align their interests with those of the
Company's stockholders. Over the last 12 months, the price of the Company's
Class A Common Stock on the Nasdaq National Market has dropped significantly.
The Compensation Committee believes that the drop in the price of the Class A
Common Stock was primarily as a result of (i) the continuing pre-emption of the
television broadcast signal of the Company's television operations in the Czech
Republic by CET 21, spol. s.r.o., which is the license holder for Nova TV, and
(ii) the economic downturn experienced in many of the Company's markets. The
Compensation Committee believes that both these events were beyond the control
of Mr. Klinkhammer and that the exercise prices for Mr. Klinkhammer's options
were based on market factors no longer applicable to the Company. Accordingly,
in order to continue to have Mr. Klinkhammer's compensation package remain
consistent with the Compensation Committee's compensation objectives and
policies, on March 8, 2000, the Compensation Committee and Board of Directors
(without the participation of Mr. Klinkhammer) took the action described in this
paragraph.

15
<PAGE>
In setting Mr. Klinkhammer's compensation package when he became Chief
Executive Officer in March 1999, a number of factors were considered, including:

o the desire of the Board of Directors to name a current executive of the
Company, with knowledge of both the operations and the short and
long-term strategy of the Company, as Chief Executive Officer,
particularly in light of the resignation of Michel Delloye after only one
year as the Company's Chief Executive Officer and ongoing negotiations
with SBS Broadcasting S.A. ("SBS") with respect to the purchase by SBS of
all the assets, and the assumption by SBS of all the liabilities, of the
company. The transaction with SBS subsequently was terminated (See the
Company's Form 8-K, dated September 29, 1999);

o the unique skills and experience of Mr. Klinkhammer in the international
media business which the Board of Directors believed would be necessary
to lead the Company through what the Board of Directors believed would be
an extremely challenging operating environment; and

o the total compensation of key executives at other media companies.

Compensation of the Former Chief Executive Officer

Michel Delloye

Michel Delloye served as the Company's Chief Executive Officer beginning in
March 1998 through March 23, 1999 when he resigned. Until his resignation,
Mr. Delloye had employment agreements which were to expire in March 2003. They
provided:

Salary

An initial base salary of $350,000 per year with $10,000 increases in
base salary per year provided during the term of the agreements and an
expatriate premium of UK (pound) 202,500 per year (plus an additional amount
based on an increase in the consumer price index in the London metropolitan
area).

Stock Options

During 1998, Mr. Delloye was granted options to purchase 28,125 shares
of Class A Common Stock, at an exercise price of $196.50 per share. 21,875 of
the options vested equally after the first and second anniversaries of their
grant and were to generally remain exercisable for ten years, and 6,250 of the
options were to vest equally after the third, fourth and fifth anniversaries of
their grant and were to generally remain exercisable for seven years.

In setting Mr. Delloye's compensation package, a number of factors were
considered, including:

o the unique skills and experience of Mr. Delloye;

o the total compensation of key executives at other media companies; and

o the importance of Mr. Delloye, at the time such package was set, to the
continued growth and success of the Company and the need to provide him
with a significant incentive to motivate and retain his services for a
five year period starting in 1998.

Severance Agreement

See "--Executive Compensation--Employment Agreements, Termination of
Employment and Change-in-Control Arrangements--Termination of Employment" on
page 13 for a description of the severance agreement between Mr. Delloye and the
Company.

Compensation Committee

RONALD S. LAUDER
JACOB Z. SCHUSTER
MARIE-MONIQUE STECKEL

16
<PAGE>
PERFORMANCE GRAPH

The following performance graph is a line graph comparing the change in the
cumulative shareholder return of the Class A Common Stock against the total
cumulative total return of the Nasdaq Composite Index and the Dow Jones World
Cable and Broadcasting Index between December 31, 1994 and December 31, 1999.

[LINE GRAPH]

<TABLE>
<CAPTION>
Date CETV NASDAQ Composite Index DOW JONES World Cable and Broadcasting Index (1)
- ---- ---- ---------------------- ------------------------------------------------
<S> <C> <C> <C>
12/94 100.00 98.04 93.03
12/95 146.43 137.17 113.27
12/96 226.79 168.32 114.18
12/97 180.36 204.74 143.48
12/98 46.88 285.88 209.33
12/99 6.25 541.18 423.82
</TABLE>

Value of $100 invested at December 31, 1994 as of December 31, 1999:

Central European Media Enterprises Ltd......................... $ 6.25
NASDAQ Composite Index......................................... $541.18
Dow Jones World Cable and Broadcasting Index(1)................ $423.82

- ------------------

(1) This index includes 20 companies, many of which are non-U.S. based.
Accordingly, the Company believes that the inclusion of this index is useful
in understanding the stock performance of the Company against companies in
the television broadcast and cable industry.

17
<PAGE>
AMENDMENT TO THE COMPANY'S BYE-LAWS CONCERNING DIRECTORS AND
OFFICERS INDEMNIFICATION

Amendments to the Companies Act, 1981 of Bermuda have been enacted which
allow companies incorporated under the laws of Bermuda to indemnify their
directors and officers in connection with the execution of their duties as a
director or officer of a Bermuda company in accordance with standards that are
more flexible than those currently provided for in the Company's Bye-laws. The
Board of Directors believes that adopting the indemnification standards to the
extent permitted under Bermuda law will assist the Board in identifying and
attracting additional independent directors with broad experience and skills to
serve on the Board. In addition, the Board of Directors believes that the
adoption of indemnification standards to the extent provided for by Bermuda law
would make the Company's indemnification standards more consistent with other
public companies organized under the laws of Bermuda.

For the reasons set forth above, the Board of Directors has determined that
it is in the best interests of the Company and its shareholders to amend Bye-law
166(1) as set forth in Exhibit A hereto, which would allow the Company to
indemnify its directors and officers in connection with the execution of their
duties as a director or officer of the Company to the full extent permitted
under Bermuda law. Currently, Bye-law 166(1) provides that the indemnification
provided by the Company to its directors and officers may not extend to acts of
"wilful negligence, wilful default, fraud or dishonesty." If the shareholders
approve proposed amendment to Bye-law 166(1) the indemnification provided by the
Company to its directors and officers would not extend to acts of "fraud or
dishonesty."

VOTE REQUIRED; RECOMMENDATION

THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS A VOTE IN
FAVOR OF AMENDING THE COMPANY'S BYE-LAWS CONCERNING DIRECTORS AND OFFICERS
INDEMNIFICATION.

18
<PAGE>

CANCELLATION OF OPTIONS TO PURCHASE SHARES OF CLASS A COMMON STOCK
PREVIOUSLY GRANTED TO FREDERIC T. KLINKHAMMER AND JOHN A. SCHWALLIE AND
GRANT OF NEW OPTIONS TO PURCHASE SHARES OF CLASS A COMMON STOCK TO
MR. KLINKHAMMER AND MR. SCHWALLIE

The Compensation Committee of the Board of Directors of the Company views
stock options as a key tool to motivate and retain its executive officers,
including Frederic T. Klinkhammer, the Chief Executive Officer, and John A.
Schwallie, the Chief Operating Officer, as well as to align their interests with
those of the Company's shareholders. During and prior to the fiscal year ended
December 31, 1999, Mr. Klinkhammer had been awarded options to acquire in the
aggregate 56,250 shares of Class A Common Stock with initial exercise prices of
$66.50, $192.00 and $186.50 on 37,500, 12,500 and 6,250 shares, respectively.
During and prior to the fiscal year ended December 31, 1999, Mr. Schwallie was
awarded options to acquire in the aggregate 33,125 shares of Class A Common
Stock with initial exercise prices of $112.00, $117.00, $166.00, $184.00,
$91.504, and $104.00 on 1,250, 6,250, 3,125, 10,000, 2,500 and 10,000 shares,
respectively. Over the last 12 months, the price of the Company's Class A Common
Stock on the Nasdaq National Market has dropped significantly. The Compensation
Committee believes that the drop in the price of the Class A Common Stock was
primarily as a result of (i) the continuing pre-emption of the television
broadcast signal of the Company's television operations in the Czech Republic by
CET 21, spol. s.r.o., which is the license holder for Nova TV, and (ii) the
economic downturn experienced in many of the Company's markets. The Compensation
Committee and the Board of Directors believes that both these events were beyond
the control of Mr. Klinkhammer and Mr. Schwallie and that as a result, the
exercise prices of Mr. Klinkhammer's and Mr. Schwallie's options are based on
market factors no longer applicable to the Company. Upon the recommendation of
the Compensation Committee, the Board of Directors (acting without the
participation of Mr. Klinkhammer) determined that in order to keep
Mr. Klinkhammer's and Mr. Schwallie's compensation packages consistent with the
Compensation Committee's compensation objectives and policies, the Company
should cancel the outstanding options to acquire shares of Class A Common Stock
and issue new options to acquire shares of Class A Common Stock to both
Mr. Klinkhammer and Mr. Schwallie with an exercise price that more accurately
reflects such objectives and policies.

The Board of Directors (acting without the participation of
Mr. Klinkhammer) accepted the Compensation Committee's recommendation to cancel
all outstanding options previously granted to Mr. Klinkhammer and Mr. Schwallie
and to grant new options to acquire 132,000 and 33,000 shares of Class A Common
Stock to Mr. Klinkhammer and Mr. Schwallie, respectively, all at an exercise
price of $11.875 per share (the closing price of the Company's Class A Common
Stock on NASDAQ on March 8, 2000). As to both Mr. Klinkhammer and
Mr. Schwallie, such options will vest in three equal installments on each of the
first three anniversaries of the date of grant provided that the vesting would
be accelerated as to one-half of such options if the Company's attributable
EBITDA (before corporate charges) equals or exceeds $10.0 million during any
year in which such options have not yet vested and as to the remaining one-half
of such options if the Company's attributable EBITDA (before corporate charges)
equals or exceeds $15.0 million during any year in which such options have not
yet vested. All options granted will have an expiration date of March 8, 2007.

Under generally accepted accounting principles ("GAAP"), if the exercise
price of a fixed employee stock option is reduced, the option will be accounted
for as "variable" from the date of the price modification until the date on
which the option is exercised, forfeited or expires unexercised. For GAAP
purposes, the cancellation of options and the granting of new options with a
lower exercise price within six months of the date of the cancellation, as the
Board of Directors (without the participation of Mr. Klinkhammer) has approved
with respect to Mr. Klinkhammer and Mr. Schwallie, constitutes a reduction in
the exercise price of their previously granted options which requires "variable"
accounting treatment. Under "variable" accounting treatment, the Company will be
required to record a charge to earnings each earnings period for any increases
in the price of the shares of Class A Common Stock over the exercise price of
the options multiplied by the number of shares underlying the cancelled options
which have been re-granted. Accordingly, the cancellation of the options to
purchase shares of Class A Common Stock to Mr. Klinkhammer and Mr. Schwallie and
the grant of new options to purchase shares of Class A Common Stock to each of
them as described in this proposal will result in the Company recording earnings
charges for increases in the fair market value of the shares of Class A Common
Stock over the exercise price of the new options multiplied by the number of
shares underlying the cancelled options which have been re-

19
<PAGE>
granted, which number of shares is 89,250. The Company will be subject to these
potential earnings charges until the date on which the options are exercised,
forfeited or expire unexercised. The Compensation Committee and the Board of
Directors (without the participation of Mr. Klinkhammer) discussed and
considered the impact to the Company and its shareholders of the accounting
treatment and potential charge to earnings to the Company resulting from the
cancellation of outstanding options and new grant of options to Mr. Klinkhammer
and Mr. Schwallie, and determined, for the reasons discussed in the first
paragraph of this proposal, that the adoption of this proposal is in the best
interests of the Company and its shareholders.

VOTE REQUIRED; RECOMMENDATION

Approval of this proposal requires the affirmative vote of a majority of
the votes cast, in person or by proxy, at the Meeting, provided that a quorum is
present in person or by proxy. Abstentions and broker non-votes will be included
in determining the presence of a quorum, but are not counted as votes cast.
Unless otherwise indicated, the accompanying form of proxy will be voted FOR the
cancellation of options to purchase shares of Class A Common Stock previously
granted to Frederic T. Klinkhammer and John A. Schwallie and grant of new
options to purchase shares of Class A Common Stock to Mr. Klinkhammer and
Mr. Schwallie.

THE BOARD OF DIRECTORS (WITH MR. KLINKHAMMER ABSTAINING) UNANIMOUSLY
RECOMMENDS A VOTE IN FAVOR OF THE CANCELLATION OF OPTIONS TO PUIRCHASE SHARES OF
CLASS A COMMON STOCK PREVIOUSLY GRANTED TO FREDERIC T. KLINKHAMMER AND JOHN A.
SCHWALLIE AND GRANT OF NEW OPTIONS TO PURCHASE SHARES OF CLASS A COMMON STOCK TO
MR. KLINKHAMMER AND MR. SCHWALLIE.

20
<PAGE>
ADOPTION OF FINANCIAL STATEMENTS

The Audit Committee of the Board of Directors has approved the audited
financial statements for the Company's fiscal year ended December 31, 1999 (the
"Financial Statements") for presentation to the shareholders at the Annual
General Meeting of Shareholders. Under Bermuda law, the shareholders are
requested to adopt financial statements; under Bermuda law, the adoption of the
Financial Statements by the shareholders does not affect any rights that the
shareholders may have with respect to the Financial Statements. The Financial
Statements are included in the Company's Annual Report on Form 10-K, which is
being circulated together with this Proxy Statement.

VOTE REQUIRED; RECOMMENDATION

The adoption of the Financial Statements requires the affirmative vote of a
majority of the votes cast, in person or by proxy, at the Meeting, provided that
a quorum is present in person or by proxy. Abstentions and broker non-votes will
be included in determining the presence of a quorum, but are not counted as
votes cast. Unless otherwise indicated, the accompanying form of proxy will be
voted FOR adoption of the Financial Statements and the auditors' report thereon.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF THE
ADOPTION OF THE FINANCIAL STATEMENTS AND THE AUDITORS' REPORT THEREON.

21
<PAGE>
SELECTION OF AUDITORS

At the recommendation of the Audit Committee, the Board of Directors
recommends to the shareholders that Arthur Andersen, Victoria Hall, Hamilton,
Bermuda, be appointed to serve as the independent auditors of the Company until
the conclusion of the Company's next annual general meeting of shareholders. In
addition, the Board of Directors recommends to the shareholders that the
shareholders authorize the Board of Directors to approve the auditors' fee.

Representatives of Arthur Andersen are expected to be present at the
Meeting, will have an opportunity to make a statement if they so desire and will
be available to respond to appropriate questions from shareholders.

VOTE REQUIRED; RECOMMENDATION

The appointment of Arthur Andersen to serve as the independent auditors of
the Company and the authorization of the Board of Directors to approve the
auditors' fee requires the affirmative vote of a majority of the votes cast, in
person or by proxy, at the Meeting, provided that a quorum is present in person
or by proxy. Abstentions and broker non-votes will be included in determining
the presence of a quorum, but are not counted as votes cast. UNLESS OTHERWISE
INDICATED, THE ACCOMPANYING FORM OF PROXY WILL BE VOTED FOR THE APPOINTMENT OF
ARTHUR ANDERSEN AS THE COMPANY'S AUDITORS AND FOR THE BOARD OF DIRECTORS TO
APPROVE THE AUDITORS' FEE.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF THE
APPOINTMENT OF ARTHUR ANDERSEN AS THE COMPANY'S AUDITORS AND A VOTE IN FAVOR OF
AUTHORIZING THE BOARD OF DIRECTORS TO APPROVE THE AUDITORS' FEE.

22
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On December 22, 1998, RSL Capital, a company wholly-owned by Ronald S.
Lauder, the non-executive Chairman of the Company's Board of Directors, made an
equity investment of $22.725 million in the Company in exchange for 189,375
shares of the Company's Class B Common Stock, which is a price equal to $120.00
per share, pursuant to the terms of a Stock Purchase Agreement, dated as of
December 3, 1998, between the Company and RSL Capital (the "Stock Purchase
Agreement"). Under the Stock Purchase Agreement, because the last reported daily
trading price of the Class A Common Stock on the Nasdaq Stock Market did not
equal or exceed $120.00 for at least 20 consecutive trading days during the
period that commenced on November 13, 1998 and ended on November 12, 1999, the
Company, on November 19, 1999, issued 94,687 additional shares of Class B Common
Stock to RSL Capital for no additional consideration.

SHAREHOLDER PROPOSALS

Shareholder proposals must be received by the Company at its principal
executive office by January 1, 2001 in order to be considered for inclusion in
proxy materials distributed in connection with the next annual general meeting
of shareholders.

The proxy or proxies designated by the Company will have discretionary
authority to vote on any matter properly presented by a shareholder for
consideration at the next annual general meeting of shareholders but not
submitted for inclusion in the proxy materials for such meeting unless notice of
the matter is received by the Company at its principal executive office by March
16, 2001.

MISCELLANEOUS

Under Bermuda law, no matter or business other than those set forth in the
accompanying Notice of Annual Meeting of Shareholders is permitted to be
presented at the Meeting.

The Company will bear the cost of preparing, assembling and mailing the
enclosed form of proxy, this Proxy Statement and other material which may be
sent to shareholders in connection with this solicitation. Officers and regular
employees may solicit proxies by mail, telephone, telegraph and personal
interview, for which no additional compensation will be paid. In addition,
Georgeson Shareholder Communications Inc. has been engaged by the Company to act
as proxy solicitors and will receive fees of $4,500, plus expenses. The Company
may reimburse persons holding shares in their names or in the names of nominees
for their reasonable expenses in sending proxies and proxy material to their
principals.

The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 is being mailed to shareholders simultaneously with this Proxy
Statement.

By order of the Board of Directors,

NICOLAS G. TROLLOPE
Secretary

Hamilton, Bermuda
May 1, 2000

23
<PAGE>
EXHIBIT A

PROPOSED AMENDMENTS TO THE COMPANY'S BYE-LAWS CONCERNING
THE INDEMNIFICATION PROVIDED BY THE COMPANY TO THE COMPANY'S
DIRECTORS AND OFFFICERS

Bye-law 166(1), proposed to be amended, currently provides as follows:

BYE-LAW 166(1)

166. (1) The Directors, Secretary and other officers and each person
who is or was or had agreed to become a Director or officer of the
Company, and each such person who is or was serving or who had agreed
to serve at the request of the Board of Directors or an officer of the
Company as an employee or agent of the Company or as a Director,
officer, employee or agent of another company, corporation,
partnership, joint venture, trust or other enterprise and every
Auditor for the time being of the Company and the liquidator or
trustees (if any) for the time being acting in relation to any of the
affairs of the Company and everyone of them, and every one of their
heirs, executors, administrators and estates, shall be indemnified and
secured harmless out of the assets and profits of the Company from and
against all actions, costs, charges, losses, damages and expenses
which they or any of them, their or any of their heirs, executors,
administrators or estates, shall or may incur or sustain by or by
reason of any act done, concurred in or omitted in or about the
execution of their duty, or supposed duty, in their respective offices
or trusts; and none of them shall be answerable for the acts,
receipts, neglects or defaults of the other or others of them or for
joining in any receipts for the sake of conformity, or for any bankers
or other persons with whom any moneys or effects belonging to the
Company shall or may be lodged or deposited for safe custody, or for
insufficiency or deficiency of any security upon which any moneys of
or belonging to the Company shall be placed out on or invested, or for
any other loss, misfortune or damage which may happen in the execution
of their respective offices or trusts, or in relation thereto;
PROVIDED THAT this indemnity shall not extend to any matter in respect
of any willful negligence, willful default, fraud or dishonesty which
may attach to any of said persons. Subject to the provisions of the
Act and without limiting the generality or the effect of the
foregoing, the Company may enter into one or more agreements with any
person which provide for indemnification greater or different than
that provided in this Bye-law 166(1). Any repeal or modification of
the Bye-law 166(1) shall not adversely affect any right or protection
existing hereunder immediately prior to such repeal or modification.

If the proposal is adopted, Bye-law 166(1), in its entirety would provide
(showing the changes) as follows:

BYE-LAW 166(1)

A-1
<PAGE>
be lodged or deposited for safe custody, or for insufficiency or
deficiency of any security upon which any moneys of or belonging to
the Company shall be placed out on or invested, or for any other loss,
misfortune or damage which may happen in the execution of their
respective offices or trusts, or in relation thereto; PROVIDED THAT
this indemnity shall not extend to any matter in respect of any
[wilful negligence, wilful default,] fraud or dishonesty which may
attach to any of said persons. Subject to the provisions of the Act
and without limiting the generality or the effect of the foregoing,
the Company may enter into one or more agreements with any person
which provide for indemnification greater or different than that
provided in this Bye-law 166(1). Any repeal or modification of the
Bye-law 166(1) shall not adversely affect any right or protection
existing hereunder immediately prior to such repeal or modification.

A-2
<PAGE>
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
PROXY FOR ANNUAL GENERAL MEETING
OF SHAREHOLDERS--MAY 25, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby constitutes and appoints Ronald S. Lauder, Nicolas G.
Trollope, Michael Ashford, Anthony Whaley and Kevin Butler, or any of them
acting singly, with the power of substitution in any of them, the proxies of the
undersigned to vote with the same force and effect as the undersigned all shares
of Common Stock of Central European Media Enterprises Ltd. (the "Company") held
of record by the undersigned on April 5, 2000 at the Annual General Meeting of
Shareholders to be held at the Southampton Princess Hotel, South Road,
Southampton, Bermuda, on May 25, 2000, at 10:00 A.M. and at any adjournment or
adjournments thereof, hereby revoking any proxy or proxies heretofore given and
ratifying and confirming all that said proxies may do or cause to be done by
virtue thereof with respect to the following matters:

This proxy, when properly executed, will be voted as directed. If no
direction is indicated, the proxy will be voted (i) FOR the election of the FIVE
named individuals as directors, (ii) FOR the approval of the proposal to amend
the Company's Bye-laws concerning the indemnification provided by the Company to
the Company's directors and officers, (iii) FOR the approval of a proposal to
cancel options to purchase shares of Class A Common Stock previously granted to
Frederic T. Klinkhammer and John A. Schwallie and to grant new options to
purchase shares of Class A Common Stock to Mr. Klinkhammer and Mr. Schwallie
(iv) FOR the adoption of the financial statements of the Company and the
auditors' report thereon for the Company's fiscal year ended December 31, 1999,
and (v) FOR the appointment of Arthur Andersen as independent auditors of the
Company for the 2000 fiscal year and the authorization of the Board of Directors
to approve the auditors' fee.

Shares cannot be voted unless this proxy card is signed and returned or
shares are voted by telephone or in person at the Annual General Meeting.

(TO BE SIGNED ON REVERSE SIDE)
<PAGE>

/X/ Please mark your votes as in this example.

1. The election of five directors nominated by the Board of Directors to serve
until the next Annual General Meeting of Shareholders:

RONALD S. LAUDER, FREDERIC T. KLINKHAMMER, NICOLAS G. TROLLOPE, JACOB Z.
SCHUSTER, MARIE-MONIQUE STECKEL.

INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on this line:

FOR all nominees WITHHOLD AUTHORITY
listed below (except to vote for the nominees
as indicated below) listed below

/ / / /

2. The approval of a proposal to amend the Company's Bye-laws concerning the
indemnification provided by the Company to the Company's directors and officers.

FOR AGAINST ABSTAIN

/ / / / / /

3. The approval of a proposal to cancel options to purchase shares of Class A
Common Stock previously granted to Frederic T. Klinkhammer and John A. Schwallie
and to grant new options to purchase shares of Class A Common Stock to Mr.
Klinkhammer and Mr. Schwallie.

FOR AGAINST ABSTAIN

/ / / / / /

4. The adoption of the financial statements of the Company and the auditors'
report thereon for the Company's fiscal year ended December 31, 1999. 5. The
appointment of Arthur Andersen as independent auditors of the Company for the
2000 fiscal year and the authorization of the Board of Directors to approve the
auditors' fee.

FOR AGAINST ABSTAIN

/ / / / / /

PLEASE SIGN, DATE AND MAIL THIS PROXY IMMEDIATELY IN THE ENCLOSED ENVELOPE.

THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON MAY 25, 2000, AND THE PROXY STATEMENT, DATED MAY 1,
2000 PRIOR TO THE SIGNING OF THIS PROXY.

Dated , 2000
- ------------------------------------------------------ --------------
SIGNATURE

Dated , 2000
- ------------------------------------------------------ --------------
SIGNATURE IF HELD JOINTLY

Please sign your name exactly as it appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as it
appears hereon. When signing as joint tenants, all parties in the joint tenancy
must sign. When a proxy is given by a corporation, it should be signed by an
authorized officer and the corporate seal affixed. When a proxy is given by a
partnership, it should be signed in the partnership name by an authorized
person.