Document:

<PAGE>

                                                                   EXHIBIT 10.35

                 CONVERSION, TERMINATION AND RELEASE AGREEMENT

     This CONVERSION, TERMINATION AND RELEASE AGREEMENT ("Agreement') is made
and entered into as of April 30, 2000, by and between IDT Corporation ("IDT");
Terra Networks, S.A. ("TI"); Terra Networks USA, Inc. ("US-TI"), Terra Networks
Access Services USA LLC ("TI USA ISP"); and Terra Networks Interactive Services
USA LLC ("TI USA Portal").  Each of the foregoing shall be referred to herein as
a "Party" and collectively shall be referred to herein as "Parties."

                                    RECITALS
                                    --------

     WHEREAS, On October 5, 1999, TI entered into three related contracts with
IDT: (a) the Joint Venture Agreement ("JVA") between TI and IDT; (b) the Limited
Liability Company Agreement concerning TI USA Portal between Telefonica
Interactiva USA, Inc., now US-TI, and IDT; and (c) the Limited Liability Company
Agreement concerning TI USA ISP between Telefonica Interactiva USA, Inc., now
US-TI, and IDT;

     WHEREAS, pursuant to the Limited Liability Company Agreements identified in
the foregoing recital, both IDT and US-TI acquired equity ownership interests in
TI USA Portal and TI USA ISP;

     WHEREAS, on October 5, 1999, IDT entered into the following additional
agreements: (a) the Internet Service Provisioning and Marketing Agreement
between IDT and TI USA ISP (the "Internet Service Provisioning and Marketing
Agreement"); and (b) the Internet Colocation Services Agreement between IDT and
TI USA Portal (the "Internet Colocation Services Agreement");

     WHEREAS, on or about the time that TI completed its initial public
offering, IDT purchased 1,156,682 shares of TI shares (the "IPO Shares"); and
the IPO Shares are subject to various restrictions concerning their re-sale;

     WHEREAS, IDT and TI wish to terminate the JVA;

     WHEREAS, IDT and US-TI wish to terminate the Limited Liability Company
Agreement for the TI USA Portal and the Limited Liability Company Agreement for
the TI USA ISP, and to convert IDT's equity interest in the TI USA Portal and TI
USA ISP into shares of TI;

     WHEREAS, as more fully described below, the Parties wish to terminate the
Internet Service Provisioning and Marketing Agreement and the Internet
Colocation Services Agreement; and

     WHEREAS, as more fully described below, the Parties wish to release each
other from any and all claims that each may have against one another.
<PAGE>

                                   AGREEMENT
                                   ---------

     NOW, THEREFORE, in consideration of the covenants and agreements contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:

     1.  Incorporation of Recitals.  The above recitals are true and correct and
         -------------------------
are incorporated herein by reference as if set forth herein at length and shall
survive the execution of this Agreement.

     2.  Termination of Joint Venture Agreement.
         --------------------------------------

         (a)   The JVA is hereby terminated on and as of the date hereof, and
both TI and IDT are hereby relieved from any further obligation or duty to each
other under the JVA.

         (b)   TI and IDT hereby release each other, including their respective
parents, subsidiaries, affiliates, shareholders, directors, officers, employees,
advisors and agents, from any and all claims that either one may have against
the other, whether known or unknown, up to the date hereof with regard to the
JVA or any matter that is related to the JVA.  Both TI and IDT represent and
warrant to the other that neither they, nor any of their affiliates, have
assigned or transferred, nor purported to assign or transfer, any claim or right
that either may have under the JVA.  Notwithstanding the generality of the
foregoing, this Section 2 shall be applicable to this Agreement.

     3.  Termination of Limited Liability Company Agreements.
         ---------------------------------------------------

         (a)   The Limited Liability Company Agreement concerning TI USA Portal
as well as the Limited Liability Company Agreement concerning TI USA ISP are
hereby terminated on and as of the date hereof, and both US-TI and IDT are
hereby relieved from any further obligation or duty to each other under the
same.

         (b)   Any right or interest that IDT had or may have had in TI USA
Portal and in TI USA ISP under the respective Limited Liability Company
Agreements, or otherwise, is hereby converted entirely into ordinary shares of
TI (the "Conversion Shares").  From and after the date hereof, IDT shall no
longer hold or own any right or interest in TI USA ISP or in TI USA Portal.  The
Conversion Shares shall be delivered to IDT, free and clear of all encumbrances
except as otherwise contemplated in this Agreement, as follows:  TI shall either
deliver to IDT 3,750,000 ordinary shares of TI on or before July 31, 2000, or
shall deliver to IDT 4,000,000 ordinary shares of TI at any time between August
1, 2000 and September 30, 2000.  TI shall take all necessary action to issue and
deliver the Conversion Shares as soon as commercially practicable.  In any
event, the Conversion Shares shall have Madrid Stock Exchange ticker symbol
"TRR."  At the time of delivery of the Conversion Shares to IDT, TI shall
furnish a reasonably satisfactory legal opinion from independent counsel to TI
stating that the Conversion Shares have been registered for sale in accordance
with all applicable laws and

                                       2
<PAGE>

are freely transferable by IDT, subject only to the restrictions set forth in
this Section 3(c) of this Agreement.

          (c)  IDT shall be permitted to sell the Conversion Shares freely at
any time, provided that, on or prior to December 31, 2000, IDT shall not sell
the Conversion Shares to any person (natural or otherwise, including, without
limitation, on any stock exchange) who is not a subsidiary of IDT (i) if the
aggregate number of Conversion Shares sold on any business day will exceed
75,000, or (ii) if the aggregate number of Conversion Shares sold during any
calendar month will exceed the result produced by dividing 3,750,000 by the
number of calendar months (treating any partial calendar month as a fraction of
a month) occurring during the period from the date of delivery of the Conversion
Shares through December 31, 2000. After December 31, 2000, the foregoing
restrictions shall terminate, however, from that point forward, IDT shall limit
its sale of Conversion Shares during any given day to a number that shall not
exceed 15% of the total trading volume of TI shares during the immediately
preceding trading day.

          (d)  US-TI and IDT hereby release each other, including their
respective parents, subsidiaries, affiliates, shareholders, directors, officers,
employees, advisors and agents, from any and all claims that either one may have
against the other, whether known or unknown, up to the date hereof with regard
to the Liability Company Agreement concerning TI USA Portal, as well as the
Limited Liability Company Agreement concerning TI USA ISP, or any matter related
to the same.  Both US-TI and IDT represent and warrant to the other that neither
they, nor any of their affiliates, have assigned or transferred, nor purported
to assign or transfer, any claim or right that either may have under either one
of the Limited Liability Company Agreements.

     4.   Release of IPO Shares.  TI hereby releases the IPO Shares from the
          ---------------------
existing lockup agreement and restrictions.  IDT acknowledges that the decision
of whether to release IPO Shares from lockup agreements and restrictions resting
with other parties ("Third Party Lockups") is not controlled by TI; however, TI,
                     -------------------
within a commercially reasonable time not to exceed five (5) business days from
the date hereof and upon IDT's request, agrees to (i) communicate TI's approval
of the release of the Third Party Lockups and (ii) use diligence and expedition
in requesting and providing any appropriate information with respect to the
release of the Third Party Lockups.  In this regard, IDT shall provide such
documentation and assistance during IDT's normal business hours in connection
with TI's efforts to obtain the release of the IPO Shares from any Third Party
Lockups.  Upon the release of the IPO Shares by TI hereunder and from any
applicable Third Party Lockups, any sale by IDT of such IPO Shares shall be
counted against IDT's restrictions on the sale of Conversion Shares pursuant to
Section 3(a), above.  Additionally, IDT shall be not be permitted to sell the
IPO Shares after release from any Third Party Lockups until the date of delivery
of the Conversion Shares (i) if the aggregate number of IPO Shares sold on any
business day will exceed 75,000, or (ii) if the aggregate number of IPO Shares
sold during any calendar month will exceed 500,000.

                                       3
<PAGE>

     5.  Termination of ISP and Marketing Agreement.
         ------------------------------------------

         (a)   The Internet Service Provisioning and Marketing Agreement shall
be terminated on the date hereof and both IDT and TI USA ISP are hereby relieved
from any further obligation or duty to each other under the same except as
provided for herein; provided that with respect to the 25,000 customers retained
by Terra pursuant to Section 5(b), below, IDT shall provide the types and
quality of services required under the Internet Service Provisioning and
Marketing Agreement for a period of 90 days from the date hereof. Terra shall be
responsible to provide all equipment additional to that presently being used and
that is necessary for the services provided herein by IDT, and IDT shall provide
all necessary, including additional, manpower to meet the current and future
service levels required herein. On the 90th day, TI USA ISP shall pay to IDT in
immediately available funds all amounts that would be due under the Internet
Service Provisioning and Marketing Agreement (as if it were still in effect) for
IDT's services during the 90 day period. Anything to the contrary
notwithstanding, IDT's failure to provide the types and quality of services
required under the Internet Service Provisioning and Marketing Agreement shall
constitute a default hereunder, provided that such default will not affect (i)
the conversion of IDT's interest in the TI USA Portal and the TI USA ISP into
Conversion Shares pursuant to Section 3, above, or (ii) the release of the IPO
Shares from the lockup agreements and restrictions pursuant to Section 4, above.
In no event will IDT be liable to TERRA for any special, indirect, incidental,
exemplary, punitive or consequential damages in any manner in connection with or
arising out of this provision, regardless of the form of action or the basis of
the claim or whether or not the party has been advised of the possibility of
such damages; provided, however, that there will be no limitation of liability
as set forth herein in such cases where IDT willfully or intentionally damages
Terra.

         (b)   Within three days following the execution of this Agreement and
receipt of board approval (as contemplated by Section 16 hereof), TI USA ISP
shall deliver to IDT, free and clear of all liens and other encumbrances, the
ownership of all customers of TI USA ISP which are in excess of 25,000.  TI USA
ISP is free to select the 25,000 customers that it shall retain, and the parties
understand that such 25,000 customers shall include the best paying customers of
TI USA ISP and/or those of Hispanic origin.  IDT shall provide TI USA ISP a
listing of, as well as relevant account information regarding the existing ISP
customers (including, without limitation, the amounts billed per customer per
billing period, accounts receivable aging reports, a list of non-performing
accounts and the name, address and method of payment for each customer), from
which TI USA ISP shall select the customers to be retained by it.

         (c)   IDT and TI USA ISP hereby release each other, including their
respective parents, subsidiaries, affiliates, shareholders, directors, officers,
employees, advisors and agents, from any and all claims that either one may have
against the other, whether known or unknown, up to the date hereof with regard
to the Internet Provisioning and Marketing Agreement, or any matters related to
the same.  Both IDT and TI USA ISP represent and warrant to the other that
neither they, nor any of their affiliates, have assigned or transferred, nor
purported to assign or

                                       4
<PAGE>

transfer, any claim or right that either may have under the Internet Service
Provisioning and Marketing Agreement.

     6.  Payment of Amounts Due TI, TI USA ISP and TI USA Portal by IDT.  On or
         --------------------------------------------------------------
prior to the earlier of (a) the first anniversary of the date hereof and (b) the
first date upon which IDT and its subsidiaries cease to own any of the
Conversion Shares, IDT shall pay to TI $3,000,000 in full satisfaction of any
and all amounts due to TI pursuant to the various Agreements described in the
recitals hereto (the "Operative Agreements").  Anything to the contrary
notwithstanding, the Parties acknowledge and agree that IDT's payment of said
amount to TI contemplates a final net settlement of all amounts owed to IDT and
TI (inclusive of any and all set-offs, deductions and other adjustments with
respect to any sums due and owing to IDT by TI as of the date hereof) under the
Operative Agreements.

     7.  Termination of Internet Colocation and Services Agreement.
         ---------------------------------------------------------

         (a)   The Internet Colocation Services Agreement shall be terminated on
the date hereof and both IDT and TI USA Portal are hereby relieved from any
further obligation or duty to each other under the same except as provided for
herein; provided that IDT shall provide the types and quality of services
required under the Internet Colocation and Services Agreement for a period of 90
days from the date hereof.  Terra shall be responsible to provide all equipment
additional to that presently being used and that is necessary for the services
provided herein by IDT, and IDT shall provide all necessary, including
additional, manpower to meet the current and future service levels required
herein.  On the 90th day, TI USA Portal shall pay to IDT in immediately
available funds all amounts that would be due under the Internet Colocation and
Services Agreement (as if it were still in effect) for IDT's services during the
90 day period.  Anything to the contrary notwithstanding, IDT's failure to
provide the types and quality of services required under the Internet Colocation
and Services Agreement shall constitute a default hereunder, provided that such
default will not affect (i) the conversion of IDT's interest in the TI USA
Portal and the TI USA ISP into Conversion Shares pursuant to Section 3, above,
or (ii) the release of the IPO Shares from the lockup agreements and
restrictions pursuant to Section 4, above. In no event will IDT be liable to
TERRA for any special, indirect, incidental, exemplary, punitive or
consequential damages in any manner in connection with or arising out of this
provision, regardless of the form of action or the basis of the claim or whether
or not the party has been advised of the possibility of such damages; provided,
however, that there will be no limitation of liability as set forth herein in
such cases where IDT willfully or intentionally damages Terra.

         (b)   IDT and TI USA Portal hereby release each other, including their
respective parents, subsidiaries, affiliates, shareholders, directors, officers,
employees, advisors and agents, from any and all claims that either one may have
against the other, whether known or unknown, up to the date hereof with regard
to the Internet Colocation and Services Agreement, or any matters related to the
same.  Both IDT and TI USA Portal represent and warrant to the other that
neither they, nor any of their affiliates, have assigned or transferred, nor
purported to

                                       5
<PAGE>

assign or transfer, any claim or right that either may have under the Internet
Colocation and Services Agreement.

     8.  No Solicitation; Non-Compete.  The Parties will continue to be
         ----------------------------
restricted from soliciting for employment any key personnel from each other for
a period of twelve (12) months after the execution of this Agreement.  For a
period of twelve (12) months after the execution of this Agreement, IDT shall
not directly compete with TI USA ISP by providing services primarily targeted to
the Target Markets (as hereinafter defined).  For a period of fifteen (15)
months after the execution of this Agreement, IDT shall not directly compete
with TI USA Portal by providing services primarily targeted to the Target
Markets.  For purposes of this Section 8, the term "Target Markets" shall have
the meaning assigned thereto in the JVA (as in effect immediately prior to the
JVA's termination pursuant to this Agreement).  As used herein, IDT includes IDT
and its affiliates, including subsidiaries and any other entity controlled,
directly or indirectly, by IDT.

     9.  Confidentiality.  The Parties shall hold in confidence, and shall use
         ---------------
only for the purposes of this Agreement, any and all Proprietary Information
disclosed to each other for a period of two (2) years after the execution of
this Agreement (the "Confidentiality Period").  The term "Proprietary
Information" shall mean all information, which one Party, directly or
indirectly, acquires, from any other Party, excluding information falling into
any of the following categories:

         (a)   Information that, at the time of disclosure hereunder, is in the
public domain;

         (b)   Information that, after disclosure hereunder, enters the public
domain other than by breach of this Agreement;

         (c)   Information that, prior to disclosure hereunder, was already in
the recipient's possession, either without limitation on disclosure to others or
subsequently becoming free of such limitation;

         (d)   Information obtained by the recipient from a third party which
the relevant Party reasonably believes has an independent right to disclose this
information; and

         (e)   Information that is available through discovery by independent
research without use of or access to the Proprietary Information acquired from
another Party.

     A Party shall be deemed to have complied with its obligation to maintain
Proprietary Information in confidence if such Party observes (and continues to
observe during the entire duration of the Confidentiality Period) with respect
thereto, the same safeguards and precautions, which such Party observes with
respect to its own proprietary information of the same or similar kind.  It
shall not be deemed to be a breach of the obligation to maintain Proprietary
Information in confidence if Proprietary Information is disclosed upon the order
of a court or other

                                       6
<PAGE>

governmental entity provided, however, that the Party served with such order
shall notify the other Party so as to enable such other Party to apply to a
court of law for a protective order.

     Without limiting the validity or effect of Section 13, below, the parties
agree that a breach of this Section 9 by any of them could cause irreparable
harm to the others for which an action at law may not provide an adequate
remedy.  The parties, therefore, waive any and all defenses for a claim by the
non-breaching parties, or any of them, for injunctive relief from any court of
competent jurisdiction in the event that one of the parties hereto breaches this
Section 9.

     10.  Fees.  Unless otherwise mutually agreed in writing, the Parties shall
          ----
each bear their own fees, costs and expenses incurred by them in connection with
the preparation of this Agreement, including, without limitation, attorneys',
consultants' and accountants' fees.

     11.  Legal Requirement.  Each Party shall comply with all legal
          -----------------
requirements applicable to each Party, and those required by any applicable
jurisdiction, in the performance of its obligations hereunder.

     12.  Share Offer.
          -----------

          (a)  During the period from the date hereof through December 31, 2000
(and subject to the provisions of Section 3(c) with respect to the Conversion
Shares), if IDT desires to sell any of the IPO Shares or the Conversion Shares
(collectively hereinafter referred to as the "TI Shares") other than to a
subsidiary of IDT, or receives an offer to purchase any of its TI Shares, IDT
will first offer such TI Shares to TI for purchase by TI or its designee (the
"Offer") prior to offering or selling such TI Shares to any third party.  IDT
shall make the Offer to TI by telephone or in writing no later than 12:00 p.m.,
Eastern Standard Time (U.S.) on the day of the Offer; provided that the
provisions of this Section 12 shall not apply with respect to any sale of less
than 50,000 TI Shares.

          (b)  Option.  TI shall have the irrevocable and exclusive option, but
               ------
not the obligation (the "Option"), to purchase all, but not less than all, of
the TI Shares at the Closing referred to in Section 12(c), below, and for the
purchase price and on the terms set forth below. TI shall exercise the Option by
notifying IDT by telephone or in writing on the date of the Offer no later than
two (2) hours prior to the market closing as to whether TI accepts or declines
the Offer.  Upon exercise of the Option, TI shall have the obligation to
purchase the TI Shares described in the Offer on and subject to the terms and
conditions hereof.  Failure by TI to exercise the Option by providing the notice
specified in this Section 12 shall be deemed an election by it not to exercise
the Option; and IDT may thereafter transfer its TI Shares at any time or from
time to time free and clear of any restrictions imposed by this Section 12.

          (c)  Closing; Right to Transfer.  If TI elects to purchase any TI
               --------------------------
Shares pursuant to the Option, then such purchases shall, unless the parties
thereto otherwise agree, be completed at a closing (the "Closing") to be held at
the principal office of IDT at 10:00 a.m. local time on the third (3rd) business
day following the exercise of the Option or as otherwise closed by broker's
settlement so long as such settlement takes place within such 3-day period.  TI
may

                                       7
<PAGE>

assign its rights and obligations under this Section 12 to another person upon
written notification to IDT.

          (d)  Purchase Price.  The purchase price for any TI Shares sold
               --------------
pursuant to the Option shall be an amount equal to the average of the high and
low trading prices for the TI Shares on the NASDAQ National Market (or the
national stock exchange on which the TI Shares are then traded) on the date of
the Offer.  The full amount of the purchase price for any TI Shares purchased by
TI pursuant to this Section 12 shall be paid in full in cash by wire transfer of
immediately available funds on the date of Closing.

     13.  Arbitration. All claims, disputes and other matters in question
          -----------
arising out of, or relating to, this Agreement shall be submitted to arbitration
in accordance with the Rules of the American Arbitration Association (the "AAA")
then in effect, unless the parties mutually agree otherwise, and pursuant to the
following procedures:

          (a)  Notice of the demand for arbitration shall be filed in writing
with the other Party to this Agreement and with the AAA.  Three arbitrators
shall be chosen.  Each Party shall select one arbitrator, and the American
Arbitration Association shall select the third arbitrator.  A determination by a
majority of the panel shall be binding on the Parties.

          (b)  Reasonable discovery, as determined in the sole discretion of the
arbitrators, shall be allowed.

          (c)  All arbitration proceedings shall be held in Miami, Florida.

          (d)  The Parties agree that the issues being resolved hereunder shall
be determined by arbitration pursuant to the provisions set forth herein and
pursuant to the applicable rules of the American Arbitration Association then in
effect insofar as such rules are not inconsistent with the provisions set forth
herein.

          (e)  The costs and fees of the arbitration shall be allocated by the
arbitrators.  The Party or Parties prevailing in the arbitration will be
entitled, in addition to such other relief as may be granted, to reasonable
attorneys' fees, if any, as shall be awarded by the arbitrators.

          (f)  The award rendered by the arbitrators shall be final and in
writing, and judgment may be entered in accordance with applicable law and in
any court having jurisdiction thereof.

     14.  Notices.  Except for those notices required pursuant to Section 12,
          -------
above, all notices to be otherwise given herein shall be effective upon receipt
and shall be in writing and delivered personally or by recognized delivery
service or mailed, first class mail, postage prepaid or given by telegram,
telecopy or other similar means (followed with a confirmation by mail) to the
parties, as the case may be, at the following address or such other address as
may hereafter be designated, in writing, by the respective Party in accordance
with this section:

                                       8
<PAGE>

          Name                             Address

          TI, US-TI,:                      Terra Networks, S.A.
          TI USA ISP, and                  Via de las dos Castillas, 33
          TI USA Portal to:                Complejo Atica
                                           Edif. 1-1/a/ planta
                                           28224 Pozuelos de Alarcon
                                           Madrid, Spain
                                           Attention:  Cristina Lamana
                                           Fax:  +34-91-452-3147

          With a copy to:                  Greenberg Traurig, P.A.
                                           1221 Brickell Avenue
                                           Miami, Florida 33131
                                           Attention:  Jose A. Santos, Jr.
                                           Fax:  (305) 579-0717

          IDT:                             IDT Corporation
                                           520 Broad Street
                                           Newark, New Jersey  07102
                                           Attention:  Ira Greenstein
                                           Fax: (201) 928-2885

     15.  Entire Agreement. This Agreement constitutes the entire agreement
          ----------------
between the Parties, and supersedes all negotiations, prior discussions,
agreements, preliminary agreements or understandings between the Parties,
whether written or oral. Only the rights or obligations of the Parties that are
reflected in this Agreement shall survive after its execution. There are no
representations and warranties of the Parties except as specifically stated
herein. This Agreement may not be amended, supplemented or otherwise modified
except by an instrument in writing signed by the Parties.

     16.  Binding Effect and Benefit of Agreement. This Agreement shall be
          ---------------------------------------
binding upon, and shall insure to the benefit of, the Parties hereto and their
respective successors in interest and permitted assigns. This Agreement (other
than Section 4 hereof, which shall be binding without any such board approval)
is subject to the approval of the board of directors of each Party.

     17.  Severability. If any term or provision hereof or the application
          ------------
thereof to any circumstance shall be held invalid or unenforceable, such term or
provision shall be ineffective but shall not affect in any respect whatsoever
the validity of the remainder of this Agreement; and the Parties shall
immediately renegotiate such term or provision to eliminate such invalidity or
unenforceability, maintaining to the greatest extent permissible the spirit of
the Agreement as originally written.

                                       9
<PAGE>

     18.  No Waiver. No consent or waiver, express or implied, by a Party in the
          ---------
performance by the other Party to or of any breach or default by the other Party
of its obligations hereunder shall be deemed or construed to be a consent or
waiver to or of any other breach or default in the performance by such other
Party of the same or any other obligations of such other Party hereunder. The
giving of consent by a Party in any one instance shall not limit or waive the
necessity to obtain such Party's consent in any future instance. No waiver of
any rights under this Agreement shall be binding unless it is in writing signed
by the Party waiving such rights.

     19.  Further Assurances.  The Parties hereby agree to execute and deliver
          ------------------
all such further instruments, documents and/or agreements, as well as to take
any further action, which may be necessary to carry out the transactions
contemplated under this Agreement and the intent of the Parties hereunder.

     20.  Governing Law; Interpretation.  This Agreement shall be governed by
          -----------------------------
and construed in accordance with the laws of the State of New York, without
regard to the conflicts of laws principles thereof.  As used in this Agreement,
the masculine gender shall include the feminine or neuter gender, and the plural
shall include the singular wherever appropriate.  The titles of Sections herein
have been inserted as a matter of convenience of reference only and shall not
control or affect the meaning or construction of any of the terms or provisions
hereof.

        [THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]

                                       10
<PAGE>

     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date and year first above written.

<TABLE>
<CAPTION>
IDT Corporation                                            Terra Networks, S.A.
<S>                                                        <C>
By: /s/ Morris Lichtenstein                                By: /s/ Abel Linares
   -----------------------------------------                  -----------------------------------------
Its: Executive V.P.of Business Development                 Its: CEO
    ----------------------------------------
Terra Networks Access                                      Terra Networks Interactive
Services USA LLC                                           Services USA LLC

By:_________________________________________               By:_________________________________________
As an authorized officer of IDT Corporation,               As an authorized officer of IDT Corporation,
a member of Terra Networks Access Services                 a member of Terra Networks Interactive
USA LLC                                                    Services USA LLC

By: /s/ Alfredo Villalobos                                 By: /s/ Alfredo Villalobos
   -----------------------------------------                  -----------------------------------------
As an authorized officer of Terra Networks                 As an authorized officer of Terra Networks
USA, Inc., a member of Terra Networks                      USA, Inc., a member of Terra Networks
Access Services USA LLC                                    Interactive Services USA LLC

                                                           Terra Networks USA, Inc.

                                                           By: /s/ Alfredo Villalobos
                                                              -----------------------------------------
                                                           Its: President
                                                               ----------------------------------------
</TABLE>

                                       11<PAGE>

                                                                    EXHIBIT 10.1

                     ENTRAVISION COMMUNICATIONS CORPORATION
                       2000 OMNIBUS EQUITY INCENTIVE PLAN

     1.   Introduction.  The Plan was adopted by the Board effective June 12,
          ------------
2000. The purpose of the Plan is to promote the long-term success of the Company
and the creation of stockholder value by (i) encouraging Employees, Outside
Directors and Consultants to focus on critical long-range objectives, (ii)
encouraging the attraction and retention of Employees, Outside Directors and
Consultants with exceptional qualifications and (iii) linking Employees, Outside
Directors and Consultants directly to stockholder interests through increased
stock ownership. The Plan seeks to achieve this purpose by providing for Awards
in the form of Options (which may constitute incentive stock options or
nonstatutory stock options), SARs, Restricted Shares or Stock Units.  The Plan
shall be governed by, and construed in accordance with, the laws of the State of
Delaware (except their choice-of-law provisions).

     2.   Administration.
          --------------

          2.1  Committee Composition.  The Plan shall be administered by the
               ---------------------
Committee.  The Committee shall consist exclusively of two (2) or more directors
of the Company, who shall be appointed by the Board.  In addition, the
composition of the Committee shall satisfy:

               (a) such requirements as the Securities and Exchange Commission
may establish for administrators acting under plans intended to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act; and

               (b) such requirements as the Internal Revenue Service may
establish for outside directors acting under plans intended to qualify for
exemption under Section 162(m)(4)(C) of the Code.

          2.2  Committee Responsibilities.  The Committee shall (i) select the
               --------------------------
Employees, Outside Directors and Consultants who are to receive Awards under the
Plan, (ii) determine the type, number, vesting requirements and other features
and conditions of such Awards, (iii) interpret the Plan and (iv) make all other
decisions relating to the operation of the Plan.  The Committee may adopt such
rules or guidelines as it deems appropriate to implement the Plan.  The
Committee's determinations under the Plan shall be final and binding on all
persons.

          2.3  Committee for Non-Officer Grants.  The Board may also appoint a
               --------------------------------
secondary committee of the Board, which shall be composed of one or more
directors of the Company who need not satisfy the requirements of Section 2.1
above.  Such secondary committee may administer the Plan with respect to
Employees and Consultants who are not considered officers or directors of the
Company under Section 16 of the Exchange Act, may grant Awards under the Plan to
such Employees and Consultants and may determine all features and conditions of
such Awards.  Within the limitations of this Section 2.3, any reference in the
Plan to the Committee shall include such secondary committee.
<PAGE>

     3.   Shares Available for Grants.
          ---------------------------

          3.1  Basic Limitation.  Common Shares issued pursuant to the Plan may
               ----------------
be authorized but unissued shares or treasury shares.  The aggregate number of
Options, SARs, Restricted Shares and Stock Units awarded under the Plan shall
not exceed (i) 19,350,000 plus (ii) the additional Common Shares described in
Section 3.2 below.  The limitation of this Section 3.1 shall be subject to
adjustment pursuant to Section 11 below.

          3.2  Additional Shares.  If Restricted Shares or Common Shares issued
               -----------------
upon the exercise of Options are forfeited, then such Common Shares shall again
become available for Awards under the Plan.  If Options, SARs or Stock Units are
forfeited or terminate for any other reason before being exercised, then the
corresponding Common Shares shall again become available for Awards under the
Plan.  If Stock Units are settled, then only the number of Common Shares (if
any) actually issued in settlement of such Stock Units shall reduce the number
available under Section 3.1 above and the balance shall again become available
for Awards under the Plan.  If SARs are exercised, then only the number of
Common Shares (if any) actually issued in settlement of such SARs shall reduce
the number available under Section 3.1 above and the balance shall again become
available for Awards under the Plan.  The foregoing notwithstanding, the
aggregate number of Common Shares that may be issued under the Plan upon the
exercise of ISOs shall not be increased when Restricted Shares or other Common
Shares are forfeited.

          3.3  Dividend Equivalents.  Any dividend equivalents paid or credited
               --------------------
under the Plan shall not be applied against the number of Options, SARs,
Restricted Shares or Stock Units available for Awards, whether or not such
dividend equivalents are converted into Stock Units.

     4.   Eligibility.
          -----------

          4.1  Incentive Stock Options.  Only Employees who are common-law
               -----------------------
employees of the Company, a Parent or a Subsidiary shall be eligible for the
grant of ISOs.  In addition, an Employee who owns more than ten percent (10%) of
the total combined voting power of all classes of outstanding stock of the
Company or any of its Parents or Subsidiaries shall not be eligible for the
grant of an ISO unless the requirements set forth in Section 422(c)(6) of the
Code are satisfied.

          4.2  Other Grants.  Only Employees, Outside Directors and Consultants
               ------------
shall be eligible for the grant of NSOs, SARs, Restricted Shares or Stock Units.

     5.   Options.
          -------

          5.1  Stock Option Agreement.  Each grant of an Option under the Plan
               ----------------------
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company.  Such Option

                                      -2-
<PAGE>

shall be subject to all applicable terms of the Plan and may be subject to any
other terms that are not inconsistent with the Plan. The Stock Option Agreement
shall specify whether the Option is an ISO or an NSO. The provisions of the
various Stock Option Agreements entered into under the Plan need not be
identical. Options may be granted in consideration of a reduction in the
Optionee's other compensation. A Stock Option Agreement may provide that a new
Option will be granted automatically to the Optionee when he or she exercises a
prior Option and pays the Exercise Price in the form described in Section 6.2
below.
          5.2  Number of Shares.  Each Stock Option Agreement shall specify the
               ----------------
number of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Section 11 below.  Options granted
to any Optionee in a single fiscal year of the Company shall not cover more than
500,000 Common Shares, except that Options granted to a new Employee in the
fiscal year of the Company in which his or her service as an Employee first
commences shall not cover more than 1,000,000 Common Shares.  The limitations
set forth in the preceding sentence shall be subject to adjustment in accordance
with Section 11 below.

          5.3  Exercise Price.  Each Stock Option Agreement shall specify the
               --------------
Exercise Price; provided that the Exercise Price under an ISO shall in no event
be less than one hundred percent (100%) of the Fair Market Value of a Common
Share on the date of grant and the Exercise Price under an NSO shall in no event
be less than eighty-five percent (85%) of the Fair Market Value of a Common
Share on the date of grant.  In the case of an NSO, a Stock Option Agreement may
specify an Exercise Price that varies in accordance with a predetermined formula
while the NSO is outstanding.

          5.4  Exercisability and Term.  Each Stock Option Agreement shall
               -----------------------
specify the date or event when all or any installment of the Option is to become
exercisable.  The Stock Option Agreement shall also specify the term of the
Option; provided that the term of an ISO shall in no event exceed ten (10) years
from the date of grant.  A Stock Option Agreement may provide for accelerated
exercisability in the event of the Optionee's death, disability or retirement or
other events and may provide for expiration prior to the end of its term in the
event of the termination of the Optionee's service.  Options may be awarded in
combination with SARs, and such an Award may provide that the Options will not
be exercisable unless the related SARs are forfeited.

          5.5  Effect of Change in Control.  The Committee may determine, at the
               ---------------------------
time of granting an Option or thereafter, that such Option shall become
exercisable as to all or part of the Common Shares subject to such Option in the
event that a Change in Control occurs with respect to the Company; provided that
in the case of an ISO, the acceleration of exercisability shall not occur
without the Optionee's written consent.

          5.6  Modification or Assumption of Options.  Within the limitations of
               -------------------------------------
the Plan, the Committee may modify, extend or assume outstanding options or may
accept the

                                      -3-
<PAGE>

cancellation of outstanding options (whether granted by the Company or by
another issuer) in return for the grant of new options for the same or a
different number of shares and at the same or a different exercise price. The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, alter or impair his or her rights or obligations under
such Option.

          5.7  Buyout Provisions.  The Committee may at any time (i) offer to
               -----------------
buy out for a payment in cash or cash equivalents an Option previously granted
or (ii) authorize an Optionee to elect to cash out an Option previously granted,
in either case at such time and based upon such terms and conditions as the
Committee shall establish.

     6.   Payment for Option Shares.
          -------------------------

          6.1  General Rule.  The entire Exercise Price of Common Shares issued
               ------------
upon exercise of Options shall be payable in cash or cash equivalents at the
time when such Common Shares are purchased, except as follows:

               (a) In the case of an ISO granted under the Plan, payment shall
be made only pursuant to the express provisions of the applicable Stock Option
Agreement. The Stock Option Agreement may specify that payment may be made in
any form(s) described in this Section 6.

               (b) In the case of an NSO, the Committee may at any time accept
payment in any form(s) described in this Section 6.

          6.2  Surrender of Stock.  To the extent that this Section 6.2 is
               ------------------
applicable, all or any part of the Exercise Price may be paid by surrendering,
or attesting to the ownership of, Common Shares that are already owned by the
Optionee.  Such Common Shares shall be valued at their Fair Market Value on the
date when the new Common Shares are purchased under the Plan.  The Optionee
shall not surrender, or attest to the ownership of, Common Shares in payment of
the Exercise Price if such action would cause the Company to recognize
compensation expense (or additional compensation expense) with respect to the
Option for financial reporting purposes.

          6.3  Exercise/Sale.  To the extent that this Section 6.3 is
               -------------
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid by delivering (on a form prescribed by the Company) an irrevocable
direction to a securities broker approved by the Company to sell all or part of
the Common Shares being purchased under the Plan and to deliver all or part of
the sales proceeds to the Company.

          6.4  Exercise/Pledge.  To the extent that this Section 6.4 is
               ---------------
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid by delivering (on a form prescribed by the Company) an irrevocable
direction to pledge all or part of the Common Shares

                                      -4-
<PAGE>

being purchased under the Plan to a securities broker or lender approved by the
Company, as security for a loan, and to deliver all or part of the loan proceeds
to the Company.

          6.5  Promissory Note.  To the extent that this Section 6.5 is
               ---------------
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid by delivering (on a form prescribed by the Company) a full-recourse
promissory note.  However, the par value of the Common Shares being purchased
under the Plan, if newly issued, shall be paid in cash or cash equivalents.

          6.6  Other Forms of Payment.  To the extent that this Section 6.6 is
               ----------------------
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid in any other form that is consistent with applicable laws, regulations
and rules.

     7.   Option Grants to Outside Directors.
          ----------------------------------

          7.1  Initial Grants.  Each Outside Director who first becomes a member
               --------------
of the Board after the date of the Company's initial public offering shall
receive a one-time grant of an NSO covering such number of Common Shares as
determined by the Board in its discretion (subject to adjustment under Section
11 below).  Such NSO shall be granted on the date when such Outside Director
first joins the Board and shall become exercisable as determined by the Board in
its discretion.

          7.2  Annual Grants.  Upon the conclusion of each regular annual
               -------------
meeting of the Company's stockholders held in the year 2001, or thereafter, each
Outside Director who will continue serving as a member of the Board thereafter
shall receive an NSO covering such number of Common Shares as determined by the
Board in its discretion (subject to adjustment under Section 11 below), except
that such NSO shall not be granted in the calendar year in which the same
Outside Director received the NSO described in Section 7.1 above.  NSOs granted
under this Section 7.2 shall become exercisable in full on the first (1st)
anniversary of the date of grant.

          7.3  Accelerated Exercisability.  All NSOs granted to an Outside
               --------------------------
Director under this Section 7 shall also become exercisable in full in the event
of:

               (a) the termination of such Outside Director's service because of
death, total and permanent disability or retirement at or after age 65; or

               (b) a Change in Control with respect to the Company.

          7.4  Exercise Price.  The Exercise Price under all NSOs granted to an
               --------------
Outside Director under this Section 7 shall be equal to one hundred percent
(100%) of the Fair Market Value of a Common Share on the date of grant, payable
in one of the forms described in Sections 6.1, 6.2, 6.3 and 6.4 above.

                                      -5-
<PAGE>

          7.5  Term.  All NSOs granted to an Outside Director under this Section
               ----
7 shall terminate on the earliest of (i) the tenth (10th) anniversary of the
date of grant, (ii) the date three (3) months after the termination of such
Outside Director's service for any reason other than death or total and
permanent disability or (iii) the date three (3) months after the termination of
such Outside Director's service because of death or total and permanent
disability.

          7.6  Affiliates of Outside Directors.  The Committee may provide that
               -------------------------------
the NSOs that otherwise would be granted to an Outside Director under this
Section 7 shall instead be granted to an affiliate of such Outside Director.
Such affiliate shall then be deemed to be an Outside Director for purposes of
the Plan, provided that the service-related vesting and termination provisions
pertaining to the NSOs shall be applied with regard to the service of the
Outside Director.

     8.   Stock Appreciation Rights.
          -------------------------

          8.1  SAR Agreement.  Each grant of an SAR under the Plan shall be
               -------------
evidenced by an SAR Agreement between the Optionee and the Company.  Such SAR
shall be subject to all applicable terms of the Plan and may be subject to any
other terms that are not inconsistent with the Plan.  The provisions of the
various SAR Agreements entered into under the Plan need not be identical.  SARs
may be granted in consideration of a reduction in the Optionee's other
compensation.

          8.2  Number of Shares.  Each SAR Agreement shall specify the number of
               ----------------
Common Shares to which the SAR pertains and shall provide for the adjustment of
such number in accordance with Section 11 below.  SARs granted to any Optionee
in a single calendar year shall in no event pertain to more than 500,000 Common
Shares, except that SARs granted to a new Employee in the fiscal year of the
Company in which his or her service as an Employee first commences shall not
pertain to more than 1,000,000 Common Shares.  The limitations set forth in the
preceding sentence shall be subject to adjustment in accordance with Section 11
below.

          8.3  Exercise Price.  Each SAR Agreement shall specify the Exercise
               --------------
Price. An SAR Agreement may specify an Exercise Price that varies in accordance
with a predetermined formula while the SAR is outstanding.

          8.4  Exercisability and Term.  Each SAR Agreement shall specify the
               -----------------------
date when all or any installment of the SAR is to become exercisable.  The SAR
Agreement shall also specify the term of the SAR.  An SAR Agreement may provide
for accelerated exercisability in the event of the Optionee's death, disability
or retirement or other events and may provide for expiration prior to the end of
its term in the event of the termination of the Optionee's service. SARs may be
awarded in combination with Options, and such an Award may provide that the SARs
will not be exercisable unless the related Options are forfeited.  An SAR may be
included in an ISO only at the time of grant but may be included in an NSO at
the time of grant or thereafter.  An SAR granted under the Plan may provide that
it will be exercisable only in the

                                      -6-
<PAGE>

event of a Change in Control.

          8.5  Effect of Change in Control.  The Committee may determine, at the
               ---------------------------
time of granting an SAR or thereafter, that such SAR shall become fully
exercisable as to all Common Shares subject to such SAR in the event that a
Change in Control occurs with respect to the Company.

          8.6  Exercise of SARs.  Upon exercise of an SAR, the Optionee (or any
               ----------------
person having the right to exercise the SAR after his or her death) shall
receive from the Company (i) Common Shares, (ii) cash or (iii) a combination of
Common Shares and cash, as the Committee shall determine.  The amount of cash
and/or the Fair Market Value of Common Shares received upon exercise of SARs
shall, in the aggregate, be equal to the amount by which the Fair Market Value
(on the date of surrender) of the Common Shares subject to the SARs exceeds the
Exercise Price.  If, on the date when an SAR expires, the Exercise Price under
such SAR is less than the Fair Market Value on such date but any portion of such
SAR has not been exercised or surrendered, then such SAR shall automatically be
deemed to be exercised as of such date with respect to such portion.

          8.7  Modification or Assumption of SARs.  Within the limitations of
               ----------------------------------
the Plan, the Committee may modify, extend or assume outstanding SARs or may
accept the cancellation of outstanding SARs (whether granted by the Company or
by another issuer) in return for the grant of new SARs for the same or a
different number of shares and at the same or a different exercise price.  The
foregoing notwithstanding, no modification of an SAR shall, without the consent
of the Optionee, alter or impair his or her rights or obligations under such
SAR.

     9.   Restricted Shares.
          -----------------

          9.1  Restricted Stock Agreement.  Each grant of Restricted Shares
               --------------------------
under the Plan shall be evidenced by a Restricted Stock Agreement between the
recipient and the Company.  Such Restricted Shares shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan.  The provisions of the various Restricted Stock
Agreements entered into under the Plan need not be identical.

          9.2  Payment for Awards.  Subject to the following sentence,
               ------------------
Restricted Shares may be sold or awarded under the Plan for such consideration
as the Committee may determine, including, without limitation, cash, cash
equivalents, full-recourse promissory notes, past services and future services.
To the extent that an Award consists of newly issued Restricted Shares, the
Award recipient shall furnish consideration with a value not less than the par
value of such Restricted Shares in the form of cash, cash equivalents or past
services rendered to the Company (or a Parent or Subsidiary), as the Committee
may determine.

          9.3  Vesting Conditions.  Each Award of Restricted Shares may or may
               ------------------
not be subject to vesting.  Vesting shall occur, in full or in installments,
upon satisfaction of the

                                      -7-
<PAGE>

conditions specified in the Restricted Stock Agreement. A Restricted Stock
Agreement may provide for accelerated vesting in the event of the Participant's
death, disability or retirement or other events. The Committee may determine, at
the time of granting Restricted Shares or thereafter, that all or part of such
Restricted Shares shall become vested in the event that a Change in Control
occurs with respect to the Company.

          9.4  Voting and Dividend Rights.  The holders of Restricted Shares
               --------------------------
awarded under the Plan shall have the same voting, dividend and other rights as
the Company's other stockholders.  A Restricted Stock Agreement, however, may
require that the holders of Restricted Shares invest any cash dividends received
in additional Restricted Shares.  Such additional Restricted Shares shall be
subject to the same conditions and restrictions as the Award with respect to
which the dividends were paid.

     10.  Stock Units.
          -----------

          10.1  Stock Unit Agreement.  Each grant of Stock Units under the Plan
                --------------------
shall be evidenced by a Stock Unit Agreement between the recipient and the
Company.  Such Stock Units shall be subject to all applicable terms of the Plan
and may be subject to any other terms that are not inconsistent with the Plan.
The provisions of the various Stock Unit Agreements entered into under the Plan
need not be identical.  Stock Units may be granted in consideration of a
reduction in the recipient's other compensation.

          10.2  Payment for Awards.  To the extent that an Award is granted in
                ------------------
the form of Stock Units, no cash consideration shall be required of the Award
recipients.

          10.3  Vesting Conditions.  Each Award of Stock Units may or may not be
                ------------------
subject to vesting.  Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Stock Unit Agreement.  A Stock
Unit Agreement may provide for accelerated vesting in the event of the
Participant's death, disability or retirement or other events. The Committee may
determine, at the time of granting Stock Units or thereafter, that all or part
of such Stock Units shall become vested in the event that a Change in Control
occurs with respect to the Company.

          10.4  Voting and Dividend Rights.  The holders of Stock Units shall
                --------------------------
have no voting rights.  Prior to settlement or forfeiture, any Stock Unit
awarded under the Plan may, at the Committee's discretion, carry with it a right
to dividend equivalents.  Such right entitles the holder to be credited with an
amount equal to all cash dividends paid on one Common Share while the Stock Unit
is outstanding.  Dividend equivalents may be converted into additional Stock
Units.  Settlement of dividend equivalents may be made in the form of cash, in
the form of Common Shares, or in a combination of both.  Prior to distribution,
any dividend equivalents which are not paid shall be subject to the same
conditions and restrictions as the Stock Units to which they attach.

                                      -8-
<PAGE>

          10.5  Form and Time of Settlement of Stock Units.  Settlement of
                ------------------------------------------
vested Stock Units may be made in the form of (i) cash, (ii) Common Shares or
(iii) any combination of both, as determined by the Committee. The actual number
of Stock Units eligible for settlement may be larger or smaller than the number
included in the original Award, based on predetermined performance factors.
Methods of converting Stock Units into cash may include, without limitation, a
method based on the average Fair Market Value of Common Shares over a series of
trading days. Vested Stock Units may be settled in a lump sum or in
installments. The distribution may occur or commence when all vesting conditions
applicable to the Stock Units have been satisfied or have lapsed, or it may be
deferred to any later date. The amount of a deferred distribution may be
increased by an interest factor or by dividend equivalents. Until an Award of
Stock Units is settled, the number of such Stock Units shall be subject to
adjustment pursuant to Section 11 below.

          10.6  Death of Recipient.  Any Stock Units Award that becomes payable
                ------------------
after the recipient's death shall be distributed to the recipient's beneficiary
or beneficiaries.  Each recipient of a Stock Units Award under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company.  A beneficiary designation may be changed by filing the
prescribed form with the Company at any time before the Award recipient's death.
If no beneficiary was designated or if no designated beneficiary survives the
Award recipient, then any Stock Units Award that becomes payable after the
recipient's death shall be distributed to the recipient's estate.

          10.7  Creditors' Rights.  A holder of Stock Units shall have no rights
                -----------------
other than those of a general creditor of the Company.  Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Unit Agreement.

     11.  Protection Against Dilution.
          ---------------------------

          11.1  Adjustments.  In the event of a subdivision of the outstanding
                -----------
Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an
amount that has a material effect on the price of Common Shares, a combination
or consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, a recapitalization, a spin-off
or a similar occurrence, the Committee shall make such adjustments as it, in its
sole discretion, deems appropriate in one or more of:

               (a) the number of Options, SARs, Restricted Shares and Stock
Units available for future Awards under Section 3 above;

               (b) the limitations set forth in Sections 5.2 and 8.2 above;

               (c) the number of NSOs to be granted to Outside Directors under

                                      -9-
<PAGE>

Section 7 above;

               (d) the number of Common Shares covered by each outstanding
Option and SAR;

               (e) the Exercise Price under each outstanding Option and SAR; or

               (f) the number of Stock Units included in any prior Award which
has not yet been settled.

Except as provided in this Section 11, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.

          11.2  Dissolution or Liquidation.  To the extent not previously
                --------------------------
exercised or settled, Options, SARs and Stock Units shall terminate immediately
prior to the dissolution or liquidation of the Company.

          11.3  Reorganizations.  In the event that the Company is a party to a
                ---------------
merger or other reorganization, outstanding Awards shall be subject to the
agreement of merger or reorganization.  Such agreement shall provide for:

               (a) the continuation of the outstanding Awards by the Company, if
the Company is a surviving corporation;

               (b) the assumption of the outstanding Awards by the surviving
corporation or its parent or subsidiary;

          (c) the substitution by the surviving corporation or its parent or
subsidiary of its own awards for the outstanding Awards;

               (d) full exercisability or vesting and accelerated expiration of
the outstanding Awards; or

               (e) settlement of the full value of the outstanding Awards in
cash or cash equivalents followed by cancellation of such Awards.

     12.  Deferral of Awards.  The Committee (in its sole discretion) may permit
          ------------------
or require a Participant to:

          12.1  have cash that otherwise would be paid to such Participant as a
result of the exercise of an SAR or the settlement of Stock Units credited to a
deferred compensation

                                      -10-
<PAGE>

account established for such Participant by the Committee as an entry on the
Company's books;

          12.2  have Common Shares that otherwise would be delivered to such
Participant as a result of the exercise of an Option or SAR converted into an
equal number of Stock Units; or

          12.3  have Common Shares that otherwise would be delivered to such
Participant as a result of the exercise of an Option or SAR or the settlement of
Stock Units converted into amounts credited to a deferred compensation account
established for such Participant by the Committee as an entry on the Company's
books.  Such amounts shall be determined by reference to the Fair Market Value
of such Common Shares as of the date when they otherwise would have been
delivered to such Participant.

A deferred compensation account established under this Section 12 may be
credited with interest or other forms of investment return, as determined by the
Committee.  A Participant for whom such an account is established shall have no
rights other than those of a general creditor of the Company.  Such an account
shall represent an unfunded and unsecured obligation of the Company and shall be
subject to the terms and conditions of the applicable agreement between such
Participant and the Company.  If the deferral or conversion of Awards is
permitted or required, the Committee (in its sole discretion) may establish
rules, procedures and forms pertaining to such Awards, including, without
limitation, the settlement of deferred compensation accounts established under
this Section 12.

     13.  Awards Under Other Plans.  The Company may grant awards under other
          ------------------------
plans or programs.  Such awards may be settled in the form of Common Shares
issued under this Plan. Such Common Shares shall be treated for all purposes
under the Plan like Common Shares issued in settlement of Stock Units and shall,
when issued, reduce the number of Common Shares available under Section 3 above.

     14.  Payment of Director's Fees in Securities.
          ----------------------------------------

          14.1  Effective Date.  No provision of this Section 14 shall be
                --------------
effective unless and until the Board has determined to implement such provision.

          14.2  Elections to Receive NSOs, Restricted Shares or Stock Units.  An
                -----------------------------------------------------------
Outside Director may elect to receive his or her annual retainer payments and/or
meeting fees from the Company in the form of cash, NSOs, Restricted Shares or
Stock Units, or a combination thereof, as determined by the Board.  Such NSOs,
Restricted Shares and Stock Units shall be issued under the Plan.  An election
under this Section 14 shall be filed with the Company on the prescribed form.

          14.3  Number and Terms of NSOs, Restricted Shares or Stock Units.  The
                ----------------------------------------------------------
number of NSOs, Restricted Shares or Stock Units to be granted to Outside
Directors in lieu of

                                      -11-
<PAGE>

annual retainers and meeting fees that would otherwise be paid in cash shall be
calculated in a manner determined by the Board. The terms of such NSOs,
Restricted Shares or Stock Units shall also be determined by the Board.

     15.  Limitations on Rights.
          ---------------------

          15.1  Retention Rights.  Neither the Plan nor any Award granted under
                ----------------
the Plan shall be deemed to give any individual a right to remain an Employee,
Outside Director or Consultant.  The Company and its Parents, Subsidiaries and
Affiliates reserve the right to terminate the service of any Employee, Outside
Director or Consultant at any time, with or without cause, subject to applicable
laws, the Company's certificate of incorporation and bylaws, each as amended,
and a written employment agreement (if any).

          15.2  Stockholders' Rights.  A Participant shall have no dividend
                --------------------
rights, voting rights or other rights as a stockholder with respect to any
Common Shares covered by his or her Award prior to the time when a stock
certificate for such Common Shares is issued or, if applicable, the time when he
or she becomes entitled to receive such Common Shares by filing any required
notice of exercise and paying any required Exercise Price.  No adjustment shall
be made for cash dividends or other rights for which the record date is prior to
such time, except as expressly provided in the Plan.

          15.3  Regulatory Requirements.  Any other provision of the Plan
                -----------------------
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required.  The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to the
issuance of such Common Shares, to their registration, qualification or listing
or to an exemption from registration, qualification or listing.

     16.  Withholding Taxes.
          -----------------

          16.1  General.  To the extent required by applicable federal, state,
                -------
local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any withholding
tax obligations that arise in connection with the Plan.  The Company shall not
be required to issue any Common Shares or make any cash payment under the Plan
until such obligations are satisfied.

          16.2  Share Withholding.  The Committee may permit a Participant to
                -----------------
satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any Common Shares that otherwise
would be issued to him or her or by surrendering all or a portion of any Common
Shares that he or she previously acquired.  Such Common Shares shall be valued
at their Fair Market Value on the date when taxes otherwise would be withheld in
cash.

                                      -12-
<PAGE>

     17.  Future of the Plan.
          ------------------

          17.1  Term of the Plan.  The Plan, as set forth herein, shall become
                ----------------
effective on June 12, 2000.  The Plan shall remain in effect until it is
terminated under Section 17.2 below, except that no ISOs shall be granted on or
after the tenth (10th) anniversary of the later of (i) the date when the Board
adopted the Plan or (ii) the date when the Board adopted the most recent
increase in the number of Common Shares available under Section 3 above which
was approved by the Company's stockholders.

          17.2  Amendment or Termination.  The Board may, at any time and for
                ------------------------
any reason, amend or terminate the Plan. An amendment of the Plan shall be
subject to the approval of the Company's stockholders only to the extent
required by applicable laws, regulations or rules. No Awards shall be granted
under the Plan after the termination thereof. The termination of the Plan, or
any amendment thereof, shall not affect any Award previously granted under the
Plan.

     18.  Limitation on Parachute Payments.
          --------------------------------

          18.1  Scope of Limitation.  This Section 18 shall apply to an Award
                -------------------
only if:

                (a) the independent auditors most recently selected by the Board
(the "Auditors") determine that the after-tax value of such Award to the
Participant, taking into account the effect of all federal, state and local
income taxes, employment taxes and excise taxes applicable to the Participant
(including the excise tax under Section 4999 of the Code), will be greater after
the application of this Section 18 than it was before the application of this
Section 18; or

                (b) the Committee, at the time of making an Award under the Plan
or at any time thereafter, specifies in writing that such Award shall be subject
to this Section 18 (regardless of the after-tax value of such Award to the
Participant).

If this Section 18 applies to an Award, it shall supersede any contrary
provision of the Plan or of any Award granted under the Plan.

          18.2  Basic Rule.  Except as may be set forth in a written agreement
                ----------
by and between the Company and the holder of an Award, in the event that the
Auditors determine that any payment or transfer by the Company under the Plan to
or for the benefit of a Participant (a "Payment") would be nondeductible by the
Company for federal income tax purposes because of the provisions concerning
"excess parachute payments" in Section 280G of the Code, then the aggregate
present value of all Payments shall be reduced (but not below zero) to the
Reduced Amount. For purposes of this Section 18, the "Reduced Amount" shall be
the amount, expressed as a present value, which maximizes the aggregate present
value of the Payments without causing any Payment to be nondeductible by the
Company because of Section 280G of the Code.

                                      -13-
<PAGE>

          18.3  Reduction of Payments.  If the Auditors determine that any
                ---------------------
Payment would be nondeductible by the Company because of Section 280G of the
Code, then the Company shall promptly give the Participant notice to that effect
and a copy of the detailed calculation thereof and of the Reduced Amount, and
the Participant may then elect, in his or her sole discretion, which and how
much of the Payments shall be eliminated or reduced (as long as after such
election the aggregate present value of the Payments equals the Reduced Amount)
and shall advise the Company in writing of his or her election within ten (10)
days of receipt of notice.  If no such election is made by the Participant
within such ten (10) day period, then the Company may elect which and how much
of the Payments shall be eliminated or reduced (as long as after such election
the aggregate present value of the Payments equals the Reduced Amount) and shall
notify the Participant promptly of such election.  For purposes of this Section
18, present value shall be determined in accordance with Section 280G(d)(4) of
the Code.  All determinations made by the Auditors under this Section 18 shall
be binding upon the Company and the Participant and shall be made within sixty
(60) days of the date when a Payment becomes payable or transferable.  As
promptly as practicable following such determination and the elections
hereunder, the Company shall pay or transfer to or for the benefit of the
Participant such amounts as are then due to him or her under the Plan and shall
promptly pay or transfer to or for the benefit of the Participant in the future
such amounts as become due to him or her under the Plan.

          18.4  Overpayments and Underpayments.  As a result of uncertainty in
                ------------------------------
the application of Section 280G of the Code at the time of an initial
determination by the Auditors hereunder, it is possible that Payments will have
been made by the Company that should not have been made (an "Overpayment") or
that additional Payments that will not have been made by the Company could have
been made (an "Underpayment"), consistent in each case with the calculation of
the Reduced Amount hereunder.  In the event that the Auditors, based upon the
assertion of a deficiency by the Internal Revenue Service against the Company or
the Participant that the Auditors believe has a high probability of success,
determine that an Overpayment has been made, such Overpayment shall be treated
for all purposes as a loan to the Participant which he or she shall repay to the
Company, together with interest at the applicable federal rate provided in
Section 7872(f)(2) of the Code; provided, however, that no amount shall be
payable by the Participant to the Company if and to the extent that such payment
would not reduce the amount subject to taxation under Section 4999 of the Code.
In the event that the Auditors determine that an Underpayment has occurred, such
Underpayment shall promptly be paid or transferred by the Company to or for the
benefit of the Participant, together with interest at the applicable federal
rate provided in Section 7872(f)(2) of the Code.

          18.5  Related Corporations.  For purposes of this Section 18, the term
                --------------------
"Company" shall include affiliated corporations to the extent determined by the
Auditors in accordance with Section 280G(d)(5) of the Code.

     19.  Definitions.
          -----------

                                      -14-
<PAGE>

          19.1  "Affiliate" means any entity other than a Subsidiary, if the
Company and/or one or more Subsidiaries own not less than fifty percent (50%) of
such entity.

          19.2  "Award" means any award of an Option, an SAR, a Restricted Share
or a Stock Unit under the Plan.

          19.3  "Board" means the Company's Board of Directors, as constituted
from time to time.

          19.4  "Change in Control" shall mean:

                (a) the consummation of a merger or consolidation of the Company
with or into another entity or any other corporate reorganization, if more than
fifty percent (50%) of the combined voting power of the continuing or surviving
entity's securities outstanding immediately after such merger, consolidation or
other reorganization is owned by persons who were not stockholders of the
Company immediately prior to such merger, consolidation or other reorganization;

                (b) the sale, transfer or other disposition of all or
substantially all of the Company's assets;

                (c) a change in the composition of the Board, as a result of
which fewer than fifty percent (50%) of the incumbent directors are directors
who either (i) had been directors of the Company on the date twenty-four (24)
months prior to the date of the event that may constitute a Change in Control
(the "original directors") or (ii) were elected, or nominated for election, to
the Board with the affirmative votes of at least a majority of the aggregate of
the original directors who were still in office at the time of the election or
nomination and the directors whose election or nomination was previously so
approved; or

                (d) any transaction as a result of which any person is the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing at least fifty percent
(50%) of the total voting power represented by the Company's then outstanding
voting securities. For purposes of this Section 19.4(d), the term "person" shall
have the same meaning as when used in Sections 13(d) and 14(d) of the Exchange
Act but shall exclude (i) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or of a Parent or Subsidiary and (ii) a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the common stock of the
Company.

A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.

                                      -15-
<PAGE>

          19.5   "Code" means the Internal Revenue Code of 1986, as amended.

          19.6   "Committee" means a committee of the Board, as described in
Section 2 above.

          19.7   "Common Share" means one (1) share of the Class A common stock
of the Company.

          19.8   "Company" means Entravision Communications Corporation, a
Delaware corporation.

          19.9   "Consultant" means a consultant or adviser who provides bona
fide services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor. Service as a Consultant shall be considered employment
for all purposes of the Plan, except as provided in Section 4.1 above.

          19.10  "Employee" means a common-law employee or officer (whether or
not a director) of the Company, a Parent, a Subsidiary or an Affiliate.

          19.11  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

          19.12  "Exercise Price," in the case of an Option, means the amount
for which one (1) Common Share may be purchased upon exercise of such Option, as
specified in the applicable Stock Option Agreement.  "Exercise Price," in the
case of an SAR, means an amount, as specified in the applicable SAR Agreement,
which is subtracted from the Fair Market Value of one (1) Common Share in
determining the amount payable upon exercise of such SAR.

          19.13  "Fair Market Value" means the market price of Common Shares,
determined by the Committee in good faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in the Wall Street Journal.  Such determination
shall be conclusive and binding on all persons.

          19.14  "ISO" means an incentive stock option described in Section
422(b) of the Code.

          19.15  "NSO" means a stock option not described in Sections 422 or 423
of the Code.

          19.16  "Option" means an ISO or NSO granted under the Plan and
entitling the holder to purchase Common Shares.

          19.17  "Optionee" means an individual or estate who holds an Option or
SAR.

                                      -16-
<PAGE>

          19.18  "Outside Director" shall mean a member of the Board who is not
an Employee. Service as an Outside Director shall be considered employment for
all purposes of the Plan, except as provided in Section 4.1 above.

          19.19  "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.  A corporation that attains the status of a
Parent on a date after the adoption of the Plan shall be considered a Parent
commencing as of such date.

          19.20  "Participant" means an individual or estate who holds an Award.

          19.21  "Plan" means this Entravision Communications Corporation 2000
Omnibus Equity Incentive Plan, as amended from time to time.

          19.22  "Restricted Share" means a Common Share awarded under the Plan.

          19.23  "Restricted Stock Agreement" means the agreement between the
Company and the recipient of a Restricted Share which contains the terms,
conditions and restrictions pertaining to such Restricted Share.

          19.24  "SAR" means a stock appreciation right granted under the Plan.

          19.25  "SAR Agreement" means the agreement between the Company and an
Optionee which contains the terms, conditions and restrictions pertaining to his
or her SAR.

          19.26  "Stock Option Agreement" means the agreement between the
Company and an Optionee that contains the terms, conditions and restrictions
pertaining to his or her Option.

          19.27  "Stock Unit" means a bookkeeping entry representing the
equivalent of one (1) Common Share, as awarded under the Plan.

          19.28  "Stock Unit Agreement" means the agreement between the Company
and the recipient of a Stock Unit which contains the terms, conditions and
restrictions pertaining to such Stock Unit.

          19.29  "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain. A corporation
that attains the status of a Subsidiary on a date after the adoption of

                                      -17-
<PAGE>

the Plan shall be considered a Subsidiary commencing as of such date.

     20.  Execution.  To record the adoption of the Plan by the Board, the
          ---------
Company has caused its duly authorized officer to execute this document in the
name of the Company.

                                      -18-

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