CO ~ ~ E RCIAL$ CONT ACTORS GUILD AND ANA-AAAA )OINT POLICY COHHITTEE ON BROADCAST TALENT RELATIONS SCREEN ACTORS GUILD 2003 COMMERCIALS CONTRACT AGREEMENTmade by and between SCREENACTORS GUILD, INC., a Cahfomla non-profit corporation, herein called the "UNION" and the ANA-AAAAJOINT POLICY COMMITTEEON BROADCASTTALENT UNION RELATIONS,herein called the "JOINT POLICYCOMMITTEE", acting on behalf of advertisers and advertising agencaeswho have authorizedsaid Committeeto act on their behalf, a list of whichhas been filed with the Unionand is by this reference included as a part of this Contract, and others whosign this Contract or Letters of Adherencehereto, hereinafter individuallyreferred to as "Producer." I. PRE-PRODUCTION 1. RECOGNITION AND COVERAGE A. Principal Performers The Union is recognized by Producer as the exclusive bargaining agent for all pnncipal performers (includmg actors, narrators, announcers, singers, specialty dancers, specialty acts, puppeteers, stunt performers, and pilots) as described in Section 6, Persons Covered, employed by Producer for commercials, as the term "commercials" is defined in Section 4, within the scope of this Contract as provided in subsection A of Section 5, Scopeof Contract. Compensationto principal performers in commercialsis based both on the services which the principal performer renders in the production of such commercialsand on the use which is madeof the finished commercial in which the principal performer has rendered services. This dual basis of compensation springs from the unique nature of the services rendered by principal performers in commercials. The Unioncontended that a principal performer rendering services in a commercialperforms, to a great extent, the duties of a demonstrator or salesperson of a particular product or service and as such, tends to be identified with that particular productor service. The Union also contendedthat this identification increases proportionately with the continued telecasting of a commercial. The Union further contended that advertisers and their agencies seldom approve the employment of a principal performer who has become identified with another product or service, especially if the product or service is competitive. These conditions and practices tend to reduce opportunities for further employmentin this field. The Producer, realizing the singular nature of this kind of service and that the reuse of a commercialmay limit or curtail further employmentopportunities for the principal performers appearing in the commercial, has agreed to this unique methodof compensation. B. Extra Performers The Unionis also recognized by the Producers, and each of them, as the exclusive bargaining agent for all extra performers employedin the production of commercials, as the term "commercials" is defined in Section 4, in the zones as defined in Section 1 of ScheduleD hereof. 2. EFFECTIVE DATE AND TERM This Contract shall be for a three (3) year term commencingOctober 30, 2003 and continuing to and including October29, 2006 and shall continue in effect thereafter until terminated by either party by 60 days’ notice, in writing, to the other. 3. EXISTING CONTRACTS Except as otherwise expressly provided herein, the terms and provisions of this Contract shall apply to all commercialsproduced on or after October 30, 2003 and to all new or additional versions of commercials producedunder all prior collective bargaining agreementsfor commercialswhich are integrated on or after October 30, 2003 under the provisions of Section 25, Integrating of Commercials Into Different Commercialsand to all versions which are edited after October 30, 2003, other than as expressly permitted under Section 26, Editing of Commercials. The provisions of this Contract with respect to all services rendered by principal performers and extra performers in commercialson or after the effective date hereof shall be deemedincorporated into all contracts of employmentnow in effect or hereafter entered into, but no terms or provisions in any such existing contracts which are morefavorable to the principal performers or extra performers, as the case maybe, than the terms and provisions herein specified shall be deemedso modified. 4. DEFINITIONS The Producers signatory hereto and the Union confirm their mutual understanding and agreement that the term "commercials"as used herein and in all prior agreements betweenthe parties, meansand includes, and has always meant and included, motion pictures whether madeon or by film, tape or otherwise and whether produced by means of motion picture cameras, electronic cameras or devices, tape devices or any combinationof the foregoing, or any other means, methods or devices nowused or which mayhereafter be adopted. The foregoing provision shall be binding upon advertising agencies signatory hereto or to Letters of Adherencereferred to in Section 56, Letters of Adherence,except only with respect to commercialsmade by meansof electronic tape or any other electronic device produced for such advertising agencies by television stations or television networks using broadcasting studio facilities of such television stations or television networks. Commercialsare short advertising or commercialmessages made as motion pictures, 3 minutes or less in length, and intended for showingover television. Advertising or commercialmessages include any narration, dialogue, songs, jingles or other matter which depict or mention the advertiser’s name, product or service. They include program openings and closings which mention the advertiser’s name, product or service. Advertising and commercial messagesover 3 minutes in length shall be subject to separate negotiations betweenthe Unionand Producer. The term "commercials"also includes short advertising messages intended for showing on the Internet which would be treated as commercialsif broadcast on television and which are capable of being used on television in the same formas on the Internet. If a dispute arises as to whethermaterial used on the Intemet qualifies as a commercial,as defined above, either party maysubmit the dispute to a joint committeeestablished by the Joint Policy Committee and the Union. The joint committee shall consist of an equal numberof persons appointed by the Joint Policy Committeeand by the Union. If the joint committeefails to resolve the dispute within thirty days, either party may submitthe dispute to arbitration. 5. SCOPE OF CONTRACT A. Principal Performers 1. The terms and conditions of this Contract apply to commercialsproduced by Producer in the United States, which includes its commonwealths,territories and possessions, and to commercialsfor which Producer engages principal performers within such territorial areas wherever such commercialsare made. 2. The showing of commercialsanywhere within the United States, its commonwealths,territories and possessions, Canadaand Mexico,shall be included in determining use fees. The parties to this Contract agree that every effort will be madeto encourageadvertisers to produce commercialsas defined in Section 4 within the geographic scope of this Contract. As part of this objective, Producers agree that they will not produce commercialsoutside the geographic scope of this Contract engaging entirely non-union principal performers primarily for reasons of economyor economicadvantages in the engagementof principal performers. On request, Producer will supply the Union with complete records and reports of commercialswhich were made outside the geographic scope of this Contract. In the event such material discloses production outside the geographic scope of this Contract in violation of the intent and spirit of Section 5 A 3, the Union may require advance notice of all future production outside of the geographic scope of this Contract. B. Extra Performers The terms and conditions of Schedule D - Extra Performers, of this Contract apply to commercials produced by Producer only in the extra zones defined in Schedule D for which Producer engages extra performers within such extra zones. 6. PERSONS COVERED -- PRINCIPAL PERFORMERS The following classifications of persons are included in the term "principal performer" and are covered by this Contract: Anyonewho is seen and whospeaks a line or lines of dialogue, whether directly employedfor such work or after being hired as an extra performer, as provided in paragraph 26 of Schedule A of the Producer- Screen Actors Guild Codified Basic Agreementof 1992; B. Anyonewhose face appears silent, alone in a stationary camera shot, and is identified with the product or service; Anyonewhose face appears silent and is identifiable and whoseforeground performance demonstrates or illustrates a product or service or illustrates or reacts to the on or off-camera narration or commercial message; Persons appearing in the foreground solely as atmosphere and not otherwise covered by the foregoing shall be deemedextra performers; Notwithstanding any of the provisions of subsections A, B or C hereof, anyone whois the subject of a closeup and whois identifiable shall be deemeda "principal performer." A "closeup" is defined as that term is understood in motionpicture photography; Clownsin proprietary makeupwhich is identifiable are included in the term "principal performer"if their foregroundperformance demonstrates or illustrates a product or service or illustrates or reacts to the on or off-camera narration or commercialmessage; Stunt performers are included in the term "principal performer"if they performan identifiable stunt which