SRSound Recording Division

Sound Recording Distribution Guidelines:

The American Federation of Musicians ("AFM") and the Screen Actors Guild- American Federation of Television and Radio Artists ("SAG-AFTRA") have designated the AFM & SAG-AFTRA Intellectual Property Rights Distribution Fund ("Fund") as their agent for the distribution of remuneration resulting from the DPRA (Digital Performance Rights Amendment), DMCA (Digital Millennium Copyright Act), and the Audio Home Recording Act of 1992 (AHRA).
In accordance with the DPRA, the DMCA, and the AHRA funds are collected on behalf of non-featured musicians (including music preparation personnel) and non-featured vocalists. These separately collected funds shall be referred to as the Musicians' Subfund and the Vocalists' Subfund, respectively. A non-featured performer for purposes of distributions under these guidelines shall be a musician or vocalist who is not one of the performers most prominently identified in print or otherwise with respect to the specific sound recording for which distributions from the Fund are made, and/or a performer who has not directly received a distribution from SoundExchange or from AARC (Alliance of Artists and Record Companies) respectively for that recording.
Funds are segregated (i.e. not co-mingled with funds from other years, or between the Musicians' Subfund and the Vocalists' Subfund), and are allocated on an annual basis.
The Fund shall maintain a website to provide distribution information and participant access for inquiries and related matters.
The Fund shall publish a notice in various trade publications no less than twice each calendar year directing non-featured performers to the website and informing them of the possible payments from the Fund. At least one such notice must be placed no less than 60 days prior to a disbursement.
There will be two lists posted on the website-one for musicians and one for vocalists-containing the covered sound recordings as defined in Paragraph 9 herein for non-featured musicians and non-featured vocalists. Each record list posted on the Fund website shall identify all the non-featured musicians and non-featured vocalists, respectively, known to have participated on each covered sound recording. It shall also identify the sound recordings for which it believes all non-featured musicians and/or non-featured vocalists have been identified. The website shall provide a method for non-featured performers to claim that they performed on a record and/or to provide personal or contact information. A non-featured performer may also make a claim in writing to the AFM and AFTRA Intellectual Property Rights Distribution Fund at 11846 Ventura Blvd, Suite 300, Studio City, CA 91604. A non-featured performer who has been omitted from the Fund's list of performers for a record shall have forty-five days from the publication on the Fund's website of the titles ready for distribution to make a claim to the Fund. The Fund, in its sole discretion, may process claims received after forty-five days but prior to disbursement.
In preparing for distributions, the Fund may rely on information available to it (e.g. session reports and website responses) and information available to the public (e.g. liner notes, on-line services), in its discretion, unless it is demonstrated that the information is not accurate.
Prior to each distribution, the Fund shall withhold a sum, the amount of which shall be determined by the Fund, for the purposes (1) of resolving disputes, and (2) correcting errors and/or omissions from any prior regular or supplemental distribution of the remuneration for that calendar year. Such withheld sums shall be known as the Omissions Fund.
The Fund shall deduct administrative expenses from the funds to be distributed prior to distribution. Administrative expenses may include, but shall not be limited to, costs of staff, consultants, research, administration, services, equipment, distribution costs or other fees at the discretion of the Trustees.
It is the goal of the Fund to distribute the DPR funds received for each year to as many non-featured musicians and non-featured vocalists as possible without issuing checks for de minimus amounts. Due to the fact that the non-featured performers' share of DPR royalties has been quite low in the past and is expected to remain quite low for the foreseeable future, the Fund only is able to make distributions on a limited number of sound recordings that were digitally transmitted each year. The following system will be used to determine, for each year, the identity of the recordings upon which distributions shall be made and the amount to be distributed upon each recording:

Sound recordings upon which distribution shall be made will be determined separately for the non-featured musicians and the non-featured vocalists.
A proportionate pro-rata share of administrative expenses proportionate to amount received by the Musicians' Subfund and the Vocalists' Subfund respectively shall be deducted from each such Subfund for each year (e.g. if the funds collected for each Subfund are equal, then administrative expenses will be split on a 50-50 basis irrespective of the number of particular sound recordings and non-featured performers subject to a distribution for a particular year). The amount remaining after the deduction of administrative expenses shall be defined as the Distributable Amount for each year.
Sound recordings subject to distribution shall be identified based on a frequency of transmission/activity report (Frequency Report) ranking provided by SoundExchange (for DPR Distributions) or based on SoundScan sales ranking (for AHRA Distributions) as applicable for each year of distribution.
The number of sound recordings for each year upon which distributions shall be made from the Musicians' Subfund shall be determined in the following manner. For each year, the Fund shall review the top 100 Frequency Report ranked recordings, or the album listing of the top 100 SoundScan ranked recordings as applicable and determine the number of non-featured performers (musicians and vocalists combined) appearing on a recording. The largest number of non-featured performers appearing on a recording shall be M. The number of sound recordings upon which distributions shall be made for each year shall be the Distributable Amount for that year divided by 2M (or a higher multiplier if necessary to avoid an inordinate number of recordings allocated minimus amounts). The resulting number shall be the number of sound recordings upon which a distribution shall be made for that year, starting from the Frequency Report top-ranked sound recording on the sound recording list. For example, if Distributable Amount equals $1million and M=50 then the number of sound recordings subject to a distribution would be 1,000,000/ 100 (2M) = 10,000. In other words, the distribution will be made to the top 10,000 ranked sound recordings on the Frequency Report recording list for that year.
In the event that the foregoing formulas leave a remaining consecutive sound recording(s) with individual non-featured musicians' shares or individual vocalists' share (as determined below) equal to or greater than $10.00, then additional sound recordings shall be added to the list of sound recordings subject to a distribution until such time as the minimum individual pro-rata amount is at or near the $10.00 threshold.
Within the Musicians' Subfund, once the sound recordings have been identified upon which distribution shall be made for a particular year, each sound recording's pro-rata share of that year's Distributable Amount shall be determined by dividing that sound recording's Frequency Report percentage market share by the Frequency Report cumulative percentage market share for the sound recordings upon which distribution shall be made for that year, as follows: Sound Recording % market share / Cumulative % market share = Sound Recording Pro-rata Share of Distributable Amount. Similarly, for the Vocalists' Subfund, once the sound recordings have been identified upon which distribution shall be made for a particular year, each sound recording's pro-rata share of that year's Distributable Amount shall be determined by dividing that sound recording's Frequency Report percentage market share by the Frequency Report cumulative percentage market share for the sound recordings upon which distribution shall be made for that year, as follows: Sound Recording % market share / Cumulative % market share = Sound Recording Pro-rata Share of Distributable Amount. Sound recording weighted activity as determined by SoundExchange data shall be used to determine sound recording activity percentage. The Fund, however, shall continue to investigate other methods to make this determination, and at such time as there are additional or other proven industry-wide accepted methods for making these determinations, then the Fund shall incorporate said methods in its procedures.
If a recording has no non-featured performers, its share will be distributed to the remaining recordings on a pro-rata basis. The amount to be distributed to each non-featured performer on a sound recording shall be determined by dividing the amount distributable for that sound recording by the number of non-featured performers identified on the recording. Distributions shall be made to non-featured performers without regard to union membership.
Any monies unclaimed after six months (e.g. stale-dated checks, payments for which the Fund has no good address, Omissions Fund balance, etc.) shall revert to the Fund.
In order to achieve an efficient scale of operation, the Fund will not generate a check or a royalty statement to an individual who is not entitled to receive $10.00 or more ("deminimus threshold"). The Fund will establish a carry-over procedure and will issue a check and royalty statement to that individual when the $10.00 threshold has been cumulatively satisfied. In determining whether such cumulative deminimus threshold has been met, the Fund will aggregate any sums held as deminimus from other revenue streams subject to a distribution from the Fund (e.g. a non-featured performer who is entitled $4.00 from Japanese record rentals, $5.00 from private home taping monies, and $2.00 from a DPR distribution would be issued a check and a royalty statement even though none of the specific revenue sources satisfied the deminimus threshold).

In the event a non-featured performer feels aggrieved by the actual or proposed distribution of royalties, but not by the distribution formula, s/he may seek an adjustment by writing to the Administrator within 90 days of the distribution and setting forth the grounds for the complaint. The Administrator shall review the complaint and provide a written decision within thirty days. If the non-featured performer does not accept the decision of the Administrator, s/he may appeal the decision to the Trustees of the AFM & SAG-AFTRA Intellectual Property Rights Distribution Fund. The appeal must be sent to the Trustees at AFM and SAG-AFTRA Intellectual Property Rights Distribution Fund at 4705 Laurel Canyon Blvd., Suite 400, Valley Village, CA 91607 within sixty days of the Administrator's decision, and must set forth the grounds for the appeal in writing. The Trustees shall review the appeal and reach a decision no later than sixty days from the date of the appeal. The Trustees shall advise the Administrator and the non-featured performer of their decision, which shall be final.
In reaching their determinations, the Administrator and the Trustees shall follow the distribution methodology set forth in these Guidelines, supplemented by the principles of law and equity. The Administrator and the Trustees shall not consider the complainant's union status.
If at some future date, in the sole determination of the Trustees, the annual amount collected for distribution from either the Musicians' Subfund or the Vocalists' Subfund become too small to effect an economically feasible distribution, then the monies collected for that year shall be held until such distributions are feasible in a subsequent year. In no circumstance, however, shall monies held for distribution be co-mingled with monies collected for a different year.
The Fund shall not make a distribution to any Participant, except as provided herein, who does not possess a valid Tax Identification Number (TIN), which may be any of the following:

Social Security Number " SSN"
Employer Identification Number " EIN"
Individual Taxpayer Identification Number " ITIN"
Taxpayer Identification Number for Pending U.S. Adoptions " ATIN"

When a foreign withholding tax obligation exists with respect to a distribution to a foreign resident who does not possess a SSN, but does possess a valid TIN, the Fund shall withhold the default statutory amount unless the Participant provides the Fund with a fully completed IRS Form 8233, in which case the Fund shall apply provisions in accordance with the applicable treaty. Alternatively, participants in foreign territories who either are unable to, or elect not to acquire a valid TIN, may complete and submit a TIN Waiver Form provided by the Fund, in which case the Fund will remit the applicable payment to the participant after deducting the default statutory amount (currently 30%). When a foreign withholding tax obligation exists with respect to a distribution to a foreign resident who does not possess a SSN, but does possess a valid TIN, the Fund withholds the default statutory amount (currently 30%) unless the Participant provides the Fund with a fully completed IRS Form 8233, in which case the Fund applies the provisions in accordance with the applicable treaty of the country in which the participant resides. Foreign residents should consult their tax professional with any questions or to receive advice with respect to these payments. For Non-Resident Alien Participants If you wish to inquire about ITIN, Exemption from withholding Form 8233, and/or the reporting of your payment on form 1042, you may refer to this website for assistance: http://www.artistsfromabroad.org/taxes/appendix.html

For each participant for whom the AFM or SAG-AFTRA pension fund has information, we will use the beneficiary or beneficiaries they have designated with respect to their respective pension fund as follows:

For participants for whom neither fund has information, then a beneficiary or beneficiaries named in a will shall apply. In the event a participant dies without a will, then (A) The widow or widower shall be the sole beneficiary unless there are any surviving children, in which case the widow or widower is entitled to one-half of participant's interest and the surviving children the other half; (B) If there is no surviving widow or widower, then the participant's surviving children shall receive the participant's entire interest; (C) The participant's children's share of the interest shall be divided among them on a pro rata basis according to the number of children.
We allow multiple beneficiaries, and allow a beneficiary or beneficiaries to name subsequent beneficiaries (e.g. benes of benes (BOB's));
The Fund's website shall list those deceased participants for whom we have a payment but no beneficiary to enable potential beneficiaries to contact us;
The Fund will solicit and maintain separate beneficiary declarations, but when none has been provided shall rather utilize those specified above.

Amended as of 12/04/13