Exhibit 10.11


 


HSN, Inc.


Deferred
Compensation Plan for Non-Employee Directors


 


1.             Purpose.  The purpose of the HSN, Inc. Deferred
Compensation Plan for Non-Employee Directors (the “Plan”) is to provide
non-employee directors of HSN, Inc. (or any successor thereto) (the “Company”)
with an opportunity to defer Director Fees (as defined in paragraph 4(b) below).


 


2.             Effective Date.  The Plan shall become effective on August       ,
2008, subject to approval by the Company’s Board of Directors (the “Board”).


 


3.             Eligibility.  Any director of the Company who is not an
employee of the Company or of any subsidiary or affiliate of the Company is
eligible to participate in the Plan.


 


4.             Election to Defer Compensation.


 


(a)           Time
of Eligibility.  An election to defer Director Fees by a newly
elected director shall be made by such director within the 30-day period
following his or her election to the Board, which election shall apply only to
Director Fees earned for services performed after
the date of such election.  A director
who has either (i) not previously elected to defer Director Fees or (ii) discontinued
(or wishes to modify) a prior election to defer Director Fees may elect to defer
Director Fees (or modify an existing deferral election) by giving written notice
to the Company on or prior to November 1 of each year (or such other date
as may be determined from time to time by the Secretary of the Company in
accordance with paragraph 10 of the Plan and in compliance with applicable
law).  Any such election shall only apply
to Director Fees earned for services performed during the calendar year following such written notice.  The effectiveness of a given election shall
continue until the participant’s “separation from service,” as defined under Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) and
Treasury Regulation §1.409A, from the Company and any entity that would be
treated as a single employer with the Company under Section 414(b) or
414(c) of the Code (a “Separation from Service”) or until the end
of the calendar year during which the director gives the Company written notice
of its discontinuance or modification, whichever shall occur first.  Any notice of discontinuance or modification
shall operate prospectively from the first day of the calendar year following
the receipt of such written notice by the Secretary of the Company, and
Director Fees payable during any subsequent calendar year shall either be paid
(absent any timely future deferral election) or deferred in accordance with the
terms of the discontinuance or modified election, as applicable; provided, however,
that Director Fees theretofore deferred shall continue to be withheld and shall
be paid in accordance with the notice of election pursuant to which they were
withheld.  All written notices regarding
deferral elections and/or the discontinuance or modification of prior deferral
elections shall be made on a form prescribed by the Company.


 


(b)           Amount
of Deferral.  A participant may elect to defer receipt of
all or a specified portion of the cash fees receivable by such director for
services performed as a


 

















 


director
of the Company (which amounts shall include fees for services as a member of
one or more Committee(s) of the Board and meeting attendance fees, if any
(among other fees), as and if applicable from time to time) that are otherwise
payable to the director in cash (the “Director Fees”).


 


(c)           Manner
of Electing Deferral.  A participant shall elect to defer Director
Fees by giving written notice to the Company in a form prescribed by the
Company.  Such notice shall include:


 


(i)            the
percentage or amount of Director Fees to be deferred (the “Deferred Fees”);


 


(ii)           the
allocation of the Deferred Fees between the “Cash Fund” or “Share
Units;” and


 


(iii)          in
the case of a participant’s initial election only, an election of a lump-sum
payment or of a number of annual installments (not to exceed five) for the
payment of the Deferred Fees (plus the amounts (if any) credited under Section 5),
with such lump-sum payment or the first installment payment occurring on the
later of (A) the calendar year following the calendar year in which the
participant’s Separation from Service occurs (but not earlier than January 15th
of such year) or (B) the first day of the seventh month following the date
on which the participant’s Separation from Service occurs (and otherwise in
compliance with applicable law), with any successive annual installment
payments to be made not earlier than January 15th of each such
year.  Any payment election made by a
participant in connection with his or her initial election to participate in
the Plan shall apply to all Deferred Fees, whether covered by the initial
deferral election or a subsequent deferral election; provided,  however,  that  this
paragraph 4(c)(iii) shall not preclude subsequent modifications to the
payment election described immediately above that are made in connection with a
participant’s Separation from Service and in compliance with paragraph (d) below.


 


(d)           A
participant may change his or her payment election in accordance with the
following requirements:


 


(i)            Subject
to clauses (ii) and (iii) of this paragraph (d), such election may
not take effect until the twelve (12) month anniversary of the date the
election is made and filed with the Secretary of the Company using a form
prescribed by the Company;


 


(ii)           Such
lump-sum payment or the first installment payment  shall not be made less than five (5) years
after the date that the participant’s Deferred Fees (plus the amounts (if any)
credited under Section 5)would have been paid pursuant to paragraph (c)(iii) above
(or such later year if a prior modification was made pursuant to this
paragraph); and


 


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(iii)          Any
new election shall not be effective unless made at least twelve (12) months
prior to the year in which the payment of the Deferred Fees (plus the amounts
(if any) credited under Section 5) would otherwise commence.


 


5.             Deferred Compensation Account.  The Company shall establish a book-entry
account for each participant to record the participant’s Deferred Fees (the “Account”).


 


(a)           For
Deferred Fees allocated by the participant to the Cash Fund:


 


(i)            at
the time the Director Fees would otherwise have been payable, the Account will
be credited with the amount of the Deferred Fees, receipt of which the
participant has elected to defer, and


 


(ii)           at
the end of each calendar year or terminal portion of a year, the Account will
be credited with deemed interest, at an annual rate equivalent to the weighted
average prime or base lending rate of JP Morgan Chase Bank (including any
successor thereto or such other financial institution that may be selected from
time to time by the Secretary of the Company in accordance with paragraph 10 of
the Plan and in accordance with applicable law) for the relevant year or
portion thereof (the “Interest Equivalents”), upon the average daily
balance in the Account during such year or portion thereof.


 


(b)           For  Deferred Fees allocated by the participant to
Share Units:


 


(i)            at
the time the Director Fees would otherwise have been payable, (A) the
Account will be credited with the amount of the Deferred Fees, receipt of which
the participant has elected to defer and (B) such amount of Deferred Fees
shall be converted on such date to a number of “Share Units” (computed to the
nearest 1/1000 of a share) equal to the number of shares of common stock, par
value $.01 per share (“Common Stock”), of the Company that theoretically
could have been purchased on such date with such amount of Deferred Fees, using
the closing price for the Common Stock on such date (or, if such date is not a
trading day, on the next preceding trading day) on The Nasdaq Stock Market’s National
Market System (“Nasdaq”) or, if the Common Stock is not then listed or
quoted on Nasdaq, the principal stock exchange on which the Common Stock is
then traded;


 


(ii)           on
each date on which a dividend is paid on the Common Stock, the Account will be
credited with the number of Share Units (computed to the nearest 1/1000 of a
share) which theoretically could have been purchased with the amount of
dividends payable on the number of shares of Common Stock equal to the number
of Share Units in the participant’s Account immediately prior to the payment of
such dividend; the number of additional Share Units shall be calculated as in
paragraph 5(b)(i) above, provided that, with respect to dividends paid in
kind, the amount of such dividend shall be determined based on the fair 


 


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market
value of such dividend on the date of the dividend distribution (which, if such
dividend is a security that is then traded on a stock exchange, the fair market
value of such security shall be the closing price on such date of the security
on the principal stock exchange on which the security is then traded (or, if
such date is not a trading day, on the next trading day); and


 


(iii)          on
the date of the occurrence of any event described in paragraph 7(d) below,
the Account will be credited with the number of Shares Units necessary for an
equitable adjustment, which adjustment shall be determined in accordance with
paragraphs 7(d) and 10 of the Plan and in accordance with applicable law.


 


(c)           Unless
otherwise determined by the Secretary of the Company in accordance with
paragraph 10 of the Plan and in accordance with applicable law, Deferred Fees
shall be payable (and related amounts credited to participant Accounts) on a
quarterly basis.  Each payment shall be
classified as a “separate payment” under Section 409A of the Code.


 


6.             Value of Deferred Compensation Accounts.  The value of each
participant’s Account on any date shall consist of (a) in the case of the
Cash Fund, the sum of the Deferred Fees credited in accordance with paragraph 5
above and the Interest Equivalents credited through such date, if any, and (b) in
the case of the Share Units, the market value of the corresponding number of
shares of Common Stock on such date, determined using the closing price for the
Common Stock on such date (or, if such date is not a trading day, on the next
preceding trading day) on Nasdaq, or if the Common Stock is not then listed or
quoted on Nasdaq, the principal stock exchange on which the Common Stock is
then traded.  A participant’s Account
shall be credited with Interest Equivalents or additional Share Units, if any,
as applicable for so long as there is an outstanding balance credited to the
Participant’s Account.


 


7.             Payment of Deferred Compensation.  No payment shall be
made from a participant’s Account except as follows:


 


(a)           The
balance of Deferred Fees and Interest Equivalents in a participant’s Account
credited to the Cash Fund shall be paid in cash in the manner elected in
accordance with the provisions of paragraph 4(c) above.  If annual installments are elected, the
amount of the first payment shall be a fraction of the balance in the participant’s
Account as of the December 31 of the year preceding such payment, the
numerator of which is one and the denominator of which is the total number of
annual installments elected.  The amount
of each subsequent payment shall be a fraction of the balance in the
participant’s Account as of December 31 of the year preceding each
subsequent payment, the numerator of which is one and the denominator of which
is the total number of installments elected minus the number of installments
previously paid.  Each payment pursuant
to this paragraph 7(a) shall include Interest Equivalents, but only on the
amount being paid, from the preceding December 31 to the date of payment.


 


(b)           The
balance in a participant’s Account credited to Share Units shall be paid in the
number of actual shares of Common Stock equal to the whole number of


 


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Share
Units in the participant’s Account.  If
annual installments are elected, the whole number of shares of Common Stock in
the first payment shall be a fraction of the number of Share Units in the
participant’s Account as of December 31 of the year preceding such
payment, the numerator of which is one and the denominator of which is the
total number of annual installments elected. 
The whole number of shares of Common Stock in each subsequent payment
shall be a fraction of the Share Units in the participant’s Account as of December 31
of the year preceding each subsequent payment, the numerator of which is one
and the denominator of which is the total number of installments elected minus
the number of installments previously paid. 
If annual installments are elected, cash payments in lieu of fractional
shares of Common Stock issuable in respect of fractional Share Units, if applicable,
shall be made with the last payment.


 


(c)           Notwithstanding
the election of the participant pursuant to paragraph 4(c), in the event of a
participant’s death while a director, “conflict of interest” within the meaning
of Treasury Regulation Section 1.409A-3(j)(4)(iii), or “disability” within
the meaning of Treasury Regulation Section 1.409A-3(i)(4), the balance in
the participant’s Account (in the case of the Cash Fund, including Interest
Equivalents in relation to the elapsed portion of a year) shall be determined
as of such date of death, conflict of interest or disability, and such balance
shall be paid in one lump-sum payment in cash in the case of the Cash Fund or
in actual shares of Common Stock in the case of Share Units to the participant
or the participant’s estate, as the case may be, as soon as reasonably
practicable thereafter (and otherwise in compliance with applicable law and Section 409A
of the Code) but in no event later than the later of the last day of such
calendar year in which the death, conflict of interest or disability occurred
or ninety (90) days following the occurrence of the death, conflict of interest
or disability.


 


(d)           In
the event of any merger, consolidation, acquisition of property or shares,
stock rights offering, liquidation, disaffiliation, or similar event affecting
the Company or any of its subsidiaries, the Board or the Compensation and Human
Resources Committee (or such other Committee as the Board may from time to time
designate) (the “Committee”) may make such equitable substitutions or
adjustments in the aggregate number of Share Units in a participant’s Account,
in the form or type of property represented by such Share Units and in the number
and kind of shares reserved for issuance as the Board or the Committee deems appropriate.  In the event of a stock dividend, stock
split, reverse stock split, separation, spinoff, reorganization, extraordinary
dividend of cash or other property, share combination, or recapitalization or
similar event affecting the capital structure of the Company, the Committee or
the Board shall make such substitutions or adjustments as it deems appropriate
and equitable to the aggregate number of Share Units in a participant’s
Account, in the form or type of property represented by such Share Units and in
the number and kind of shares reserved for issuance.  Any successor corporation or other acquirer
of the Company shall be required to assume the Company’s obligations hereunder
and substitute an appropriate number of shares of stock or other equity measure
of such successor entity for Share Units.


 


8.             Participant’s Rights Unsecured.  The right of a
participant to receive any unpaid portion of the participant’s Account, whether
the Cash Fund or Share Units, shall be an unsecured claim against the general
assets of the Company.


 


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9.             Nonassignability.  The right of a participant to receive any
unpaid portion of the participant’s Account shall not be assigned, transferred,
pledged or encumbered or be subject in any manner to alienation or anticipation.


 


10.           Administration.  This Plan shall be administered by the
Secretary of the Company, who shall have the authority to adopt rules and
regulations for carrying out the Plan and to interpret, construe and implement
the provisions thereof.


 


11.           Stock Subject to Plan.  The total number of Share Units that may be
credited to the Accounts of all eligible directors, and the total number of
shares of Common Stock reserved and available for issuance, under the Plan
shall be 100,000.


 


12.           Conditions Upon Issuance of Common Stock.  Shares of Common
Stock shall not be issued pursuant to the Plan unless the issuance and delivery
of such shares pursuant hereto shall comply with all relevant provisions of
law, including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares of Common Stock may then be listed, and shall be further subject to
the approval of counsel for the Company with respect to such compliance.


 


13.           Amendment and Termination.  This Plan may be amended, modified or
terminated at any time by the Committee or the Board; provided, however,
that no such amendment, modification or termination shall, without the consent
of a participant, adversely affect such participant’s rights with respect to
amounts theretofore accrued to the participant’s Account and any amendment or
termination of the Plan shall be effected in accordance with the requirements
of Section 409A of the Code.


 


14.           Section 409A of the Code.


 


(a)           The terms and conditions of
the Plan are intended to comply (and shall be interpreted in accordance) with Section 409A
of the Code and the regulations thereunder.


 


(b)           No action shall be taken under
the Plan that will cause any Account to fail to comply in any respect with Section 409A
of the Code without the written consent of the participant.


 


(c)           Any adjustments to Share
Units and/or cash payments made pursuant to paragraph 7(d) shall be made (i) in
compliance with the requirements of Section 409A of the Code and (ii) in
such a manner as to ensure that after such adjustment and/or cash payment, the
Share Units or Deferred Fees to be paid comply with the requirements of Section 409A
of the Code.


 


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