Exhibit 10.10


 


HSNi, INC.

2008 STOCK AND ANNUAL INCENTIVE PLAN


 


SECTION 1. 
Purpose; Definition


 


The purpose of this Plan is (a) to give the
Company a competitive advantage in attracting, retaining and motivating
officers, employees, directors and/or consultants and to provide the Company
and its Subsidiaries and Affiliates with a stock and incentive plan providing
incentives directly linked to stockholder value and (b) to assume and
govern other awards pursuant to the adjustment of awards granted under any IAC
Long Term Incentive Plan (as defined in the Employee Matters Agreement) in
accordance with the terms of the Employee Matters Agreement (“Adjusted Awards”). Certain terms used
herein have definitions given to them in the first place in which they are used.
In addition, for purposes of this Plan, the following terms are defined as set
forth below:


 


(a)  “Affiliate”
means a corporation or other entity controlled by, controlling or under common
control with, the Company.


 


(b)  “Applicable Exchange”
means Nasdaq or such other securities exchange as may at the applicable time be
the principal market for the Common Stock.


 


(c)  “Award” means
an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit,
or other stock-based award granted or assumed pursuant to the terms of this
Plan, including Adjusted Awards.


 


(d)  “Award Agreement”
means a written or electronic document or agreement setting forth the terms and
conditions of a specific Award.


 


(e)  “Beneficial Ownership”
shall have the meaning given in Rule 13d-3 promulgated under the Exchange
Act.


 


(f)  “Board” means
the Board of Directors of the Company.


 


(g)  “Bonus Award”
means a bonus award made pursuant to Section 9.


 


(h)  “Cause” means,
unless otherwise provided in an Award Agreement, (i) “Cause” as defined in
any Individual Agreement to which the applicable Participant is a party, or (ii) if
there is no such Individual Agreement or if it does not define Cause:  (A) the willful or gross neglect by a
Participant of his employment duties; (B) the plea of guilty or nolo contendere to, or conviction for, the
commission of a felony offense by a Participant; (C) a material breach by
a Participant of a fiduciary duty owed to the Company or any of its
subsidiaries; (D) a material breach by a Participant of any nondisclosure,
non-solicitation or non-competition obligation owed to the Company or any of
its Affiliates; or (E) before a Change in Control, such other events as
shall be determined by the Committee and set forth in a Participant’s Award
Agreement. Notwithstanding the general rule of Section 2(c),
following a Change in Control, any determination by the Committee as to whether
“Cause” exists shall be subject to de novo
review.


 


1

















 


(i)  “Change in Control”
has the meaning set forth in Section 10(c).


 


(j)  “Code” means
the Internal Revenue Code of 1986, as amended from time to time, and any
successor thereto, the Treasury Regulations thereunder and other relevant
interpretive guidance issued by the Internal Revenue Service or the Treasury
Department.  Reference to any specific
section of the Code shall be deemed to include such regulations and guidance,
as well as any successor provision of the Code.


 


(k)  “Commission”
means the Securities and Exchange Commission or any successor agency.


 


(l)  “Committee” has
the meaning set forth in Section 2(a).


 


(m)  “Common Stock”
means common stock, par value $0.01 per share, of the Company.


 


(n)  “Company” means
HSNi, Inc., a Delaware corporation, or its successor.


 


(o)  “Disability”
means (i) “Disability” as defined in any Individual Agreement to which the
Participant is a party, or (ii) if there is no such Individual Agreement
or it does not define “Disability,” (A) permanent and total disability as
determined under the Company’s long-term disability plan applicable to the
Participant, or (B) if there is no such plan applicable to the Participant
or the Committee determines otherwise in an applicable Award Agreement, “Disability”
as determined by the Committee.  Notwithstanding
the above, with respect to an Incentive Stock Option, Disability shall mean
Permanent and Total Disability as defined in Section 22(e)(3) of the
Code and, with respect to all Awards, to the extent required by Section 409A
of the Code, “disability” within the meaning of Section 409A of the Code.


 


(p)  “Disaffiliation”
means a Subsidiary’s or Affiliate’s ceasing to be a Subsidiary or Affiliate for
any reason (including, without limitation, as a result of a public offering, or
a spinoff or sale by the Company, of the stock of the Subsidiary or Affiliate)
or a sale of a division of the Company and its Affiliates.


 


(q)  “EBITA” means
for any period, operating profit (loss) plus (i) amortization, including
goodwill impairment, (ii) amortization of non-cash distribution and
marketing expense and non-cash compensation expense, (iii) restructuring
charges, (iv) non-cash write-downs of assets or goodwill, (v) charges
relating to disposal of lines of business, (vi) litigation settlement
amounts and (vii) costs incurred for proposed and completed acquisitions.


 


(r)  “EBITDA” means
for any period, operating profit (loss) plus (i) depreciation and
amortization, including goodwill impairment, (ii) amortization of non-cash
distribution and marketing expense and non-cash compensation expense, (iii) restructuring
charges, (iv) non-cash write-downs of assets or goodwill, (v) charges
relating to disposal of lines of business, (vi) litigation settlement
amounts and (vii) costs incurred for proposed and completed acquisitions.


 


(s)  “Eligible Individuals”
means directors, officers, employees and consultants of the Company or any of
its Subsidiaries or Affiliates, and prospective employees and consultants who
have accepted offers of employment or consultancy from the Company or its
Subsidiaries or Affiliates.


 


2

















 


(t)  “Employee Matters
Agreement” means the Employee Matters Agreement by and among IAC,
Ticketmaster, Interval Leisure Group, Inc., HSN, Inc. and Tree.com, Inc.


 


(u)  “Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time, and
any successor thereto.


 


(v)  “Fair Market Value”
means, unless otherwise determined by the Committee, the closing price of a
share of Common Stock on the Applicable Exchange on the date of measurement, or
if Shares were not traded on the Applicable Exchange on such measurement date,
then on the next preceding date on which Shares were traded, all as reported by
such source as the Committee may select. If the Common Stock is not listed on a
national securities exchange, Fair Market Value shall be determined by the
Committee in its good faith discretion, taking into account, to the extent
appropriate, the requirements of Section 409A of the Code.


 


(w)  “Free-Standing SAR”
has the meaning set forth in Section 5(b).


 


(x)  “Grant Date”
means (i) the date on which the Committee by resolution selects an
Eligible Individual to receive a grant of an Award and determines the number of
Shares to be subject to such Award or the formula for earning a number of
shares or cash amount, (ii) such later date as the Committee shall provide
in such resolution or (iii) the initial date on which an Adjusted Award
was granted under the IAC Long Term Incentive Plan.


 


(y)  “Group” shall have
the meaning given in Section 13(d)(3) and 14(d)(2) of the
Exchange Act.


 


(z)  “IAC” means
IAC/InterActiveCorp, a Delaware corporation.


 


(aa)  “Incentive Stock Option” means any Option that is designated
in the applicable Award Agreement as an “incentive stock option” within the
meaning of Section 422 of the Code, and that in fact so qualifies.


 


(bb)  “Individual Agreement” means an employment, consulting or
similar agreement between a Participant and the Company or one of its
Subsidiaries or Affiliates.


 


(cc)  “Nasdaq” means the National Association of Securities Dealers
Inc. Automated Quotation System.


 


(dd)  “Nonqualified Option” means any Option that is not an
Incentive Stock Option.


 


(ee)  “Option” means an Award granted under Section 5.


 


(ff)  “Participant” means an Eligible Individual to whom an Award
is or has been granted.


 


(gg)  “Performance Goals” means the performance goals established
by the Committee in connection with the grant of Restricted Stock, Restricted
Stock Units or Bonus Awards or other stock-based awards. In the case of
Qualified-Performance Based Awards, (i) such goals shall be based on the
attainment of one or any combination of the following: specified levels of


 


3

















 


earnings
per share from continuing operations, net profit after tax, EBITDA, EBITA,
gross profit, cash generation, unit volume, market share, sales, asset quality,
earnings per share, operating income, revenues, return on assets, return on
operating assets, return on equity, profits, total stockholder return (measured
in terms of stock price appreciation and/or dividend growth), cost saving
levels, marketing-spending efficiency, core non-interest income, change in
working capital, return on capital, and/or stock price, with respect to the
Company or any Subsidiary, Affiliate, division or department of the Company and
(ii) such Performance Goals shall be set by the Committee within the time
period prescribed by Section 162(m) of the Code and related
regulations. Such Performance Goals also may be based upon the attaining of
specified levels of Company, Subsidiary, Affiliate or divisional performance
under one or more of the measures described above relative to the performance
of other entities, divisions or subsidiaries.


 


(hh)  “Plan” means this HSNi, Inc. 2008 Stock and Annual
Incentive Plan, as set forth herein and as hereafter amended from time to time.


 


(ii)  “Plan Year”
means the calendar year or, with respect to Bonus Awards, the Company’s fiscal
year if different.


 


(jj)  “Qualified Performance-Based Award” means an Award intended
to qualify for the Section 162(m) Exemption, as provided in Section 11.


 


(kk)  “Restricted Stock” means an Award granted under Section 6.


 


(ll)  “Restricted Stock Units” means an Award granted under Section 7.


 


(mm)  “Resulting Voting Power” shall mean the outstanding combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors (or equivalent governing body, if
applicable) of the entity resulting from a Business Combination (including,
without limitation, an entity which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries).


 


(nn)  “Retirement” means retirement from active employment with the
Company, a Subsidiary or Affiliate at or after the Participant’s attainment of
age 65.


 


(oo)  “Section 162(m) Exemption” means the exemption from
the limitation on deductibility imposed by Section 162(m) of the Code
that is set forth in Section 162(m)(4)(C) of the Code.


 


(pp)  “Separation” has the meaning set forth in the Employee
Matters Agreement.


 


(qq)  “Share” means a share of Common Stock.


 


(rr)  “Stock Appreciation Right” has the meaning set forth in Section 5(b).


 


(ss)  “Subsidiary” means any corporation, partnership, joint
venture, limited liability company or other entity during any period in which
at least a 50% voting or profits interest is owned, directly or indirectly, by
the Company or any successor to the Company.


 


4

















 


(tt)  “Tandem SAR” has the meaning set forth in Section 5(b).


 


(uu)  “Term” means the maximum period during which an Option or
Stock Appreciation Right may remain outstanding, subject to earlier termination
upon Termination of Employment or otherwise, as specified in the applicable
Award Agreement.


 


(vv)  “Termination of Employment” means the termination of the
applicable Participant’s employment with, or performance of services for, the
Company and any of its Subsidiaries or Affiliates. Unless otherwise determined
by the Committee, if a Participant’s employment with, or membership on a board
of directors of the Company and its Affiliates terminates but such Participant
continues to provide services to the Company and its Affiliates in a
non-employee director capacity or as an employee, as applicable, such change in
status shall not be deemed a Termination of Employment. A Participant employed
by, or performing services for, a Subsidiary or an Affiliate or a division of
the Company and its Affiliates shall be deemed to incur a Termination of
Employment if, as a result of a Disaffiliation, such Subsidiary, Affiliate, or
division ceases to be a Subsidiary, Affiliate or division, as the case may be,
and the Participant does not immediately thereafter become an employee of (or
service provider for), or member of the board of directors of, the Company or
another Subsidiary or Affiliate. Temporary absences from employment because of
illness, vacation or leave of absence and transfers among the Company and its
Subsidiaries and Affiliates shall not be considered Terminations of
Employment.  Notwithstanding the
foregoing, with respect to any Award that constitutes “nonqualified deferred
compensation” within the meaning of Section 409A of the Code, “Termination
of Employment” shall mean a “separation from service” as defined under Section 409A
of the Code.  For the avoidance of doubt,
the Separation shall not constitute a Termination of Employment for purposes of
any Adjusted Award.


 


SECTION 2. 
Administration


 


(a)  Committee.  The Plan shall be administered by the
Compensation Committee of the Board or such other committee of the Board as the
Board may from time to time designate (the “Committee”), which shall be
composed of not less than two directors, and shall be appointed by and serve at
the pleasure of the Board. The Committee shall, subject to Section 11,
have plenary authority to grant Awards pursuant to the terms of the Plan to
Eligible Individuals. Among other things, the Committee shall have the
authority, subject to the terms and conditions of the Plan and the Employee
Matters Agreement (including the original terms of the grant of the Adjusted
Award):


 


(i)  to select the Eligible Individuals to whom Awards may from
time to time be granted;


 


(ii)  to determine whether and to what extent Incentive Stock
Options, Nonqualified Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, other stock-based awards, or any combination thereof,
are to be granted hereunder;


 


(iii)  to determine the number of Shares to be covered by each
Award granted hereunder;


 


5

















 


(iv)  to determine the terms and conditions of each Award granted
hereunder, based on such factors as the Committee shall determine;


 


(v)  subject to Section 12, to modify, amend or adjust the
terms and conditions of any Award;


 


(vi)  to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall from time to time deem
advisable;


 


(vii)  subject to Section 11, to accelerate the vesting or
lapse of restrictions of any outstanding Award, based in each case on such
considerations as the Committee in its sole discretion determines;


 


(viii)  to interpret the terms and provisions of the Plan and any
Award issued under the Plan (and any agreement relating thereto);


 


(ix)  to establish any “blackout” period that the Committee in its
sole discretion deems necessary or advisable;


 


(x)  to determine whether, to what extent, and under what
circumstances cash, Shares, and other property and other amounts payable with
respect to an Award under this Plan shall be deferred either automatically or
at the election of the Participant;


 


(xi)  to decide all other matters
that must be determined in connection with an Award; and


 


(xii)  to otherwise administer
the Plan.


 


(b)  Procedures.


 


(i)  The Committee may act only by a majority of its members then
in office, except that the Committee may, except to the extent prohibited by
applicable law or the listing standards of the Applicable Exchange and subject
to Section 11, allocate all or any portion of its responsibilities and
powers to any one or more of its members and may delegate all or any part of
its responsibilities and powers to any person or persons selected by it.


 


(ii)  Subject to Section 11(c), any authority granted to the
Committee may also be exercised by the full Board. To the extent that any
permitted action taken by the Board conflicts with action taken by the
Committee, the Board action shall control.


 


(c)  Discretion of Committee.  Subject to Section 1(h), any
determination made by the Committee or by an appropriately delegated officer
pursuant to delegated authority under the provisions of the Plan with respect
to any Award shall be made in the sole discretion of the Committee or such
delegate at the time of the grant of the Award or, unless in contravention of
any express term of the Plan, at any time thereafter. All decisions made by the
Committee or any appropriately delegated officer pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Company,
Participants, and Eligible Individuals.


 


6

















 


(d)  Award Agreements.  The terms and conditions of each Award, as
determined by the Committee, shall be set forth in an Award Agreement, which
shall be delivered to the Participant receiving such Award upon, or as promptly
as is reasonably practicable following, the grant of such Award. The
effectiveness of an Award shall not be subject to the Award Agreement’s being
signed by the Company and/or the Participant receiving the Award unless
specifically so provided in the Award Agreement. Award Agreements may be
amended only in accordance with Section 12 hereof.


 


SECTION 3.  Common
Stock Subject to Plan


 


(a)  Plan Maximums.  The maximum number of Shares that may be
delivered pursuant to Awards under the Plan shall be the sum of (a) the
number of Shares that may be issuable upon exercise or vesting of the Adjusted
Awards and (b) 5,000,000. The maximum number of Shares that may be granted
pursuant to Options intended to be Incentive Stock Options shall be 3,333,333
Shares.  Shares subject to an Award under
the Plan may be authorized and unissued Shares or may be treasury Shares.


 


(b)  Individual Limits.  No Participant may be granted Awards covering
in excess of 1,466,666 Shares during the term of the Plan; provided that Adjusted Awards shall not be
subject to this limitation.


 


(c)  Rules for Calculating
Shares Delivered.


 


(i)  With respect to Awards other than Adjusted Awards, to the
extent that any Award is forfeited, or any Option and the related Tandem SAR
(if any) or Free-Standing SAR terminates, expires or lapses without being
exercised, or any Award is settled for cash, the Shares subject to such Awards
not delivered as a result thereof shall again be available for Awards under the
Plan.


 


(ii)  With respect to Awards other than Adjusted Awards, if the
exercise price of any Option and/or the tax withholding obligations relating to
any Award are satisfied by delivering Shares to the Company (by either actual
delivery or by attestation), only the number of Shares issued net of the Shares
delivered or attested to shall be deemed delivered for purposes of the limits
set forth in Section 3(a). To the extent any Shares subject to an Award
are withheld to satisfy the exercise price (in the case of an Option) and/or
the tax withholding obligations relating to such Award, such Shares shall not
be deemed to have been delivered for purposes of the limits set forth in Section 3(a).


 


(d)  Adjustment Provision.  In the event of a merger, consolidation,
acquisition of property or shares, stock rights offering, liquidation,
Disaffiliation, or similar event affecting the Company or any of its
Subsidiaries (each, a “Corporate Transaction”), the Committee or the Board may
in its discretion make such substitutions or adjustments as it deems
appropriate and equitable to (i) the aggregate number and kind of Shares
or other securities reserved for issuance and delivery under the Plan, (ii) the
various maximum limitations set forth in Sections 3(a) and 3(b) upon
certain types of Awards and upon the grants to individuals of certain types of
Awards, (iii) the number and kind of Shares or other securities subject to
outstanding Awards; and (iv) the exercise price of outstanding Options and
Stock Appreciation Rights. In the event of a stock


 


7

















 


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 (each, a “Share Change”), the Committee or the Board shall make such
substitutions or adjustments as it deems appropriate and equitable to (i) the
aggregate number and kind of Shares or other securities reserved for issuance
and delivery under the Plan, (ii) the various maximum limitations set
forth in Sections 3(a) and 3(b) upon certain types of Awards and upon
the grants to individuals of certain types of Awards, (iii) the number and
kind of Shares or other securities subject to outstanding Awards; and (iv) the
exercise price of outstanding Options and Stock Appreciation Rights. In the
case of Corporate Transactions, such adjustments may include, without
limitation, (1) the cancellation of outstanding Awards in exchange for
payments of cash, property or a combination thereof having an aggregate value
equal to the value of such Awards, as determined by the Committee or the Board
in its sole discretion (it being understood that in the case of a Corporate
Transaction with respect to which stockholders of Common Stock receive
consideration other than publicly traded equity securities of the ultimate
surviving entity, any such determination by the Committee that the value of an
Option or Stock Appreciation Right shall for this purpose be deemed to equal
the excess, if any, of the value of the consideration being paid for each Share
pursuant to such Corporate Transaction over the exercise price of such Option
or Stock Appreciation Right shall conclusively be deemed valid); (2) the
substitution of other property (including, without limitation, cash or other
securities of the Company and securities of entities other than the Company)
for the Shares subject to outstanding Awards; and (3) in connection with
any Disaffiliation, arranging for the assumption of Awards, or replacement of
Awards with new awards based on other property or other securities (including,
without limitation, other securities of the Company and securities of entities
other than the Company), by the affected Subsidiary, Affiliate, or division or
by the entity that controls such Subsidiary, Affiliate, or division following
such Disaffiliation (as well as any corresponding adjustments to Awards that
remain based upon Company securities). The Committee may adjust in its sole
discretion the Performance Goals applicable to any Awards to reflect any Share
Change and any Corporate Transaction and any unusual or non-recurring events
and other extraordinary items, impact of charges for restructurings,
discontinued operations, and the cumulative effects of accounting or tax
changes, each as defined by generally accepted accounting principles or as
identified in the Company’s financial statements, notes to the financial
statements, management’s discussion and analysis or the Company’s other SEC
filings,  provided that in the case of Performance Goals applicable to
any Qualified Performance-Based Awards, such adjustment does not violate Section 162(m) of
the Code.  Any adjustment under this Section 3(d) need
not be the same for all Participants.


 


(e)  Section 409A.  Notwithstanding the foregoing: (i) any
adjustments made pursuant to Section 3(d) to Awards that are
considered “deferred compensation” within the meaning of Section 409A of
the Code shall be made in compliance with the requirements of Section 409A
of the Code; (ii) any adjustments made pursuant to Section 3(d) to
Awards that are not considered “deferred compensation” subject to Section 409A
of the Code shall be made in such a manner as to ensure that after such
adjustment, the Awards either (A) continue not to be subject to Section 409A
of the Code or (B) comply with the requirements of Section 409A of
the Code; and (iii) in any event, neither the Committee nor the Board
shall have the authority to make any adjustments pursuant to Section 3(d) to
the extent the existence of such authority would cause an Award that


 


8

















 


is
not intended to be subject to Section 409A of the Code at the Grant Date
to be subject thereto as of the Grant Date.


 


SECTION 4. 
Eligibility


 


Awards may be granted under the Plan to Eligible
Individuals and, with respect to Adjusted Awards, in accordance with the terms
of the Employee Matters Agreement; provided,
however, that Incentive Stock
Options may be granted only to employees of the Company and its subsidiaries or
parent corporation (within the meaning of Section 424(f) of the Code)
and, with respect to Adjusted Awards that are intended to qualify as incentive
stock options within the meaning of Section 421 of the Code, in accordance
with the terms of the Employee Matters Agreement.


 


SECTION 5. 
Options and Stock Appreciation Rights


 


With respect to Adjusted Awards, the provisions
below will be applicable only to the extent that they are not inconsistent with
the Employee Matters Agreement and the terms of the Adjusted Award assumed
under the Employee Matters Agreement:


 


(a)  Types of Options.  Options may be of two types: Incentive Stock
Options and Nonqualified Options. The Award Agreement for an Option shall
indicate whether the Option is intended to be an Incentive Stock Option or a
Nonqualified Option.


 


(b)  Types and Nature of Stock
Appreciation Rights.  Stock
Appreciation Rights may be “Tandem SARs,” which are granted in conjunction with
an Option, or “Free-Standing SARs,” which are not granted in conjunction with
an Option. Upon the exercise of a Stock Appreciation Right, the Participant
shall be entitled to receive an amount in cash, Shares, or both, in value equal
to the product of (i) the excess of the Fair Market Value of one Share
over the exercise price of the applicable Stock Appreciation Right, multiplied
by (ii) the number of Shares in respect of which the Stock Appreciation
Right has been exercised. The applicable Award Agreement shall specify whether
such payment is to be made in cash or Common Stock or both, or shall reserve to
the Committee or the Participant the right to make that determination prior to
or upon the exercise of the Stock Appreciation Right.


 


(c)  Tandem SARs.  A Tandem SAR may be granted at the Grant Date
of the related Option. A Tandem SAR shall be exercisable only at such time or
times and to the extent that the related Option is exercisable in accordance
with the provisions of this Section 5, and shall have the same exercise
price as the related Option. A Tandem SAR shall terminate or be forfeited upon
the exercise or forfeiture of the related Option, and the related Option shall
terminate or be forfeited upon the exercise or forfeiture of the Tandem SAR.


 


(d)  Exercise Price.  The exercise price per Share subject to an
Option or Free-Standing SAR shall be determined by the Committee and set forth
in the applicable Award Agreement, and shall not be less than the Fair Market
Value of a share of the Common Stock on the applicable Grant Date. In no event
may any Option or Free-Standing SAR granted under this Plan be amended, other
than pursuant to Section 3(d), to decrease the exercise price thereof, be
cancelled in conjunction with the grant of any new Option or Free-Standing SAR
with a lower exercise price or otherwise be subject to any action that would be
treated, for accounting


 


9

















 


purposes,
as a “repricing” of such Option or Free-Standing SAR, unless such amendment,
cancellation, or action is approved by the Company’s stockholders.


 


(e)  Term.  The Term of each Option and each
Free-Standing SAR shall be fixed by the Committee, but shall not exceed ten
years from the Grant Date.


 


(f)  Vesting and Exercisability.  Except as otherwise provided herein, Options
and Free-Standing SARs shall be exercisable at such time or times and subject
to such terms and conditions as shall be determined by the Committee. If the
Committee provides that any Option or Free-Standing SAR will become exercisable
only in installments, the Committee may at any time waive such installment
exercise provisions, in whole or in part, based on such factors as the
Committee may determine. In addition, the Committee may at any time accelerate
the exercisability of any Option or Free-Standing SAR.


 


(g)  Method of Exercise.  Subject to the provisions of this Section 5,
Options and Free-Standing SARs may be exercised, in whole or in part, at any
time during the applicable Term by giving written notice of exercise to the
Company or through the procedures established with the Company’s appointed
third-party Option administrator specifying the number of Shares as to which
the Option or Free-Standing SAR is being exercised; provided, however,
that, unless otherwise permitted by the Committee, any such exercise must be
with respect to a portion of the applicable Option or Free-Standing SAR
relating to no less than the lesser of the number of Shares then subject to
such Option or Free-Standing SAR or 100 Shares. In the case of the exercise of
an Option, such notice shall be accompanied by payment in full of the purchase
price (which shall equal the product of such number of Shares multiplied by the
applicable exercise price) by certified or bank check or such other instrument
as the Company may accept. If approved by the Committee, payment, in full or in
part, may also be made as follows:


 


(i)  Payments may be made in the form of unrestricted Shares (by
delivery of such Shares or by attestation) of the same class as the Common
Stock subject to the Option already owned by the Participant (based on the Fair
Market Value of the Common Stock on the date the Option is exercised); provided, however,
that, in the case of an Incentive Stock Option, the right to make a payment in
the form of already owned Shares of the same class as the Common Stock subject
to the Option may be authorized only at the time the Option is granted.


 


(ii)  To the extent permitted by applicable law, payment may be
made by delivering a properly executed exercise notice to the Company, together
with a copy of irrevocable instructions to a broker to deliver promptly to the
Company the amount of sale or loan proceeds necessary to pay the purchase
price, and, if requested, the amount of any federal, state, local or foreign
withholding taxes. To facilitate the foregoing, the Company may, to the extent
permitted by applicable law, enter into agreements for coordinated procedures
with one or more brokerage firms. To the extent permitted by applicable law,
the Committee may also provide for Company loans to be made for purposes of the
exercise of Options.


 


(iii)  Payment may be made by instructing the Company to withhold
a number of Shares having a Fair Market Value (based on the Fair Market Value
of the Common Stock on the date the applicable Option is exercised) equal to
the product of (A) the exercise price multiplied by (B) the number of
Shares in respect of which the Option shall have been exercised.


 


10

















 


(h)  Delivery; Rights of
Stockholders.  No Shares shall
be delivered pursuant to the exercise of an Option until the exercise price
therefor has been fully paid and applicable taxes have been withheld. The
applicable Participant shall have all of the rights of a stockholder of the
Company holding the class or series of Common Stock that is subject to the
Option or Stock Appreciation Right (including, if applicable, the right to vote
the applicable Shares and the right to receive dividends), when the Participant
(i) has given written notice of exercise, (ii) if requested, has
given the representation described in Section 14(a), and (iii) in the
case of an Option, has paid in full for such Shares.


 


(i)  Terminations of Employment.  Subject to Section 10, a Participant’s
Options and Stock Appreciation Rights shall be forfeited upon such Participant’s
Termination of Employment, except as set forth below:


 


(i)  Upon a Participant’s Termination of Employment by reason of
death, any Option or Stock Appreciation Right held by the Participant that was
exercisable immediately before the Termination of Employment may be exercised
at any time until the earlier of (A) the first anniversary of the date of
such death and (B) the expiration of the Term thereof;


 


(ii)  Upon a Participant’s Termination of Employment by reason of
Disability or Retirement, any Option or Stock Appreciation Right held by the
Participant that was exercisable immediately before the Termination of
Employment may be exercised at any time until the earlier of (A) the first
anniversary of such Termination of Employment and (B) the expiration of
the Term thereof;


 


(iii)  Upon a Participant’s Termination of Employment for Cause,
any Option or Stock Appreciation Right held by the Participant shall be
forfeited, effective as of such Termination of Employment;


 


(iv)  Upon a Participant’s Termination of Employment for any
reason other than death, Disability, Retirement or for Cause, any Option or
Stock Appreciation Right held by the Participant that was exercisable
immediately before the Termination of Employment may be exercised at any time
until the earlier of (A) the 90th day following such Termination of
Employment and (B) expiration of the Term thereof; and


 


(v)  Notwithstanding the above provisions of this Section 5(i),
if a Participant dies after such Participant’s Termination of Employment but
while any Option or Stock Appreciation Right remains exercisable as set forth
above, such Option or Stock Appreciation Right may be exercised at any time
until the later of (A) the earlier of (1) the first anniversary of
the date of such death and (2) expiration of the Term thereof and (B) the
last date on which such Option or Stock Appreciation Right would have been
exercisable, absent this Section 5(i)(v).


 


Notwithstanding
the foregoing, the Committee shall have the power, in its discretion, to apply
different rules concerning the consequences of a Termination of
Employment; provided, however, that if such rules are less
favorable to the Participant than those set forth above, such rules are
set forth in the applicable Award Agreement. If an Incentive Stock Option is
exercised after the expiration of the exercise periods that apply for purposes
of Section 422 of the Code, such Option will thereafter be treated as a
Nonqualified Option.


 


11

















 


(j)  Nontransferability of
Options and Stock Appreciation Rights.  No Option or Free-Standing SAR shall be
transferable by a Participant other than (i) by will or by the laws of
descent and distribution, or (ii) in the case of a Nonqualified Option or
Free-Standing SAR, pursuant to a qualified domestic relations order or as
otherwise expressly permitted by the Committee including, if so permitted,
pursuant to a transfer to the Participant’s family members or to a charitable
organization, whether directly or indirectly or by means of a trust or
partnership or otherwise. For purposes of this Plan, unless otherwise
determined by the Committee, “family member” shall have the meaning given to
such term in General Instructions A.1(a)(5) to Form S-8 under the
Securities Act of 1933, as amended, and any successor thereto. A Tandem SAR
shall be transferable only with the related Option as permitted by the
preceding sentence. Any Option or Stock Appreciation Right shall be
exercisable, subject to the terms of this Plan, only by the applicable
Participant, the guardian or legal representative of such Participant, or any
person to whom such Option or Stock Appreciation Right is permissibly
transferred pursuant to this Section 5(j), it being understood that the
term “Participant” includes such guardian, legal representative and other
transferee; provided, however, that the term “Termination of
Employment” shall continue to refer to the Termination of Employment of the
original Participant.


 


SECTION 6. 
Restricted Stock


 


With respect to Adjusted Awards, the provisions
below will be applicable only to the extent that they are not inconsistent with
the Employee Matters Agreement and the terms of the Adjusted Award assumed
under the Employee Matters Agreement:


 


(a)  Nature of Awards and Certificates.  Shares of Restricted Stock are actual Shares
issued to a Participant, and shall be evidenced in such manner as the Committee
may deem appropriate, including book-entry registration or issuance of one or
more stock certificates. Any certificate issued in respect of Shares of
Restricted Stock shall be registered in the name of the applicable Participant
and, in the case of Restricted Stock, shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:


 


“The
transferability of this certificate and the shares of stock represented hereby
are subject to the terms and conditions (including forfeiture) of the HSNi, Inc.
2008 Stock and Annual Incentive Plan and an Award Agreement. Copies of such
Plan and Agreement are on file at the offices of HSNi, Inc.,1 HSN Drive,
St. Petersburg, Florida 33729.”


 


The
Committee may require that the certificates evidencing such shares be held in
custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the applicable
Participant shall have delivered a stock power, endorsed in blank, relating to
the Common Stock covered by such Award.


 


(b)  Terms and Conditions.  Shares of Restricted Stock shall be subject
to the following terms and conditions:


 


(i)  The Committee shall, prior to or at the time of grant,
condition the vesting or transferability of an Award of Restricted Stock upon
the continued service of the applicable


 


12

















 


Participant
or the attainment of Performance Goals, or the attainment of Performance Goals
and the continued service of the applicable Participant. In the event that the
Committee conditions the grant or vesting of an Award of Restricted Stock upon
the attainment of Performance Goals or the attainment of Performance Goals and
the continued service of the applicable Participant, the Committee may, prior
to or at the time of grant, designate such an Award as a Qualified
Performance-Based Award. The conditions for grant, vesting, or transferability
and the other provisions of Restricted Stock Awards (including without
limitation any Performance Goals) need not be the same with respect to each
Participant.


 


(ii)  Subject to the provisions of the Plan and the applicable
Award Agreement, during the period, if any, set by the Committee, commencing
with the date of such Restricted Stock Award for which such vesting
restrictions apply and until the expiration of such vesting restrictions (the “Restriction
Period”), the Participant shall not be permitted to sell, assign, transfer,
pledge or otherwise encumber Shares of Restricted Stock.


 


(iii)  Except as provided in this Section 6 and in the
applicable Award Agreement, the applicable Participant shall have, with respect
to the Shares of Restricted Stock, all of the rights of a stockholder of the
Company holding the class or series of Common Stock that is the subject of the
Restricted Stock, including, if applicable, the right to vote the Shares and
the right to receive any cash dividends. If so determined by the Committee in
the applicable Award Agreement and subject to Section 14(e), (A) cash
dividends on the class or series of Common Stock that is the subject of the Restricted
Stock Award shall be automatically deferred and reinvested in additional
Restricted Stock, held subject to the vesting of the underlying Restricted
Stock, and (B) subject to any adjustment pursuant to Section 3(d),
dividends payable in Common Stock shall be paid in the form of Restricted Stock
of the same class as the Common Stock with which such dividend was paid, held
subject to the vesting of the underlying Restricted Stock.


 


(iv)  Except as otherwise set forth in the applicable Award
Agreement, upon a Participant’s Termination of Employment for any reason during
the Restriction Period, all Shares of Restricted Stock still subject to
restriction shall be forfeited by such Participant; provided, however,
that subject to Section 11(b), the Committee shall have the discretion to
waive, in whole or in part, any or all remaining restrictions with respect to
any or all of such Participant’s Shares of Restricted Stock.


 


(v)  If and when any applicable Performance Goals are satisfied
and the Restriction Period expires without a prior forfeiture of the Shares of
Restricted Stock for which legended certificates have been issued, unlegended
certificates for such Shares shall be delivered to the Participant upon
surrender of the legended certificates.


 


SECTION 7. 
Restricted Stock Units


 


With respect to Adjusted Awards, the provisions
below will be applicable only to the extent that they are not inconsistent with
the  Employee Matters Agreement and the
terms of the Adjusted Award assumed under the Employee Matters Agreement:


 


13














 


(a) 
Nature of Awards.  Restricted Stock Units are Awards denominated
in Shares that will be settled, subject to the terms and conditions of the
Restricted Stock Units, in an amount in cash, Shares or both, based upon the
Fair Market Value of a specified number of Shares.


 


(b) 
Terms and Conditions.  Restricted Stock Units shall be subject to
the following terms and conditions:


 


(i) 
The Committee shall, prior to or at the time of grant, condition the grant,
vesting, or transferability of Restricted Stock Units upon the continued
service of the applicable Participant or the attainment of Performance Goals,
or the attainment of Performance Goals and the continued service of the
applicable Participant. In the event that the Committee conditions the grant or
vesting of Restricted Stock Units upon the attainment of Performance Goals or
the attainment of Performance Goals and the continued service of the applicable
Participant, the Committee may, prior to or at the time of grant, designate
such Awards as Qualified Performance-Based Awards. The conditions for grant,
vesting or transferability and the other provisions of Restricted Stock Units
(including without limitation any Performance Goals) need not be the same with
respect to each Participant. An Award of Restricted Stock Units shall be
settled as and when the Restricted Stock Units vest or at a later time
specified by the Committee or in accordance with an election of the
Participant, if the Committee so permits.


 


(ii) 
Subject to the provisions of the Plan and the applicable Award Agreement,
during the period, if any, set by the Committee, commencing with the date of
such Restricted Stock Units for which such vesting restrictions apply and until
the expiration of such vesting restrictions (the “Restriction Period”), the
Participant shall not be permitted to sell, assign, transfer, pledge or
otherwise encumber Restricted Stock Units.


 


(iii) 
The Award Agreement for Restricted Stock Units shall specify whether, to what
extent and on what terms and conditions the applicable Participant shall be
entitled to receive current or deferred payments of cash, Common Stock or other
property corresponding to the dividends payable on the Common Stock (subject to
Section 14(e) below).


 


(iv) 
Except as otherwise set forth in the applicable Award Agreement, upon a
Participant’s Termination of Employment for any reason during the Restriction
Period, all Restricted Stock Units still subject to restriction shall be
forfeited by such Participant; provided,
however, that subject to Section 11(b),
the Committee shall have the discretion to waive, in whole or in part, any or
all remaining restrictions with respect to any or all of such Participant’s
Restricted Stock Units.


 


SECTION 8.  Other Stock-Based Awards


 


Other
Awards of Common Stock and other Awards that are valued in whole or in part by
reference to, or are otherwise based upon or settled in, Common Stock,
including (without limitation), unrestricted stock, performance units, dividend
equivalents, and convertible debentures, may be granted under the Plan.


 


14

















 


SECTION 9.  Bonus Awards


 


(a) 
Determination of Awards.  The Committee shall determine the total
amount of Bonus Awards for each Plan Year or such shorter performance period as
the Committee may establish in its sole discretion. Prior to the beginning of
the Plan Year or such shorter performance period as the Committee may establish
in its sole discretion (or such later date as may be prescribed by the Internal
Revenue Service under Section 162(m) of the Code), the Committee
shall establish Performance Goals for Bonus Awards for the Plan Year or such
shorter period; provided, that
such Performance Goals may be established at a later date for Participants who
are not “covered employees” (within the meaning of Section 162(m)(3) of
the Code). Bonus amounts payable to any individual Participant with respect to
a Plan Year will be limited to a maximum of $10 million. For performance
periods that are shorter than a Plan Year, such $10 million maximum may be
pro-rated if so determined by the Committee.


 


(b) 
Payment of Awards.  Bonus Awards under the Plan shall be paid in
cash or in shares of Common Stock (valued at Fair Market Value as of the date
of payment) as determined by the Committee, as soon as practicable following
the close of the Plan Year or such shorter performance period as the Committee
may establish. It is intended that a Bonus Award will be paid no later than the
fifteenth (15th) day of the third month following the later
of: (i) the end of the Participant’s taxable year in which the
requirements for such Bonus Award have been satisfied by the Participant or (ii) the
end of the Company’s fiscal year in which the requirements for such Bonus Award
have been satisfied by the Participant. 
The Committee may at its option establish procedures pursuant to which
Participants are permitted to defer the receipt of Bonus Awards payable
hereunder. The Bonus Award for any Plan Year or such shorter performance period
to any Participant may be reduced or eliminated by the Committee in its
discretion.


 


SECTION 10.  Change in Control Provisions


 


(a) 
Adjusted Awards.  With respect to all Adjusted Awards, subject
to paragraph (e) of this Section 10, unless otherwise provided in the
applicable Award Agreement, notwithstanding any other provision of this Plan to
the contrary, upon a Participant’s Termination of Employment, during the
two-year period following a Change in Control, by the Company other than for
Cause or Disability or by the Participant for Good Reason (as defined below):


 


(i) 
any Options outstanding as of such Termination of Employment which were
outstanding as of the date of such Change in Control shall be fully exercisable
and vested and shall remain exercisable until the later of (i) the last
date on which such Option would be exercisable in the absence of this Section 10(a) and
(ii) the earlier of (A) the first anniversary of such Change in
Control and (B) expiration of the Term of such Option;


 


(ii) 
the restrictions and deferral limitations applicable to any Restricted Stock
shall lapse, and such Restricted Stock outstanding as of such Termination of
Employment which were outstanding as of the date of such Change in Control
shall become free of all restrictions and become fully vested and transferable;
and


 


(iii) 
all Restricted Stock Units outstanding as of such Termination of Employment
which were outstanding as of the date of such Change in Control shall be
considered to be earned and payable in full, and any restrictions shall lapse
and such Restricted Stock Units shall be


 


15

















 


settled as promptly as is
practicable in (subject to Section 3(d)) the form set forth in the
applicable Award Agreement.


 


(b) 
Impact of Event on Awards other than
Adjusted Awards.   Subject to paragraph (e) of this Section 10,
and paragraph (d) of Section 12, unless otherwise provided in any
applicable Award Agreement and except as otherwise provided in paragraph (a) of
this Section 10, in connection with a Change of Control, the Committee may
make such adjustments and/or settlements of outstanding Awards as it deems
appropriate and consistent with the Plan’s purposes, including, without
limitation, the acceleration of vesting of Awards either upon a Change of
Control or upon various terminations of employment following a Change of
Control.  The Committee may provide for
such adjustments as a term of the Award or may make such adjustments following
the granting of the Award.


 


(c) 
Definition of Change in Control.  For purposes of the Plan, unless otherwise
provided in an option agreement or other agreement relating to an Award, a “Change
in Control” shall mean the happening of any of the following events:


 


(i) 
The acquisition by any individual, entity or Group (a “Person”), other than the
Company, of Beneficial Ownership of equity securities of the Company
representing more than 50% of the voting power of the then outstanding equity
securities of the Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities”); provided,
however, that any acquisition
that would constitute a Change in Control under this subsection (i) that
is also a Business Combination shall be determined exclusively under subsection
(iii) below; or


 


(ii) 
Individuals who, as of the Effective Date, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a
director subsequent to the Effective Date, whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a
majority of the Incumbent Directors at such time shall become an Incumbent
Director, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board; or


 


(iii) 
Consummation of a reorganization, merger, consolidation, sale or other
disposition of all or substantially all of the assets of the Company, the
purchase of assets or stock of another entity, or other similar corporate
transaction (a “Business Combination”), in each case, unless immediately
following such Business Combination, (A) more than 50% of the Resulting
Voting Power shall reside in Outstanding Company Voting Securities retained by
the Company’s stockholders in the Business Combination and/or voting securities
received by such stockholders in the Business Combination on account of
Outstanding Company Voting Securities, and (B) at least a majority of the
members of the board of directors (or equivalent governing body, if applicable)
of the entity resulting from such Business Combination were Incumbent Directors
at the time of the initial agreement, or action of the Board, providing for
such Business Combination; or


 


16

















 


(iv) 
Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.


 


Notwithstanding
the foregoing, the Separation shall not constitute a Change in Control.  For the avoidance of doubt, with respect to
Adjusted Awards, any reference in an Award Agreement or the applicable IAC Long
Term Incentive Plan to a “change in control,” “change of control” or similar
definition shall be deemed to refer to a Change of Control hereunder.


 


(d) 
For purposes of this Section 10, “Good Reason” means (i) “Good Reason”
as defined in any Individual Agreement or Award Agreement to which the
applicable Participant is a party, or (ii) if there is no such Individual
Agreement or if it does not define Good Reason, without the Participant’s prior
written consent: (A) a material reduction in the Participant’s rate of
annual base salary from the rate of annual base salary in effect for such
Participant immediately prior to the Change in Control, (B) a relocation
of the Participant’s principal place of business more than 35 miles from the
city in which such Participant’s principal place of business was located
immediately prior to the Change in Control or (C) a material and
demonstrable adverse change in the nature and scope of the Participant’s duties
from those in effect immediately prior to the Change in Control.  In order to invoke a Termination of
Employment for Good Reason, a Participant shall provide written notice to the
Company of the existence of one or more of the conditions described in clauses (A) through
(C) within 90 days following the Participant’s knowledge of the initial
existence of such condition or conditions, and the Company shall have 30 days
following receipt of such written notice (the “Cure Period”) during which it
may remedy the condition.  In the event
that the Company fails to remedy the condition constituting Good Reason during
the Cure Period, the Participant must terminate employment, if at all, within
90 days following the Cure Period in order for such Termination of Employment
to constitute a Termination of Employment for Good Reason.


 


(e) 
Notwithstanding the foregoing, if any Award is subject to Section 409A of
the Code, this Section 10 shall be applicable only to the extent
specifically provided in the Award Agreement and as permitted pursuant to Section 14(k).


 


SECTION 11.  Qualified Performance-Based Awards; Section 16(b)


 


(a) 
The provisions of this Plan are intended to ensure that all Options and Stock
Appreciation Rights granted hereunder to any Participant who is or may be a “covered
employee” (within the meaning of Section 162(m)(3) of the Code) in
the tax year in which such Option or Stock Appreciation Right is expected to be
deductible to the Company qualify for the Section 162(m) Exemption,
and all such Awards shall therefore be considered Qualified Performance-Based
Awards and this Plan shall be interpreted and operated consistent with that
intention (including, without limitation, to require that all such Awards be
granted by a committee composed solely of members who satisfy the requirements
for being “outside directors” for purposes of the Section 162(m) Exemption
(“Outside Directors”)). When granting any Award other than an Option or Stock
Appreciation Right, the Committee may designate such Award as a Qualified Performance-Based
Award, based upon a determination that (i) the recipient is or may be a “covered
employee” (within the meaning of Section 162(m)(3) of the Code) with
respect to such Award, and (ii) the Committee wishes such Award to qualify
for the Section 162(m) Exemption, and the terms of any such Award
(and of the grant thereof) shall be


 


17

















 


consistent with such
designation (including, without limitation, that all such Awards be granted by
a committee composed solely of Outside Directors).


 


(b) 
Each Qualified Performance-Based Award (other than an Option or Stock
Appreciation Right) shall be earned, vested and payable (as applicable) only
upon the achievement of one or more Performance Goals (as certified in writing
by the Committee, except if compensation is attributable solely to the increase
in the value of the Common Stock), together with the satisfaction of any other
conditions, such as continued employment, as the Committee may determine to be
appropriate, and no Qualified Performance-Based Award may be amended, nor may
the Committee exercise any discretionary authority it may otherwise have under
this Plan with respect to a Qualified Performance-Based Award under this Plan,
in any manner that would cause the Qualified Performance-Based Award to cease
to qualify for the Section 162(m) Exemption; provided, however,
that (i) the Committee may provide, either in connection with the grant of
the applicable Award or by amendment thereafter, that achievement of such
Performance Goals will be waived upon the death or Disability of the
Participant or under any other circumstance with respect to which the existence
of such possible waiver will not cause the Award to fail to qualify for the Section 162(m) Exemption
as of the Grant Date, and (ii) the provisions of Section 10 shall
apply notwithstanding this Section 11(b).


 


(c) 
The full Board shall not be permitted to exercise authority granted to the
Committee to the extent that the grant or exercise of such authority would
cause an Award designated as a Qualified Performance-Based Award not to qualify
for, or to cease to qualify for, the Section 162(m) Exemption.


 


(d) 
The provisions of this Plan are intended to ensure that no transaction under
the Plan is subject to (and not exempt from) the short-swing recovery rules of
Section 16(b) of the Exchange Act (“Section 16(b)”).
Accordingly, the composition of the Committee shall be subject to such
limitations as the Board deems appropriate to permit transactions pursuant to
this Plan to be exempt (pursuant to Rule 16b-3 promulgated under the
Exchange Act) from Section 16(b), and no delegation of authority by the
Committee shall be permitted if such delegation would cause any such
transaction to be subject to (and not exempt from) Section 16(b).


 


SECTION 12.  Term, Amendment and Termination


 


(a) 
Effectiveness.  The Plan shall be effective as of the date
(the “Effective Date”) it is adopted by the Board, subject to the approval by
the holders of at least a majority of the voting power represented by
outstanding capital stock of the Company that is entitled generally to vote in
the election of directors.


 


(b) 
Termination.  The Plan will terminate on the tenth
anniversary of the Effective Date. Awards outstanding as of such date shall not
be affected or impaired by the termination of the Plan.


 


(c) 
Amendment of Plan.  The Board may amend, alter, or discontinue
the Plan, but no amendment, alteration or discontinuation shall be made which
would materially impair the rights of the Participant with respect to a
previously granted Award without such Participant’s consent, except such an
amendment made to comply with applicable law, including without limitation


 


18

















 


Section 409A of the
Code, stock exchange rules or accounting rules. In addition, no such
amendment shall be made without the approval of the Company’s stockholders to
the extent such approval is required by applicable law or the listing standards
of the Applicable Exchange.


 


(d) 
Amendment of Awards.  Subject to Section 5(d), the Committee
may unilaterally amend the terms of any Award theretofore granted, but no such
amendment shall cause a Qualified Performance-Based Award to cease to qualify
for the Section 162(m) Exemption or without the Participant’s consent
materially impair the rights of any Participant with respect to an Award,
except such an amendment made to cause the Plan or Award to comply with
applicable law, stock exchange rules or accounting rules.


 


SECTION 13.  Unfunded Status of Plan


 


It
is presently intended that the Plan constitute an “unfunded” plan for incentive
and deferred compensation. The Committee may authorize the creation of trusts
or other arrangements to meet the obligations created under the Plan to deliver
Common Stock or make payments; provided,
however, that unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the “unfunded” status of the Plan.


 


SECTION 14.  General Provisions


 


(a) 
Conditions for Issuance.  The Committee may require each person
purchasing or receiving Shares pursuant to an Award to represent to and agree
with the Company in writing that such person is acquiring the Shares without a
view to the distribution thereof. The certificates for such Shares may include
any legend which the Committee deems appropriate to reflect any restrictions on
transfer. Notwithstanding any other provision of the Plan or agreements made
pursuant thereto, the Company shall not be required to issue or deliver any
certificate or certificates for Shares under the Plan prior to fulfillment of
all of the following conditions: (i) listing or approval for listing upon
notice of issuance, of such Shares on the Applicable Exchange; (ii) any
registration or other qualification of such Shares of the Company under any
state or federal law or regulation, or the maintaining in effect of any such
registration or other qualification which the Committee shall, in its absolute
discretion upon the advice of counsel, deem necessary or advisable; and (iii) obtaining
any other consent, approval, or permit from any state or federal governmental
agency which the Committee shall, in its absolute discretion after receiving
the advice of counsel, determine to be necessary or advisable.


 


(b) 
Additional Compensation Arrangements.  Nothing contained in the Plan shall prevent
the Company or any Subsidiary or Affiliate from adopting other or additional
compensation arrangements for its employees.


 


(c) 
No Contract of Employment.  The Plan shall not constitute a contract of
employment, and adoption of the Plan shall not confer upon any employee any
right to continued employment, nor shall it interfere in any way with the right
of the Company or any Subsidiary or Affiliate to terminate the employment of
any employee at any time.


 


(d) 
Required Taxes.  No later than the date as of which an amount
first becomes includible in the gross income of a Participant for federal,
state, local or foreign income or employment or other tax purposes with respect
to any Award under the Plan, such Participant


 


19

















 


shall pay to the Company, or
make arrangements satisfactory to the Company regarding the payment of, any
federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount. If determined by the Company, withholding
obligations may be settled with Common Stock, including Common Stock that is
part of the Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to such Participant. The Committee may establish such procedures
as it deems appropriate, including making irrevocable elections, for the
settlement of withholding obligations with Common Stock.


 


(e) 
Limitation on Dividend Reinvestment and
Dividend Equivalents. 
Reinvestment of dividends in additional Restricted Stock at the time of
any dividend payment, and the payment of Shares with respect to dividends to
Participants holding Awards of Restricted Stock Units, shall only be
permissible if sufficient Shares are available under Section 3 for such
reinvestment or payment (taking into account then outstanding Awards). In the
event that sufficient Shares are not available for such reinvestment or
payment, such reinvestment or payment shall be made in the form of a grant of
Restricted Stock Units equal in number to the Shares that would have been
obtained by such payment or reinvestment, the terms of which Restricted Stock
Units shall provide for settlement in cash and for dividend equivalent
reinvestment in further Restricted Stock Units on the terms contemplated by
this Section 14(e).


 


(f) 
Designation of Death Beneficiary.  The Committee shall establish such procedures
as it deems appropriate for a Participant to designate a beneficiary to whom
any amounts payable in the event of such Participant’s death are to be paid or
by whom any rights of such eligible Individual, after such Participant’s death,
may be exercised.


 


(g) 
Subsidiary Employees.  In the case of a grant of an Award to any
employee of a Subsidiary of the Company, the Company may, if the Committee so
directs, issue or transfer the Shares, if any, covered by the Award to the
Subsidiary, for such lawful consideration as the Committee may specify, upon
the condition or understanding that the Subsidiary will transfer the Shares to
the employee in accordance with the terms of the Award specified by the
Committee pursuant to the provisions of the Plan. All Shares underlying Awards
that are forfeited or canceled should revert to the Company.


 


(h) 
Governing Law and Interpretation.  The Plan and all Awards made and actions
taken thereunder shall be governed by and construed in accordance with the laws
of the State of Delaware, without reference to principles of conflict of laws.
The captions of this Plan are not part of the provisions hereof and shall have
no force or effect.


 


(i) 
Non-Transferability.  Except as otherwise provided in Section 5(j) or
by the Committee, Awards under the Plan are not transferable except by will or
by laws of descent and distribution.


 


(j) 
Foreign Employees and Foreign Law
Considerations.  The Committee
may grant Awards to Eligible Individuals who are foreign nationals, who are
located outside the United States or who are not compensated from a payroll
maintained in the United States, or who are


 


20

















 


otherwise subject to (or
could cause the Company to be subject to) legal or regulatory provisions of
countries or jurisdictions outside the United States, on such terms and
conditions different from those specified in the Plan as may, in the judgment
of the Committee, be necessary or desirable to foster and promote achievement
of the purposes of the Plan, and, in furtherance of such purposes, the
Committee may make such modifications, amendments, procedures, or subplans as
may be necessary or advisable to comply with such legal or regulatory
provisions.


 


(k) 
Section 409A of the Code.  It is the intention of the Company that no
Award shall be “deferred compensation” subject to Section 409A of the
Code, unless and to the extent that the Committee specifically determines
otherwise as provided in the immediately following sentence, and the Plan and
the terms and conditions of all Awards shall be interpreted accordingly. The
terms and conditions governing any Awards that the Committee determines will be
subject to Section 409A of the Code, including any rules for elective
or mandatory deferral of the delivery of cash or Shares pursuant thereto and
any rules regarding treatment of such Awards in the event of a Change in
Control, shall be set forth in the applicable Award Agreement, and shall comply
in all respects with Section 409A of the Code.  Notwithstanding any other provision of the
Plan to the contrary, with respect to any Award that constitutes a “nonqualified
deferred compensation plan” subject to Section 409A of the Code, any
payments (whether in cash, Shares or other property) to be made with respect to
the Award upon the Participant’s Termination of Employment shall be delayed
until the first day of the seventh month following the Participant’s
Termination of Employment if the Participant is a “specified employee” within
the meaning of Section 409A of the Code.


 


(l) 
Employee Matters Agreement.  Notwithstanding anything in this Plan to the
contrary, to the extent that the terms of this Plan are inconsistent with the
terms of an Adjusted Award, the terms of the Adjusted Award shall be governed
by the Employee Matters Agreement, the applicable IAC Long-Term Incentive Plan
and the award agreement entered into thereunder.


 


21