UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

Filed by the Registrant  x

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

HSN, Inc.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

April 6, 201210, 2014

Dear Fellow Shareholder:

You are invitedOn behalf of the Board of Directors, it is my pleasure to invite you to attend the 2012 annual meeting2014 Annual Meeting of shareholdersShareholders of HSN, Inc., which will be held on Friday, May 18, 2012,23, 2014, at 10:00 a.m., local time,Eastern Daylight Time, at the HSN, Inc. corporate headquarters located at 1 HSN Drive, St. Petersburg, Florida 33729. At the meeting, youwe will be askedelecting our directors; approving on an advisory basis the compensation paid to vote on (i)our named executive officers; approving the election of our directors,Performance Goals contained in the Second Amended and (ii) ratification ofRestated 2008 Stock and Incentive Plan; ratifying the appointment of our auditors.auditors and transacting any other business that properly comes before the meeting.

Based onWe hope that you will attend the Securities and Exchange Commission rules that allow companiesmeeting. Whether or not you plan to furnish proxy materialsattend the meeting, please take the time to shareholders overvote your shares. Your vote is very important, regardless of the internet, we have elected to deliver our proxy materials to the majoritynumber of our shareholders over the internet. This delivery process will allow us to provide shareholders with the information they need, while at the same time conserving natural resources and lowering the costshares you own. The attached notice of delivery. On or about April 6, 2012, we mailed to our shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy statement and annual report online. The notice alsoAnnual Meeting provides instructions on how to vote online, by mail or by telephone and includes instructions on how to receive a paper copy of the proxy materials by mail.telephone. We encourage you to take advantage of voting on the internet because it is a convenient and less expensive way for us to tabulate your vote.

Your vote is very important, regardless of the number of shares you own. Whether or not you plan to attend the meeting, please take the time to complete, sign, date and return the proxy card or vote over the telephone or on the internet.

Thank you for your continued support of HSN, Inc.

Sincerely,

Mindy Grossman

Chief Executive Officer

HSN, INC.

1 HSN Drive

St. Petersburg, Florida 33729

NOTICE OF 20122014 ANNUAL MEETING OF SHAREHOLDERS

Notice is hereby given that the annual meetingAnnual Meeting of shareholdersShareholders of HSN, Inc., a Delaware corporation, will be held on Friday, May 18, 201223, 2014 at 10:00 a.m., local time,Eastern Daylight Time, at the company’sCompany’s corporate headquarters located at 1 HSN Drive, St. Petersburg, Florida 33729. At the annual meeting,Annual Meeting, shareholders will be asked to:

Our Board of Directors has set March 22, 201225, 2014 as the record date for the annual meeting.Annual Meeting. This means that only holders of record of our common stock at the close of business on that date are entitled to receive notice of the meeting and to vote their shares at the meeting or any related adjournments or postponements.

Important Notice Regarding the Availability of Proxy Materials for the 20122014 Annual Meeting of Shareholders.On or about April 6, 2012,10, 2014, we are mailing to many of our shareholders a notice of availability of the proxy materials over the internet, rather than mailing a full paper set of the materials. The notice of availability contains instructions on how to access our proxy materials on the internet, as well as instructions on obtaining a paper copy of the materials. This process is more environmentally friendly and reduces our costs to print and distribute these materials. Shareholders who do not receive such a notice of availability and shareholders who have previously requested to receive a paper copy of the materials, will receive a full set of paper proxy materials by U.S. mail.

April 6, 201210, 2014

St. Petersburg, Florida

PROXY STATEMENT

TABLE OF CONTENTS

i

PROXY STATEMENT

TABLE OF CONTENTS

(continued)

ii

PROXY STATEMENT

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

The proxy materials are also available on HSNi’s investor relations website atwww.hsni.com.

Proposal 1—to elect nineten directors, each to hold office for a one-year term ending on the date of the next succeeding annual meeting of shareholdersAnnual Meeting or until such director’s successor shall have been duly elected and qualified; and

Proposal 2—to approve, on an advisory basis, the compensation paid to our named executive officers;

Proposal 3—to approve the Performance Goals contained in the Second Amended and Restated 2008 Stock and Annual Incentive Plan, (the “Plan”); and

Proposal 4—to ratify the appointment of Ernst & Young LLP as our independent registered certified public accounting firm for the year ending December 31, 2012.2014.

We will also consider other business as may properly come before the meeting and any related adjournments or postponements.

For a more detailed discussion of each of these proposals, please see the information included elsewhere in the proxy statement relating to these proposals.statement.

“FOR” each of the nineten nominees to the Board of Directors (Proposal 1);

“FOR” the approval, on an advisory basis, of the compensation paid to our named executive officers (Proposal 2);

“FOR” the approval of the Performance Goals contained in the Second Amended and Restated 2008 Stock and Annual Incentive Plan (Proposal 3); and

“FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered certified public accounting firm (Proposal 2)4).

If your shares are held in the name of your broker, bank or other nominee, these shares are held in street name. As the beneficial owner of these shares, you have the right to direct your broker, bank or other nominee on how to vote the shares in your account. Since you are not the shareholder of record, you must request and receive a valid proxy from your broker, bank or other holder of record in order to vote these shares in person at the annual meeting.shares.

If you are a beneficial owner whose shares are heldUnder the rules of record by a broker,The NASDAQ Stock Market LLC (“NASDAQ”), your broker has discretionary voting authority under NASDAQ rules to vote your shares on the ratification of Ernst & Young LLP, even if the broker does not receive voting instructions from you.LLP. However, your broker does not have

discretionary authority to vote on the election of directors, the compensation of our named executive officers or the approval of the Performance Goals contained in the Plan, in which case a broker non-vote will occur and your shares will not be voted on this matter.

The proposalproposals to approve on an advisory basis, the compensation of our named executive officers, the Performance Goals contained in the Plan and to ratify the appointment of Ernst & Young LLP as our independent registered certified public accounting firm requiresrequire the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote.

Street name holders may submit a proxy by telephone or the internet if their bank or broker makes these methods available, in which case the bank or broker will enclose related instructions with this proxy statement. If you submit a proxy by telephone or via the internet you should not return your proxy card. Instructions on how to submit a proxy by telephone or via the internet are located on the proxy card enclosed with this proxy statement. If you hold your shares through a bank or broker, follow the voting instructions you receive from your bank or broker. Even if you intend to attend the Annual Meeting, we encourage you to vote by proxy.

You should send any written notice or a new proxy card to HSN, Inc. c/o Computershare Investor Services, at the following address: P.O. Box 3550, South Hackensack, NJ 07606-9250,43006, Providence, RI 02940-3006, or follow the instructions provided on your proxy card to submit a proxy by telephone or via the internet. You may request a new proxy card by calling Computershare, Proxy ProcessingShareholder Service at 1-888-313-01641-800-522-6645 (toll-free).

In addition to solicitation by mail, our directors, officers and employees may solicit proxies from shareholders by telephone, letter, facsimile or in person;person, but will not receive any additional compensation for these services. Following the original mailing of the proxy solicitation materials, we will request brokers, custodians, nominees and other record holders to forward copies of the proxy statement and related soliciting materials to persons for whom they hold shares of our common stock and to request authority for the exercise of proxies. In such cases, upon the request of the record holders, we will reimburse such holders for their reasonable expenses.

Eligible shareholders who intend to present a proposal at the 2013 annual meeting2015 Annual Meeting of shareholders without inclusion of the proposal in the proxy materials must provide notice no earlier than January 19, 201325, 2015 and no later than 5:00 p.m., Eastern Time, February 18, 201324, 2015 and must comply with the provisions of our By-Laws. We advise you to review our By-Laws, which contain these and other requirements with respect to advance notice of shareholder proposals and director nominations, including certain information that must be included concerning the shareholder making the proposal, each nominee and the proposal itself. Our By-Laws were filed as an exhibit to our Form 8-K filed with the U.S. Securities and Exchange Commission, or SEC, on August 25, 2008.February 14, 2014. Our public filings can be viewed by visiting our investor relations website athttp://www.hsni.com/. You may also obtain a copy, free of charge, by writing to our Corporate Secretary at our principal executive office at 1 HSN Drive, St. Petersburg, Florida 33729, Attention: Legal Department.

PROPOSAL 1—ELECTION OF DIRECTORS

Proposal and Required Vote

Proposal 1 is the election of nineten nominees to the Board of Directors. In accordance with our By-Laws, the Board has fixed the number of directors constituting the entire Board of Directors at nine.ten. The Governance and Nominating Committee, or Governance Committee, has evaluated individual board members, the committees and the Board of Directors as a whole. The evaluation sought to ascertain, among other things, whether the Board and its committees were functioning effectively and whether the directors had the necessary skills, background and experiences to meet the company’sCompany’s evolving needs. Based on this evaluation, the Governance Committee has recommended that the current directors described below be nominated for re-election.election. If elected, each will hold office until the next succeeding annual meetingAnnual Meeting of shareholders or until such director’s successor has been duly elected and qualified. Information concerning all director nominees appears below.

Each of the nominees has consented to bebeing named as a nominee and has indicated his or her intention to serve, if elected. If any nominee should decline re-election or become unable to serve for any reason, votes will be cast for a substitute nominee, if any, designated by the Board of Directors or, if none is so designated prior to the election, votes will be cast according to the judgment of the person or persons voting the proxy.

Our directors are elected by a plurality vote of the shares present in person or represented by proxy at the meeting and entitled to vote. In accordance with our Corporate Governance Guidelines, in an uncontested election (i.e., an election where the number of nominees is not greater than the number of directors to be elected) any nominee for director who receives a greater number of votes “against” his or her election than votes “for” such election shall promptly offer his or her resignation to the Board. The Governance Committee shall consider the resignation offer and make a recommendation to the Board. In deciding the action to be taken with respect to any such resignation offer, the independent members of the Board shall consider a number of factors to determine what is in the best interests of the companyCompany and its shareholders. Following the Board’s decision, we will promptly disclose publicly such decision, together with a description of the process by which the decision was made and, if applicable, the Board’s reason or reasons for rejecting the tendered resignation.

Valid proxies received pursuant to this solicitation will be voted in the manner specified. Where no specification is made, it is intended that the proxies received from shareholders will be voted FOR the election of the director nominees identified below.

The Board of Directors unanimously recommends that shareholders vote FOR the election of each of its nominees for director named below.

Information Regarding Director Nominees

The information provided below about each nominee is as of the date of this proxy statement. The information presented includes the names of each of the nominees, along with his or her age, all positions held with the company,Company, term of office as a director, principal occupations or employment for the past five years or more, involvement in certain legal proceedings, if applicable, and the namenames of all other publicly-held companies for which he or she currently serves as a director or has served as a director during the past five years. The information also includes a description of the specific experience, qualifications, attributes and skills of each nominee that led our Governance Committee to conclude that he or she should serve as a director of the companyCompany for the ensuing term.

Patrick Bousquet-Chavanne, 54,William Costello, 67, has served as a member of the Board of Directors since August 2008. Since September 2009, Mr. Bousquet-Chavanne has held positions with Yoostar Entertainment Group, the owner and developer of the Yoostar technology and interactive entertainment system. Since May 2010, Mr. Bousquet-Chavanne has served as Co-Chairman of Yoostar and from September 2009 to May 2010, he served as President and Chief Executive Officer. From July 2008 to August 2009, Mr. Bousquet-Chavanne served as President,

Chief Executive Officer and member of the board of directors of T-Ink, Inc., a company specializing in advanced conductive technology. From July 2001 through June 2008, Mr. Bousquet-Chavanne served as Group President of The Estée Lauder Companies Inc., a leading provider of skin care, makeup and fragrance products. Previously, Mr. Bousquet-Chavanne was President of Estée Lauder International, Inc. Prior to that, Mr. Bousquet-Chavanne served as Managing Director in the United Kingdom for Elizabeth Arden, a global prestige and beauty products company. Mr. Bousquet-Chavanne is a member of the board of directors of Brown-Forman Corporation and serves on the Advisory Board of the New York City Ballet.

Mr. Bousquet-Chavanne’s service with both The Estée Lauder Companies Inc. and Elizabeth Arden provide him with invaluable insight into the beauty industry. Beauty products are generally key entry points for customers of our HSN operating segment. In his roles with Yoostar, Mr. Bousquet-Chavanne also has insight into the retail electronics market, another important category for HSN. As a result of Mr. Bousquet-Chavanne’s knowledge of these merchandise categories and his many years of experiences with branding, licensing and distribution of consumer goods, he is able to provide valuable strategic insight on reaching consumers and on the importance of innovation.

Michael C. Boyd, 70, has served as a member of the Board of Directors since August 2008. Mr. Boyd currently serves on the board of directors of FourthWall Media, formerly known as BIAP.com, a leading provider of interactive television and advanced advertising solutions. From 2002 to 2010, Mr. Boyd served as Chairman and Chief Executive Officer of Longport, Inc., a medical technology company specializing in high resolution imaging. In 1986, Mr. Boyd co-founded QVC, Inc., a leader in consumer direct commerce and one of our direct competitors in the direct response television arena. He served as President until his retirement in 1994. Mr. Boyd previously served on the board of directors of SHOP.COM, a site devoted to delivering a comprehensive shopping experience on the web, and The Franklin Mint, the world’s leading private mint. Mr. Boyd has been nominated as a director by Liberty Media Corporation, our largest shareholder. See “Certain Relationships and Related Party Transactions—Relationship Between HSNi and Liberty.”

Mr. Boyd’s experience with QVC and his service on the board of directors of Fourth Wall Media, and formerly SHOP.COM, provide him with valuable insight into the electronic retailing and direct-to-consumer markets. Mr. Boyd also has extensive experience in the direct response catalog and collectible businesses. Mr. Boyd’s professional experiences and his significant knowledge of issues that directly impact the television retail and catalog industries make him particularly well-suited for service to HSNi.

William Costello, 65, has served as a member of the Board of Directors since August 2008. Beginning in November 1989 and throughUntil his retirement in March 2007, Mr. Costello served in a number of executive positions with QVC.QVC, Inc. He joined QVC as its Chief Financial Officer in November 1989, became President of QVC International in July 2001 and Chief Operating Officer in May 2002. Prior to joining QVC, Mr. Costello served as Chief Financial Officer, then

Chief Operating Officer and a member of the board of directors of Best Products, a catalog showroom retailer. Prior to joining Best Products, Mr. Costello was a partner at KPMG LLP. Mr. Costello was nominated as a director of HSNi by Liberty Media Corporation.Interactive Corporation, our largest shareholder. See “Certain Relationships and Related PartyPerson Transactions—Relationship Between HSNi and Liberty.”

Mr. Costello’s executive positions with QVC have given him important insight into the area of electronic retailing and his experience with Best Products has given him valuable insight into the catalog business. Mr. Costello’s professional experiences as well as his financial acumen enable him to provide significant contributions to HSNi,the Board of Directors, particularly in the areas of operations and finance. Mr. Costello’s professional experiences also enable him to qualify as an “audit committee financial expert” as defined by the SEC.

James M. Follo, 52,54, has served as a member of the Board of Directors since August 2008. Since January 2007, Mr. Follo has served as Senior Vice President and Chief Financial Officer of The New York Times Company, a diversified media company that includes newspapers and internet businesses. From July 1998 through March 2006, Mr. Follo served in various senior financial management positions at Martha Stewart Living Omnimedia, Inc., an integrated media and merchandising company, most recently as Chief Financial and Administrative Officer. Mr. Follo is a certified public accountant.

As the Chief Financial Officer of The New York Times, Mr. Follo’s responsibilities include all treasury, financial reporting, financial management, investor relations, taxes and internal audit oversight. Mr. Follo’s professional experiences enable him to qualify as an “audit committee financial expert” as defined by the SEC. Mr. Follo also has experience in such industries as print media, digital media, television, licensing and product design, catalog and e-commerce, all industries in which HSNi also operates. As a result of Mr. Follo’s extensive business and financial experience, he is able to provide valuable business, financial and risk management advice. Mr. Follo’s specific experiences and leadership skills make him a valuable asset to our Board.

Mindy Grossman, 54,56, has served as a member of our Board of Directors and Chief Executive Officer since August 2008. Commencing in April 2006 and through August 2008, Ms. Grossman served as Chief Executive Officer of IAC Retailing, which consisted of HSN, Cornerstone Brands and two other IAC e-commerce businesses. Ms. Grossman joined IAC from Nike, Inc., the largest seller of athletic footwear and apparel in the world, where she served as Vice President and head of the company’s global apparel business from October 2000 to March 2006. From October 1995 to October 2000, Ms. Grossman was President and CEO at Polo Jeans Company, then a licensee of Polo Ralph Lauren Corporation, and from October 1994 to October 1995, Vice President of New Business Development at Polo Ralph Lauren Corporation, a global leader in the design, marketing and distribution of premium lifestyle products. From September 1991 to October 1994, Ms. Grossman was President of the Chaps Ralph Lauren division of Warnaco’s Menswear and Executive Vice President of Warnaco Menswear division. From June 1987 to September 1991, Ms. Grossman was Vice President of Sales and Merchandising at Tommy Hilfiger, a global apparel and retail company. Ms. Grossman serves on the board of directors of Bloomin’ Brands, Inc., a holding company with a portfolio of restaurant concepts, as well as on the boards of the National Retail Federation and Fisker Automotive,the U.S. Fund for UNICEF, and serves as well as onthe Chairman of the board of Cosmetic Executive Women. She is a memberdirectors of the advisory boardNRF Foundation, the non-profit arm of the J. Baker School ofNational Retail at the Wharton School of Business.Federation.

Ms. Grossman is a 33-year35-year veteran of the apparel and retail industries and is well-known for brand strategy and business development. She gained significant experience building businesses at Nike, Polo Jeans, Ralph Lauren and Tommy Hilfiger and, since becoming CEO of HSNi in 2006, has used this experience to help transform and relaunch HSN and to develop and expand the brand and product portfolio. Ms. Grossman brings to the Board extensive leadership, business and management experience, including specific experience in brand development. Ms. Grossman’s service as a director and CEO establishes a critical link between the Board and the senior leaders at HSNi, enabling the Board to perform its oversight function with the benefit of management’s perspective on the business.

Stephanie Kugelman, 64,66, has served as a member of our Board of Directors since August 2008. Ms. Kugelman currently serves as a principal of A.S.O., A Second Opinion, a brand consultancy firm that she founded in 2007. Prior to that, for 36 years and until her retirement in 2007, Ms. Kugelman was employed by Young & Rubicam, a marketing and communications company specializing in advertising, public relations, direct marketing and brand identity consulting. During her tenure at Young & Rubicam, Ms. Kugelman served in increasingly senior roles, most recently as Vice Chairman and Chief Strategic Officer from June 2001 to March 2007 and as Chairman and Chief Executive Officer of Young & Rubicam’s New York office from May 1999 to May 2001. Ms. Kugelman continues to serve as a Vice Chairman Emeritus at Young & Rubicam. She is also a member of the board of directors of Whole Foods Market, Inc., the world’s largest retailer of natural and organic foods, as well as Safe Horizon, a support and advocacy agency for victims of sexual and domestic violence, crime and abuse.or trafficking.

Ms. Kugelman has significant experience with research, strategy, branding and management through her many years with Young & Rubicam. Through her consulting firm, Ms. Kugelman also specializes in consulting on strategy and marketing. Ms. Kugelman brings significant insight on strategic matters such as brand development, management and marketing. Through her professional and personal experiences, Ms. Kugelman is able to identify with our core customers and provide tremendous insight into the buying trends of those core customers.

Arthur C. Martinez, 72,74, has served as the Chairman of the Board since August 2008. Mr. Martinez retired in 2000 as Chairman of the Board, President and Chief Executive Officer of Sears Roebuck and Co., positions he held since 1995. From 1992 to 1995, he was Chairman and Chief Executive Officer of the former Sears Merchandise Group, the fourth largest broadline retailer with approximately 3,900 retail stores. From 1990 to 1992, Mr. Martinez served as Vice Chairman and a director of Saks Fifth Avenue, a fashion retail organization. Mr. Martinez is currently a member of the boards of directors of Abercrombie & Fitch Co., American International Group, Inc., IAC,and International Flavors & Fragrances Inc. Mr. Martinez will not stand for re-election on the boards of Kate Spade and Company (formerly Fifth & Pacific Companies, Inc.) and IAC/InterActiveCorp., Liz Claiborne, Inc. andor IAC. Mr. Martinez also previously served on the board of directors of PepsiCo, Inc. In addition, Mr. Martinez serves as a Trustee of Greenwich Hospital, Northwestern University, the Chicago Symphony Orchestra and Maine Coast Heritage Trust.

Mr. Martinez’s significant experience working in the retail industry and advising and counseling members of senior management has made him a valuable resource to our executive officers. As a result of his significant professional experience in the retail environment, Mr. Martinez is very familiar with issues related to strategy, finance and operations faced by HSNi. Mr. Martinez’s service on the boards of several leading public companies enables him to provide critical corporate governance and compliance insights as well as ensure that our Board meetings are efficiently and effectively run.

Thomas J. McInerney, 47,49, has served as a member of the Board of Directors since August 2008. Mr. McInerney is currently a private investor. From January 2003 through March 2012, Mr. McInerney held positions of increasing responsibilities with IAC/InterActiveCorp, or IAC, our former parent company and a leading internet company. From January 2005 through March 2012, Mr. McInerney served as Executive Vice President and Chief Financial Officer of IAC and, from January 2003 through December 2005, Mr. McInerney served as Chief Executive Officer of the retailing division of IAC (which included HSN and Cornerstone). Beginning in May 1999 and through January 2003, Mr. McInerney served as Executive Vice President and Chief Financial Officer of Ticketmaster and its predecessor company, Ticketmaster Online-Citysearch, Inc., a leading live entertainment ticketing and marketing company. Prior to joining Ticketmaster, Mr. McInerney worked at Morgan Stanley, most recently as a Principal. Mr. McInerney also serves on the board of directors of Interval Leisure Group, Inc. and Yahoo! Inc.

Mr. McInerney served as a senior executive officer of our former parent company for over eight years and he served as Chief Executive Officer of HSNi’s predecessor company for three years. As a result, Mr. McInerney has specific knowledge of our business model and operations. Mr. McInerney’s experience with technology

companies enables him to provide valuable insight as we continue to expand our business model on to different platforms. The Board has been able to leverage Mr. McInerney’s significant knowledge of financial matters as well as specific knowledge of HSNi historical matters. Mr. McInerney’s experience with financial reporting, financial management and audit oversight enable him to qualify as an “audit committee financial expert” as defined by the SEC and make him a valuable asset to our Audit Committee.

John B. (Jay) Morse, Jr., 65,67, has served as a member of the Board of Directors since December 2008. From November 1989 and until his retirement in December 2008, Mr. Morse served as Senior Vice President—Finance and Chief Financial Officer of The Washington Post Company, a diversified education and media company. He also served as President of Washington Post Telecommunications, Inc. and Washington Post Productions, Inc., both subsidiaries of The Washington Post Company. Prior to joining The Washington Post Company, Mr. Morse was a partner at PricewaterhouseCoopers where he worked with publishing/media companies and multilateral lending institutions for more than 17 years. Mr. Morse is currently a member of the board of directors of Host Hotels & Resorts Inc. (formerly Host Marriott Corporation) and AES Corporation. Mr. Morse also servesserved as a Trustee and President Emeritus of the College Foundation of the University of Virginia and is a former member of the Financial Accounting Standards Advisory Council (FASAC), an advisory group to the Financial Accounting Standards Board.

Mr. Morse brings substantial executive experience to our Board, specifically in the areas of finance, board oversight and investments. In his former positions, Mr. Morse was responsible for preparation of financial statements and SEC filings as well as treasury, tax, audit and risk management and has a deep understanding of accounting principles and financial reporting rules and regulations. Mr. Morse’s experiences enable him to

qualify as an “audit committee financial expert.” He has significant financial knowledge as demonstrated by his work history, his current service on the audit committees of Host Hotels & Resorts, Inc. and AES Corporation and his involvement with the FASAC. Mr. Morse’s experience with companies operating in different industries enables him to provide broad perspectives.

Matthew E. Rubel, 56, has served as a member of the Board of Directors since September 2013. Mr. Rubel currently serves as a Senior Advisor with TPG Capital, a leading global private investment firm with over $50 billion of capital under management. Until 2011, Mr. Rubel was the Chairman, President and Chief Executive Officer of Collective Brands, a leading retailer and marketer of lifestyle, fashion and performance brands. Mr. Rubel joined Collective Brands in 2005 as Chief Executive Officer and President. Mr. Rubel’s extensive merchandising and retailing background includes serving as Chairman, President and CEO of Cole Haan from 1999 to 2005. Prior to that, Mr. Rubel served as Executive Vice President of J. Crew Group and CEO of Popular Club Plan. Mr. Rubel has led a number of other top brands, including as President and Chief Executive Officer of Pepe Jeans, USA, as well as managing Revlon Inc.‘s prestige cosmetic brands as President of the Specialty Store Division. Mr. Rubel also served as Executive Vice President of Murjani International Ltd., where he was in charge of the Tommy Hilfiger businesses. Mr. Rubel is a member of the board of directors of SUPERVALU Inc. and serves as Chairman of its Leadership Development and Compensation Committee. Mr. Rubel is also a director and serves as Chairman of the Governance Committee for Hudson’s Bay Company. Mr. Rubel previously served as Chairman and a director at Collective Brands, Inc. As a White House appointee, Mr. Rubel serves on the United States Trade Representative (USTR) Advisory Committee for Trade Policy and Negotiations.

Mr. Rubel’s significant retail, business and finance experience makes him a valuable addition to our Board. In addition, Mr. Rubel’s professional experiences enable him to qualify as an “audit committee financial expert” as defined by the SEC.

Ann Sarnoff, 52, has served as a member of the Board of Directors since December 2012. Ms. Sarnoff currently serves as the Chief Operating Officer of BBC Worldwide North America, a broadcasting company that delivers high-quality, innovative and intelligent programming. Ms. Sarnoff is responsible for the company’s North American businesses and has held this role since 2010. From 2006 until joining the BBC in 2010,

Ms. Sarnoff was President of Dow Jones Ventures and Senior Vice President of Strategy for Dow Jones & Company, Inc. Previously, Ms. Sarnoff served for two years as Chief Operating Officer of the Women’s National Basketball Association and spent ten years at Viacom Inc. where she ultimately became Chief Operating Officer for VH1 and Country Music Television. Ms. Sarnoff is currently a member of the executive advisory board of the McDonough School of Business at Georgetown and is a member of the boards of Women’s Forum of New York and the Harvard Business School Women’s Association of New York. Ms. Sarnoff earned a Bachelor of Science degree from Georgetown University and a Masters in Business Administration from Harvard Business School. She was named one of the Most Powerful Women in Cable by CableFAX Magazine.

Ms. Sarnoff’s expertise in developing and growing businesses and brands, in addition to her proven success as a highly accomplished leader, make her a valuable addition to our Board. With over 20 years of extensive business experience in television and digital media and entertainment, Ms. Sarnoff is able to provide valuable insight to management and the Board.

Courtnee Ulrich, 39, has served as a member of the Board of Directors since May 2013. Ms. Ulrich is Vice President of Investor Relations for Liberty Interactive Corporation and Liberty Media Corporation having joined Liberty Media in 2008. Prior to joining Liberty Media, Ms. Ulrich held executive level positions at Level 3 and New Global Telecom, or NGT, where she served as Chief Financial Officer. Prior to NGT, Ms. Ulrich received extensive transaction experience in mergers and acquisitions and the financial markets at FirstWorld Communications and at J.P. Morgan. Ms. Ulrich currently serves on the board of directors for Planned Parenthood of the Rocky Mountains. Ms. Ulrich was nominated as a director of HSNi by Liberty Interactive Corporation. See “Certain Relationships and Related Person Transactions—Relationship Between HSNi and Liberty.”

Ms. Ulrich’s broad based experience in a number of industries including electronic retailing, technology, direct-to-consumer markets, telecommunications and media as well deep expertise in investor and public relations makes her an asset to the Board and management as we continue to focus on utilizing technology, social networks and mobility to redefine shopping.

Assuming election of all nominees above, below is a list of persons who will constitute our Board of Directors following the meeting, including their committee assignments. Additional information regarding the roles and responsibilities of each of the different committees is provided in the section entitled “Corporate Governance.”

PROPOSAL 2—ADVISORY VOTE ON EXECUTIVE COMPENSATION

Proposal and Required Vote

Proposal 2 is to approve the compensation of our named executive officers, or NEOs, disclosed pursuant to the SEC’s compensation disclosure rules, including the compensation discussion and analysis, compensation tables and narrative discussion. These are described in the sections of this proxy statement entitled “Compensation Discussion and Analysis” and “Executive Compensation.” This proposal, commonly known as a “say on pay” proposal, is in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Reform Act, which requires companies such as HSNi to include an advisory vote on executive compensation at certain shareholder meetings held on or after January 21, 2011.

The advisory vote is non-binding, meaning that our Board will not be obligated to take any compensation actions or adjust our executive compensation in response to the vote. The proposal gives shareholders the opportunity to endorse or not endorse our fiscal 2013 executive compensation, including philosophy, programs and policies and the compensation paid to our NEOs. Although the vote is non-binding, the Compensation and Human Resources Committee, or the Compensation Committee, and the Board will review the results of the vote. To the extent there is a significant vote against the compensation of our NEOs, we would expect to communicate with our shareholders to better understand the concerns that influenced that vote. The Board and Compensation Committee would consider constructive feedback obtained through this process in making future determinations concerning our executive compensation. Based on our shareholders’ approval of a triennial, or three year, vote on executive compensation, the next advisory vote on our NEOs compensation will be held in 2017.

The Board of Directors unanimously recommends that the shareholders vote FOR the approval, on an advisory basis, of the compensation of our NEOs as described in the sections of this proxy statement entitled “Compensation Discussion and Analysis” and “Executive Compensation.”

Information Regarding Executive Compensation

As described in the Executive Compensation and the Compensation and Discussion Analysis sections included in this proxy statement, the Compensation Committee has developed an executive compensation program and related practices, policies and procedures, designed to attract and retain talent critical to our long-term success, reward performance and align the interests of our NEOs with the interests of our shareholders. Consistent with this philosophy, a significant portion of the total compensation opportunity for each of our NEOs is directly related to performance factors that measure our progress against the goals of our operating plan. We believe that our executive compensation program is strongly aligned with the interests of our shareholders.

Shareholders are urged to read the Compensation Discussion and Analysis and Executive Compensation sections of this proxy statement, which discuss and describe how our compensation policies and procedures implement our compensation philosophy. Management of the Company and the Compensation Committee believe that the compensation program is instrumental in helping HSNi achieve strong financial performance.

PROPOSAL 3—APPROVAL OF THE PERFORMANCE GOALS UNDER THE SECOND AMENDED AND RESTATED 2008 STOCK AND ANNUAL INCENTIVE PLAN

Proposal and Required Vote

We are asking for your approval of the HSN, Inc. Second Amended and Restated 2008 Stock and Annual Incentive Plan, or the Plan. While the Plan itself does not require approval by shareholders, the approval of the Plan, including the performance criteria described in the Plan, would give the Company the benefit of a U.S. income tax deduction under Section 162(m) of the Code for certain covered employees. This proposal does not involve an increase in the number of shares of our common stock that may be issued under the Plan or extend the plan beyond its current expiration date.

Section 162(m) of the Code limits the deductibility of compensation of “covered employees” to $1 million per year unless the compensation qualifies as “performance-based.” Incentive compensation can be deductible if four conditions set forth by the Internal Revenue Service are met. These conditions are:

We are requesting shareholders approval in order to meet the third requirement listed above. To continue to qualify for this exception, our shareholders must approve the material terms of the performance goals provided for in the Plan.

Our Board of Directors recommends that shareholders vote FOR this proposal in order to enable us to qualify compensation provided under the Plan in connection with cash and equity linked awards as performance-based for Section 162(m) purposes. If our shareholders do not approve the performance goals as proposed, the Plan will continue in effect in the form in which it currently exists. In that event, the Compensation Committee would consider the resulting limitation on the deductibility of awards to covered employees in structuring future awards to those employees, but may approve cash and equity linked awards for which some of the potential deduction is lost if the Compensation Committee considers such action to be in the best interest of our Company and shareholders.

Approval of this proposal requires the affirmative vote of a majority of the votes cast.

The Board of Directors unanimously recommends a vote FOR approval of the Performance Goals under the Seconded Amended and Restated 2008 Stock and Annual Incentive Plan.

A summary of the Plan’s primary features is contained below, but the summary is qualified in its entirety by the complete text of the Plan, which is attached to this proxy statement as Appendix A. Any capitalized terms used but not defined in this summary have the meaning contained in the Plan.

Summary of Plan

The purpose of the Plan is to assist management in attracting, retaining and motivating officers and employees, and to enable management to provide incentives more directly linked to the profitability of our business and increases in shareholder value. Awards under the Plan are designed to motivate our employees to focus on long-term performance through cash or equity awards and reinforce accountability by linking a portion of executive compensation to our long-term performance goals.

Administration

The Plan is administered by the Compensation Committee or such other committee of the Board as the Board of Directors may from time to time designate. Among other things, the committee will have the authority to select individuals to whom awards may be granted, to determine the type of award, the dollar amount or number of shares of common stock to be covered by each award, to establish the performance goals upon which bonuses are paid and awards are made under the Plan, to determine the terms and conditions of any such awards, and to determine whether or the extent to which, if any, that the performance goals have been achieved.

Performance Goals

The Plan allows the Compensation Committee to establish the performance goals in connection with the grant of restricted stock, RSUs, bonus awards or other stock-based awards. The performance goals upon which the payment or vesting of an award to a covered employee that is intended to qualify as “performance-based compensation” depends shall relate to one or more of the following performance measures: (i) specified levels of earnings per share from continuing operations; adjusted earnings per share; net profit after tax; adjusted net income; earnings before interest, taxes, depreciation and amortization, or EBITDA; adjusted EBITDA; earnings before interest, taxes and amortization, or EBITA; adjusted 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 and (ii) such Performance Goals shall be set by the Compensation 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.

Eligibility

Persons who serve or agree to serve as officers, employees, non-employee directors or consultants of HSNi and its subsidiaries and affiliates will be eligible to receive awards under the Plan. As of February 12, 2014, 352 persons (including all named executive officers and our Board members) are eligible to participate in the Plan. In addition individuals who hold outstanding Adjusted Awards participate in the Plan.

Shares Subject to the Plan

The Plan authorizes the issuance of up to 8,000,000 shares of our common stock pursuant to new awards under the Plan, plus shares granted pursuant to the assumption of outstanding Adjusted Awards under the IAC Plan. No single participant may be granted awards covering in excess of 3,333,333 shares of our common stock over the life of the Plan.

The shares of our common stock subject to grant under the Plan are to be made available from authorized but unissued shares or from treasury shares, as determined from time to time by the Board of Directors. Other than Adjusted Awards, to the extent that any award is forfeited, or any option or stock appreciation right terminates, expires or lapses without being exercised, or any award is settled for cash, the shares of common stock subject to such awards not delivered as a result thereof will again be available for awards under the Plan. To the extent any Adjusted Award is forfeited, terminates, expires or lapses without being exercised or is settled for cash, the shares of common stock subject to such award not delivered as a result,do not become available for awards under the Plan. If the exercise price of any option and/or the tax withholding obligations relating to any award are satisfied by delivering shares of common stock (by either actual delivery or by attestation), only the number of shares of common stock issued net of the shares of common stock delivered or attested to will be deemed delivered for purposes of the limits in the Plan. To the extent any shares of common stock 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 of common stock will not generally be deemed to have been delivered for purposes of the limits set forth in the Plan.

The Plan provides that in the event of certain extraordinary corporate transactions (such as a merger, consolidation, liquidation or other similar events), the Compensation Committee or the Board of Directors may 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 the Plan, (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, or SARs. Notwithstanding the foregoing, the Plan also provides that the Board of Directors may not decrease the exercise price for other than extraordinary events, as defined in Section 3(d) of the Plan, except upon approval of our shareholders.

Types of Awards

Several types of stock grants can be made under the Plan. A summary of these types of grants is set forth below.

Stock Options and Stock Appreciation Rights

Stock options granted under the Plan may either be incentive stock options or nonqualified stock options. SARs granted under the Plan may either be granted alone or in tandem with a stock option. SARs may be settled in cash or stock, at the discretion of the Board or the Compensation Committee, although only stock-settled SARs have been issued to date. Holders of stock-settled SARs will only receive shares with a value equal to the spread between the current market price per share of common stock and the exercise price. The exercise price of options and SARs cannot be less than 100% of the fair market value of the stock underlying the options or SARs on the date of grant. Optionees may pay the exercise price in cash or, if approved by the committee, in common stock (valued at its fair market value on the date of exercise) or a combination thereof, or by “cashless exercise” through a broker or by withholding shares otherwise receivable on exercise. The term of options and SARs will be as determined by the committee, but options and SARs may not have a term longer than ten years from the date of grant. The committee will determine the vesting and exercise schedule of options and SARs, and the extent to which they will be exercisable after the award holder’s employment terminates. Generally, unvested options and SARs terminate upon the cessation of employment, and vested options and SARs will remain exercisable for one year after the award holder’s death, disability or retirement, and 90 days after the award holder’s termination for any other reason. Vested options and SARs will also terminate upon the optionee’s termination for cause (as defined in the Plan). Stock options and SARs are transferable only by will or by the laws of descent and distribution, or pursuant to a qualified domestic relations order or in the case of nonqualified stock options or SARs, as otherwise expressly permitted by the committee including, if so permitted, pursuant to a transfer to the participant’s family members, to a charitable organization, whether directly or indirectly or by means of a trust or partnership or otherwise.

Restricted Stock and Restricted Stock Units

RSUs are awards in the form of phantom shares or units that are denominated in a hypothetical equivalent number of shares of our common stock. At the time of grant, HSNi determines if the RSUs will be settled in cash, stock or both. The value to the holder of the RSU is based upon the market value of our stock when the RSUs vest. Restricted stock may be granted with such restriction periods as the committee may designate. The committee may provide at the time of grant that the vesting of restricted stock will be contingent upon the achievement of applicable performance goals and/or continued service. The committee may grant RSUs payable in cash or shares of common stock. The terms and conditions of restricted stock awards (including any applicable performance goals) need not be the same with respect to each participant. During the restriction period, the

committee may require that the stock certificates evidencing restricted shares be held by HSNi. RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered, and are generally forfeited upon termination of employment, unless otherwise provided by the committee. Other than such restrictions on transfer and any other restrictions the committee may impose, the participant will have all the rights of a shareholder with respect to the restricted stock award.

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, common stock, including (without limitation), unrestricted stock, dividend equivalents and convertible debentures, may be granted under the Plan.

Bonus Awards

Bonus awards granted to eligible employees of HSNi and its subsidiaries and affiliates under the Plan will be based upon the attainment of the performance goals established by the committee for the Performance Period it may establish. Bonus awards earned by any individual will be limited to $10 million for any Performance Period. Bonus awards will be paid in cash or, at the discretion of HSNi, in HSNi common stock, as soon as practicable following the end of the Performance Period. The committee may reduce or eliminate a participant’s bonus award in any year notwithstanding the achievement of performance goals.

Change of Control

In the event of a Change of Control (as defined in the Plan), the committee has discretion to determine the treatment of awards granted under the Plan, including providing for the acceleration of such awards upon the occurrence of the Change of Control and/or upon a qualifying termination of employment (e.g, without cause or for good reason) following the Change of Control.

No Repricing

In no event may any option or SAR granted under the Plan be amended, other than in the event of certain extraordinary corporate transactions or other transactions affecting our capital structure, to decrease the exercise price thereof, be cancelled in conjunction with the grant of any new option or SAR with a lower exercise price or otherwise be subject to any action that would be treated, for accounting purposes, as a “repricing” of such option or SAR, unless such amendment, cancellation, or action is approved by our shareholders.

Withholding for Payment of Taxes

The Plan provides for the withholding and payment by a participant of any taxes required by applicable law. Subject to our approval and to the terms of the Plan, a participant may settle such a withholding obligation with our common stock, including common stock that is a part of the award giving rise to the withholding obligation. We have the right to deduct any such taxes from any payment otherwise due to a participant.

Amendment and Discontinuance

The Plan may be amended, altered or discontinued by the Board, but no amendment, alteration or discontinuance may impair the rights of an optionee under an option or a recipient of a SAR, restricted stock award, RSU award or bonus award previously granted without the optionee’s or recipient’s consent. Amendments to the Plan will require shareholder approval to the extent such approval is required by law or agreement.

Federal Income Tax Consequences

With respect to nonqualified stock options, we are generally entitled to deduct and the optionee recognizes taxable income in an amount equal to the difference between the option exercise price and the fair market value of the shares at the time of exercise. A participant receiving incentive stock options will not recognize taxable income upon grant. Additionally, if applicable holding period requirements are met, the participant will not recognize taxable income at the time of disposition. However, the excess of the fair market value of the common stock received over the option price is an item of tax preference income potentially subject to the alternative minimum tax. If stock acquired upon exercise of an incentive stock option is held for a minimum of two years from the date of grant and one year from the date of exercise, the gain or loss (in an amount equal to the difference between the fair market value on the date of sale and the exercise price) upon disposition of the stock will be treated as a long-term capital gain or loss, and we will not be entitled to any deduction. If the holding period requirements are not met, the incentive stock option will be treated as one that does not meet the requirements of the Code for incentive stock options and the tax consequences described for nonqualified stock options will apply.

The current federal income tax consequences of other awards authorized under the Plan generally follow certain basic patterns: SARs are taxed and deductible in substantially the same manner as nonqualified stock options; nontransferable restricted stock subject to a substantial risk of forfeiture results in income recognition equal to the excess of the fair market value over the price paid, if any, only at the time the restrictions lapse (unless the recipient elects to accelerate recognition as of the date of grant); RSUs, stock-based performance awards, dividend equivalents and other types of awards are generally subject to tax at the time of payment. Compensation otherwise effectively deferred is taxed when paid. In each of the foregoing cases, we will generally have a corresponding deduction at the time the participant recognizes income, subject to Section 162(m) of the Code with respect to covered employees.

Section 162(m) of the Code denies a deduction to any publicly held corporation for compensation paid to certain “covered employees” in a taxable year to the extent that certain compensation to such covered employee exceeds $1 million. It is possible that compensation attributable to awards under the Plan, when combined with all other types of compensation received by a covered employee from us, may cause this limitation to be exceeded in any particular year. Certain kinds of compensation, including qualified “performance-based compensation,” are disregarded for purposes of the deduction limitation. In accordance with Treasury Regulations issued under Section 162(m), compensation attributable to stock awards will generally qualify as performance-based compensation if (i) the award is granted by a compensation committee composed solely of two or more “outside directors,” (ii) the plan contains a per-employee limitation on the number of awards which may be granted during a specified period, (iii) the plan is approved by the shareholders, and (iv) under the terms of the award, the amount of compensation an employee could receive is based solely on an increase in the value of the stock after the date of the grant (which requires that the exercise price of the option is not less than the fair market value of the stock on the date of grant), and for awards other than options, established performance criteria that must be met before the award actually will vest or be paid.

The Plan is designed to meet the requirements of Section 162(m); however, full value awards granted under the Plan will only be treated as qualified performance-based compensation under Section 162(m) if the full value awards and the procedures associated with them comply with all other requirements of Section 162(m). There can be no assurance that compensation attributable awards granted under the Plan will be treated as qualified performance-based compensation under Section 162(m) and thus be deductible by us.

Plan Benefits

The actual amount of awards that may be payable to participants under the Plan in future years cannot currently be determined. The following table highlights the plan benefits that were provided or allocated to each of the following individuals for the 2014 (pre 2014 salary adjustments) fiscal year under the Plan, except for the Non-Executive Director Group which is based on 2013 totals:

SECOND AMENDED AND RESTATED 2008 STOCK AND ANNUAL INCENTIVE PLAN

PROPOSAL 4—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED

CERTIFIED PUBLIC ACCOUNTING FIRM

Proposal and Required Vote

Proposal 24 is to ratify the appointment of our independent registered certified public accounting firm. Based on the recommendation of ourOur Audit Committee the Board of Directors has appointed Ernst & Young LLP, or E&Y,EY, as our independent registered certified public accounting firm for the fiscal year ending December 31, 2012. E&Y2014. EY has served as our independent registered certified public accounting firm since 2008. A representative of E&YEY is expected to be present at the annual meetingAnnual Meeting and will be given an opportunity to make a statement if he or she so chooses and will be available to respond to appropriate questions.

Our By-Laws do not require that the shareholders ratify the appointment of E&Y;EY; however, we are submitting the appointment of E&YEY to the shareholders for ratification as a matter of good corporate governance. If the shareholders do not ratify the appointment, the Board of Directors and the Audit Committee will reconsider whether or not to retain E&Y.EY. Even if the appointment is ratified, the Board and the Audit Committee, in their discretion, may change the appointment at any time during the year if they determine that such a change would be in the best interests of HSNi and our shareholders.

The ratification of the appointment of E&YEY as our independent registered certified public accounting firm for 20122014 requires the affirmative vote of the majority of shares present in person or represented by proxy and entitled to vote.

The Board of Directors unanimously recommends that the shareholders vote FOR ratification of the appointment of Ernst & Young LLP as our independent registered certified public accounting firm for 2012.2014.

Fees Paid to Our Independent Registered Certified Public Accounting Firm

The following table describes the fees for all professional services rendered by E&YEY for the audit of our financial statements for 20102012 and 20112013 and for other services rendered by E&Y:EY:

Audit and Non-Audit Services Pre-Approval Policy

Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation of and overseeing the work of the independent auditor. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit

services provided by the independent auditor. The Audit Committee determines the scope of the independent auditor’s engagement and approves the fees and other compensation to be paid. On an annual basis, the Audit Committee reviews and discusses with the independent auditor all significant relationships the firm has with HSNi to determine the auditor’s independence.

The Audit Committee’s policy is to pre-approve all audit and permitted non-audit services, in accordance with guidelines established by the Audit Committee, performed by our independent registered certified public accounting firm. Pre-approval is generally detailed as to the particular service or category of services and is subject to a specified budget. Management is required to seek pre-approval of services that will exceed the budget or for services that are not detailed in an existing pre-approval. The Chair of the Audit Committee has been delegated the authority to pre-approve certain services between regularly scheduled meetings, with ratification by the Audit Committee at the next regularly scheduled meeting. Management reports quarterly to the Audit Committee on the services provided by the independent registered certified public accounting firm and the fees for the services performed to date. All services performed by E&YEY during fiscal years 20102012 and 20112013 were approved in accordance with this policy.

CORPORATE GOVERNANCE

Generally

Our Board of Directors is elected by the shareholders to oversee management in the conduct of HSNi’s business and to assure that the long-term interests of our shareholders are being served. The Board holds regularly scheduled meetings at least quarterly and as otherwise needed to consider corporate decisions requiring its attention and action. The Board has four standing committees: the Audit Committee, the Compensation and Human Resources Committee (also referred to as the Compensation Committee), the Governance and Nominating Committee (also referred to as the Governance Committee), and the Executive Committee. With the exception of the Executive Committee, each of the committees operates under a written charter which may be found on our corporate website atwww.hsni.com. The principal responsibilities of these committees are described below.below under “The Board of Directors and Committees.”

Code of Ethics and Corporate Governance Guidelines

The Board of Directors adopted a Code of Business Conduct and Ethics which is applicable to all employees of HSNi, including all of our named executive officers, or NEOs, and directors. The code reflects our commitment to the conduct of our business affairs in accordance with not only the requirements of the law but also standards for ethical conduct that will maintain and foster our reputation for honest and straightforward business dealings.

The Board also adopted Corporate Governance Guidelines to provide a flexible framework for the effective functioning of the Board of Directors. HSNi’s corporate governance practices are designed to align the interests of the Board and management with those of HSNi’s stockholdersshareholders and to promote honesty and integrity throughout the company.Company. The guidelines address, among other things, the composition and functions of the Board of Directors, qualifications of Board and committee members, stock ownership guidelines for our directors and NEOs and the process for the selection of new directors.

TheseHSNi is committed to good corporate governance, starting with the Board and extending to management and all employees. As a result, these documents are reviewed annually and amended as necessary or appropriate in response to changing regulatory requirements and evolving best practices. In 2010, the Board of Directors approved an amendment to the Code of Ethics to add an executive compensation recovery, or clawback policy, applicable to all of our executive officers. In 2012, the Board approved amendments to the Corporate Governance Guidelines to (i) include stock ownership guidelines for named executive officers and (ii) describe the disclosure process when the Board is faced with a resignation after a director has received a greater number of votes “against” his or her election than “for” such election.

These documents, as well as other documents relating to corporate governance at HSNi, are available in the corporate governance section of our website atwww.hsni.com. You may also obtain copies of these materials, free of charge, by sending a written request to HSN, Inc., Legal Department, 1 HSN Drive, St. Petersburg, FL 33729, Attn: Corporate Secretary.

Director Qualifications

The Board seeks members from diverse personal and professional backgrounds who combine a broad spectrum of experience and expertise to facilitate Board deliberations that reflect a broad range of perspectives. While the company’sCompany’s Corporate Governance Guidelines do not prescribe specific diversity standards, as a matter of practice, we broadly construe diversity to mean a variety of opinions, perspectives, personal and professional experiences and backgrounds, such as gender, race and ethnicity, as well as other differentiating characteristics. At a minimum, directors should also have an inquisitive and objective perspective, practical wisdom and mature judgment. Directors should also possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of the shareholders. The directors we seek must exhibit a commitment of both time and active attention to fulfill their fiduciary obligations. We also expect our directors to stay informed about issues that are relevant to the company.Company.

The Governance Committee is responsible for identifying, evaluating and recommending candidates to the Board for Board membership. The Governance Committee believes that each of our directors has the qualities and skills that are

necessary to effectively serve the Board of Directors. In addition, each of our directors has certain specific experience, qualities, attributes and/or skills that make him or her uniquely qualified to serve as a director of HSNi.

Director Nominations Process

Directors may be nominated by the Board of Directors or by shareholders in accordance with our By-Laws. In order to fulfill its responsibility to recruit and recommend to the full Board nominees for election as directors, the Governance Committee annually reviews the size and composition of the Board and its committees. In accordance with our Corporate Governance Guidelines, with respect to each nominee, the committee considers director qualifications (as described above), director independence, other directorships or significant activities, service on other boards and the results of the annual evaluations of the Board and its members.

The Governance Committee will, when appropriate, actively seek individuals qualified to become Board members, and solicit input on director candidates from a variety of sources, including current directors. As a matter of course, the Governance Committee will evaluate a candidate’s qualifications and review all proposed nominees, including those proposed by shareholders. The Governance Committee may retain a third party to assist in the nomination process.

Eligible shareholders may nominate a candidate for election to the Board by complying with the nomination procedures in our By-Laws. For an election to be held at an annual meetingAnnual Meeting of shareholders, nomination by a shareholder must be made by written notice delivered to the Corporate Secretary not less than 45 days nor more than 75 days prior to the anniversary of the date on which we first mailed the proxy materials for our last annual meeting.Annual Meeting. An eligible shareholder’s notice to the Corporate Secretary must be in writing and be delivered to HSN, Inc., Legal Department, 1 HSN Drive, St. Petersburg, Florida 33729, Attn: Corporate Secretary, and must include:

The chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedures. A shareholder’s compliance with these procedures will not require HSNi to include information regarding a proposed nominee in HSNi’s proxy solicitation materials.

Pursuant to an agreement with Liberty Interactive Corporation (formerly known as Liberty Media Corporation, or “Liberty”), our largest shareholder, so long as Liberty beneficially owns securities representing at least 20% of the total voting power of HSNi’s equity security,securities, Liberty has the right to nominate up to 20% of the directors serving on the Board of Directors (rounded up to the nearest whole number). Any individual nominated by Liberty must be reasonably acceptable to a majority of the directors on HSNi’s Board who were not nominated by Liberty. All but one of Liberty’s nominees serving on the Board of Directors must qualify as “independent” under applicable stock exchange rules. See “Certain Relationships and Related Person Transactions—Relationship Between HSNi and Liberty.”

Director Independence

It is the Board’s policy that a majority of the members of the Board shall be directors who are independent. Under applicable listing standards, the Board must determine the independence of its directors in light of their

relationships with HSNi and in light of applicable listing standards. To determine independence, the Board uses the NASDAQ rules and reviews information obtained from director questionnaires, our records and publicly available information regarding relationships with HSNi.information. Following these determinations, management monitors transactions, relationships and arrangements that it has considered, as well as any new relationships, for developments that could affect its determinations.

The Board, upon the recommendation of the Governance Committee, has determined that each of Messrs. Bousquet-Chavanne, Boyd,Costello, Follo, Martinez, McInerney, Morse, Rubel and MorseMmes. Kugelman and Ms. KugelmanSarnoff are independent.

This independence determination is analyzed annually in both fact and appearance to promote arms-length oversight.

Board Leadership Structure

Our Corporate Governance Guidelines do not require that we separate the roles of Chairman of the Board and Chief Executive Officer, (“CEO”);or CEO; however, we do currently separate these roles. The CEO is responsible for setting the strategic direction of HSNi and for the day-to-day leadership and performanceoperations of the company.Company. The Chairman is the Board’s principal liaison with management, with particular focus on public company reporting obligations and corporate governance matters. Our Chairman maintains an effective working relationship with the CEO and senior management, provides ongoing guidance to the CEO as to the Board’s needs, interests and opinions and sets the agenda for Board meetings and presides over such meetings. We believe the current structure provides strong leadership for our Board, while also positioning the CEO as the leader of the companyCompany for our investors, employees and other stakeholders.

Shareholder Communications with the Board of Directors

Shareholders who wish to communicate with the Board of Directors or a particular director may send such communication to HSN, Inc., Legal Department, 1 HSN Drive, St. Petersburg, Florida 33729, Attention: Corporate Secretary. The mailing envelope must contain a clear notation indicating that the enclosed letter is a “Shareholder-Board Communication” or “Shareholder-Director Communication.” All such letters must identify the author as a shareholder, provide evidence of the sender’s stock ownership, and clearly state whether the intended recipients are all members of the Board or a particular director or directors. The Corporate Secretary will then review such correspondence and forward it to the Board, or to the specified director(s). The Corporate Secretary will also direct inquiries most properly addressed by other departments, such as customer service or accounts payable, to those departments to ensure that the inquiries are responded to in a timely manner. Any inquiry that presents a matter relevant to accounting, audit, internal controls, or similar issues that is not addressed to a specific Director, will be forwarded to the Chairman of the Audit Committee.

The Board of Directors and Committees

The Board

HSNi’s business is conducted by its employees, under the direction of the CEO and with oversight by the Board of Directors. Board members are elected by the shareholders to oversee management and to assure that the interests of the shareholders are being served. Both the Board and management recognize that the interests of the shareholders are advanced by responsibly addressing the concerns of other stakeholders and interested parties including employees, customers, vendors, suppliers, government officials and the public at large. The Board believes the primary responsibilities of directors are to exercise their business judgment in good faith and to act in a manner they reasonably believe isto be in the best interests of the companyCompany and its shareholders. Directors must fulfill their responsibilities consistent with their fiduciary duties to shareholders and in compliance with all applicable rules and regulations.

In 2011,2013, the Board met fourfive times and acted by written consent once.four times. Each member of the Board of Directors attended at least 75% of the meetings of the Board and the Board committees on which the director served. HSNi has no policy with respect to director attendance at annual meetings;Annual Meetings; however, all Board members have historically attended the annual meetingsAnnual Meetings of shareholdersShareholders in person.

Audit Committee

The Audit Committee oversees our accounting and financial reporting processes and the audits of our consolidated financial statements.statements and internal control over financial reporting. The committee assists the Board of Directors in monitoring (1) the integrity of our financial statements, (2) the effectiveness of our internal control over financial reporting, (3) the qualifications and independence of our independent registered certified public accounting firm, (4) the performance of our internal audit function and independent registered certified public accounting firm, and (5) our compliance with legal and regulatory requirements. The committee is also directly responsible for the appointment, compensation, retention and oversight of the independent registered certified public accounting firm.

The Audit Committee is also responsible for oversight over the company’sCompany’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the company’sCompany’s risk assessment and risk management policies. The Audit Committee reviews all related party transactions in accordance with the company’sCompany’s formal written policy. In addition, the Audit Committee has established procedures for the receipt, retention and treatment of complaints received by the companyCompany regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by companyCompany employees of concerns regarding accounting and auditing matters.

The Audit Committee must consist of no fewer than three members, all of whom must be independent in accordance with applicable listing standards and at least one member must be a “financial expert” as defined under SEC rules. The Audit Committee currently consists of Messrs. Boyd, Follo and Morse, with Mr. Follo serving as Chairman of the committee. Assuming the election of all nominees to the Board of Directors, it is contemplated that Mr. McInerney will joinIn 2013, the Audit Committee consisted of Messrs. Costello, Follo, McInerney, Morse and Rubel, with Mr. Morse will assume the position ofserving as Chairman of the committee. Each of the Audit Committee members is considered “independent” as defined in the NASDAQ rules and SEC rules and regulations applicable to audit committees. The Board of Directors has determined that Messrs. Costello, Follo, McInerney, Morse and MorseRubel are all “audit committee financial experts,” as such term is defined in applicable SEC rules. In 2011,2013, the Audit Committee met seven times.

Compensation and Human Resources Committee

The Compensation and Human Resources Committee, or the Compensation Committee, exercises the powers of the Board of Directors pertaining to compensation and benefits, including incentive/bonus plans, stock compensation plans, retirement programs, insurance plans and salary matters relating to the compensation of the CEO and other executive officers. The Compensation Committee is responsible for periodically reviewing our incentive compensation arrangements to confirm that the design of incentive pay does not encourage unnecessary risk taking. The Compensation Committeecommittee also reviews the Compensation Discussion and Analysis contained in our proxy statement and prepares a report for inclusion in our proxy statement.

The Compensation Committee must consist of no fewer than two members, all of whom must be independent in accordance with applicable listing standards. In addition, at least twoAll members must qualify as “outside” directors within the meaning of Section 162(m) of the Code. TheIRS Code and as “non-employee” directors within the meaning of Rule 16b-3 of the Securities Act of 1934. In 2013, the Compensation Committee currently consistsconsisted of Ms.Mmes. Kugelman and Sarnoff and Messrs. MorseFollo and Bousquet-Chavanne,Morse, with Mr. MorseFollo serving as Chairman of the committee. Assuming the election of all nominees to the Board of Directors, it is contemplated that Mr. Bousquet-Chavanne will assume the position of Chairman of the committee. Each of the Compensation Committee members is considered “independent” as defined in the NASDAQ rules and qualifies as an “outside” director within the meaning of Section 162(m) of the Code.IRS Code and “non-employee” director within the meaning of Rule 16b-3 of the Securities Act of 1934. In 2011,2013, the Compensation Committee met fourseven times.

Governance and Nominating Committee

This committee was originally established in August 2008 as theThe Governance and Nominating Committee, and performed traditional nominating committee type functions. In December 2009,or the committee and Board determined it was in our best interest to have a governance committee and revised the name, authority and responsibilities of this committee to include corporate governance and oversight. The Governance Committee, oversees the identification and evaluation of director candidates, consistent with the criteria approved by the Board, and makes recommendations to the Board with respect to director nominees and the membership of the Board committees.

The Governance and Nominating Committee also reviews and recommends to the Board compensation and benefits for non-employee directors. The committee annually evaluates our Corporate Governance Guidelines and Code of Business Conduct and Ethics. The committee also reviews and assesses the channels through which the Board receives information and the quality and timeliness of that information.

Although the NASDAQ rules do not require that listed companies have a nominating/governance committee, they do require that all director nominees be selected or recommended for the board of directors’ selection either by a majority of independent directors or by a nominating committee composed solely of independent directors. As a result, our Governance and Nominating Committee is comprised solely of independent directors. In 2011,2013, the Governance and Nominating Committee consisted of Messrs. Bousquet-Chavanne, FolloMartinez, McInerney and Martinez,Ms. Sarnoff, with Mr. Martinez serving as Chairman of the committee. Assuming the election of all nominees to the Board of Directors, it is contemplated that Mr. Follo will assume the position of Chairman of the committee. Each of the Governance and Nominating Committee members is considered “independent” as defined in the NASDAQ rules. In 2011,2013, the Governance and Nominating Committee met four times.

Executive Committee

The Executive Committee has all power and authority of our Board of Directors, except those powers specifically reserved to our Board of Directors by Delaware law or our organizational documents. The Executive Committee serves primarily as a means for addressing issues that may arise and require Board approval between regularly scheduled Board meetings.

TheIn 2013, the Executive Committee consistsconsisted of Ms. Grossman and Messrs. Martinez and McInerney. During 2011,2013, the committee did not meet and did not take any action.

Other Committees

In addition to its standing committees, our Board of Directors may from time to time establish other committees of our Board of Directors, consisting of one or more of its directors.

The Board’s Role in Risk Oversight

The Board of Directors is actively involved in the oversight of risks that could affect HSNi. This oversight is conducted in several different ways. The Board of Directors has allocated some areas of focus to its committees and has retained some areas of focus for itself. The Board has primary responsibility for overall enterprise risk management as well as oversight of the company’sCompany’s strategic, operational, legal and regulatory and reputational risks. Key enterprise risks are identified by management. Board meetings regularly include strategic overviewsdiscussions, led by the CEO and CFO, that describe the most significant issues, including risks, affecting HSNi. Key enterprise risks are identified by management. HSNi’sIn addition, management’s plans to mitigate, manage and monitor these risks are periodically presented to the Board, of Directors, as are regular reports on the status of these efforts.

Our Audit Committee has primary responsibility for HSNi’s major financial risk exposuresrisks and the steps management has taken to monitor and control such exposures.risks. The Compensation Committee is responsible for risks related to compensation matters and for periodically reviewing incentive compensation arrangements to

confirm that the design of incentivesuch pay does not encourage unnecessary or excessive risk taking. The Governance Committee reviews risks related to legal and regulatory compliance as they relate to corporate governance structure and processes.

Ultimately, though, management is responsible for the day-to-day risk management process, including identification of key risks and implementation of policies and procedures to manage, mitigate and monitor risks. In fulfilling these duties, an Enterprise Risk Management Committee consisting of key members of management was formed to assist the Board in fulfilling its oversight responsibilities. The Enterprise Risk Management Committee and/or senior management report regularly to the Board and its committees on areas of material risk to the company.

Review and Approval of Related-Person Transactions

Under the Audit Committee’s charter, and consistent with NASDAQ rules, any material potential or actual conflict of interest or transaction between HSNi and any “related person” of HSNi must be reviewed and approved or ratified by the Audit Committee. SEC rules define a “related person” of HSNi as any HSNi director (or nominee), executive officer, 5%-or-greater shareholder or immediate family member of any of these persons.

In August 2008, our Board adopted a written Policy for the Review and Approval of Related-Person Transactions. The policy provides that any “related person” as defined above must notify the chair of the Audit Committee before becoming a party to, or engaging in, a potential related-person transaction that may require disclosure in our proxy statement under SEC rules, or if prior approval is not practicable, as soon as possible after engaging in the transaction. Based on current SEC rules, transactions covered by the policy include any individual or series of related transactions, arrangements or relationships (including but not limited to indebtedness or guarantees of indebtedness), whether actual or proposed in which:

The Audit Committee chair has the discretion to determine whether a transaction is or may be covered by the policy. If the chair determines that the transaction is covered by the policy, then the full Audit Committee must review and approve it. The Audit Committee’s decision is final and binding. Additionally, the Audit Committee chair has discretion to approve, disapprove or seek full Audit Committee review of any other transaction involving a related person (i.e., a transaction not otherwise required to be disclosed in the proxy statement).

In considering potential related-person transactions, the Audit Committee looks not only to SEC and NASDAQ rules, including the impact of a transaction on the independence of any director, but also to the consistency of the transaction with the best interests of HSNi and our shareholders. As the policy describes in more detail, the factors underlying these considerations include:

Succession Planning

The Board recognizes the importance of effective executive leadership to HSNi’s success and views succession planning, for the CEO as well as certain other key executive officers, as one of its primary responsibilities. Pursuant to our Corporate Governance Guidelines, the full Board has primary responsibility for developing succession plans for the CEO and key executive officers.

Each year, we conduct an annual review process that includes succession plans for our senior leadership positions. These succession plans are reviewed and approved by our CEO and details on these succession plans,

including potential successors for members of our executive team (including the CEO), are presented to the Board. In addition, the Board reviews and updates our CEO succession plan, which includes formal criteria for the CEO position used to evaluate potential successors, and addresses the possibility of an emergency situation. In conducting this review, the Board considers, among other factors, organizational and operational needs, competitive challenges, leadership/management potential and development, and emergency situations. The annual review is conducted in consultation with our Executive Vice President ofChief Human Resources.Resources Officer.

Director Compensation

General

The Governance Committee has primary responsibility for establishing director compensation arrangements, which are designed to provide competitive compensation necessary to attract and retain high quality non-employee directors and to encourage ownership of our stock to further align directors’ interests with those of our shareholders. When considering non-employee director compensation arrangements, our management will provide the Governance Committee with information regarding various types of non-employee director compensation arrangements and practices of selected peer companies.

In order to align the interests of our directors with those of our shareholders, a significant portion of the director fees are paid in the form of equity. Each non-employee director (other than Mr. Martinez)Martinez who received $350,000 in equity) received an equity award, with a dollar value of $100,000 upon his or her initial election to the Board of Directors and receives grants inDirectors. Non-employee directors (other than the same amount annually thereafter upon re-electionChairman of the Board) receive an equity retainer of $100,000 at our annual meetingAnnual Meeting of shareholders.Shareholders. The equity compensation is paid in the form of deferred stock units, or DSUs. The DSUs are payable in actual HSNi shares six months following termination of Board service. In addition, each non-employee member of our Board of Directors receives an annual cash retainer in the amount of $50,000, which is payable quarterly. Each member of the Audit Committee and Compensation Committee (including their respective chairs) receives an additional annual cash retainer in the amount of $10,000. Each member of the Governance Committee receives an additional annual cash retainer in the amount of $5,000. The chair of each of the Audit Committee and Compensation Committee receives an additional cash retainer in the amount of $20,000 and the chair of the Governance Committee receives an additional cash retainer in the amount of $15,000. HSNi does not compensate employees for service on the Board.

Mr. Martinez serves as Chairman of the Board. For his services as Chairman, Mr. Martinez is paid an annual retainer of $250,000 and an annual equity grant with a dollar value of $250,000. Mr. Martinez does not receive any additional compensation for his committee service.

Deferred Compensation Plan for Non-Employee Directors

Under our Deferred Compensation Plan for Non-Employee Directors, non-employee directors may defer all or a portion of their Board and committee cash compensation. Eligible directors who defer all or any portion of these fees can elect to have such fees applied to the purchase of share units, representing the number of shares of our common stock that could have been purchased on the relevant date, or credited to a cash fund. If any

dividends are paid on the common stock, dividend equivalents will be credited on the share units. The cash fund will be credited with deemed interest at an annual rate equal to the weighted average prime lending rate of JPMorgan Chase Bank. After a director ceases to serve as such, he or she will receive (i) with respect to share units, such number of shares of our common stock as the share units represent and (ii) with respect to the cash fund, a cash payment in an amount equal to deferred amounts, plus accrued interest. These payments will be made in either one lump sum or in up to five annual installments, as previously elected by the eligible director at the time of the related deferral election.

20112013 Director Compensation

The following table sets forth information for the fiscal year ended December 31, 20112013 regarding compensation of our non-employees directors:

Includes the impact of dividends paid on HSNi’s common stock through December 31, 2011 which were credited to the directors’ accounts as additional DSUs and share units and will be paid out as shares of HSNi common stock on the vesting date, subject to the same vesting restrictions as the underlying securities.

Report of the Audit Committee

Management is responsible for our internal controls and financial reporting process. Management is also responsible for the preparation of our consolidated financial statements in accordance with generally accepted accounting principles and applicable rules and regulations. Ernst & Young LLP, HSNi’s independent registered certified public accounting firm, is responsible for performing an independent audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board, or PCAOB, and an independent audit of our internal control over financial reporting and issuing reports thereon.

The Audit Committee serves as the representative of the Board of Directors and is responsible for overseeing the accounting and financial reporting processes of HSNi and the auditsgeneral oversight of HSNi’s financial statements.accounting and reporting, systems of internal control over financial reporting and audit processes. In that regard, the Audit Committee assists the Board in monitoring (1) the integrity of our financial statements; (2) the effectiveness of HSNi’s internal control over financial reporting, (3) the qualifications and independence of HSNi’s independent registered certified public accounting firm, (4) the performance of HSNi’s internal audit department and independent registered certified public accounting firm; and (5) compliance by HSNi with legal and regulatory requirements. The Committee is directly responsible for the appointment, (subject to shareholder ratification), compensation, retention, and oversight of the independent registered certified public accounting firm.

In fulfilling its obligations,this context, the Audit Committee met seven times in 20112013 and held discussions with management, the company’s internal auditor and Ernst & Young LLP, or E&Y, both collectively and independently. The Audit Committee has:

In addition, among other things, the Audit Committee (1) reviewed all related party transactions in accordance with HSNi’s formal written policy; (2) reviewed compliance with the procedures established by HSNi for the receipt, retention and treatment of complaints received by HSNi regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by companyCompany employees of concerns regarding accounting and auditing matters; (3) regularly discussed HSNi’s legal and regulatory environment, including specific legal and regulatory challenges; and (4) discussed with management HSNi’s major financial risks and the steps management has taken and will take to monitor and control such exposures.

In performance of its duties with respect to HSNi’s financial statements, the Audit Committee regularly met separately with E&Y, with and without management present, to discuss the results of their examinations, including the integrity, adequacy, and effectiveness of the accounting and financial reporting process and controls, and the overall quality of our financial reporting. In addition to discussing key areas, management, internal audit and E&Y also made presentations to the Audit Committee on specific topics of interest, including the audit process and methodology, SEC guidance and methodologies utilized by management for significant policies and accounting estimates.

The Audit Committee has reviewed and discussed the audited consolidated financial statements of HSNi for the fiscal year ended December 31, 2011 with management and E&Y. The Audit Committee also reviewed HSNi’s quarterly financial statements with management and E&Y. The committee discussed HSNi’s interim financial information contained in each quarterly earnings announcement with HSNi’s Chief Financial Officer, HSNi’s Chief Accounting Officer and E&Y prior to public release.

In addition, the committee reviewed and discussed HSNi’s compliance with the requirements of the Sarbanes-Oxley Act of 2002 with respect to internal control over financial reporting. The Audit Committee also reviewed and discussed, together with management and E&Y, the results of management’s assessment of the effectiveness of HSNi’s internal control over financial reporting and E&Y’s audit of internal control over financial reporting.

The Audit Committee has discussed with E&Y the matters required to be discussed under Public Company Accounting Oversight Board Auditing Standard AU Section 380, “Communication with Audit Committees.” The

Audit Committee has also received the written disclosures and the letter from E&Y required pursuant to Rule 3526 of the Public Company Accounting Oversight Board “Communication with the Audit Committees Concerning Independence,” and the Audit Committee has discussed with E&Y the firm’s independence. In addition, the Audit Committee considered whether the non-audit services provided by E&Y could impair its independence and concluded that such services would not.

Based on its review and the meetings, discussions and reports described above, and subject to the limitations of its role and responsibilities referred to above and in the Audit Committee Charter, the Audit Committee

recommended to the Board of Directors that the audited consolidated financial statements for HSN, Inc. for the fiscal year ended December 31, 20112013 be included in our Annual Report on Form 10-K for the year ended December 31, 20112013 to be filed with the SEC. The Annual Report on Form 10-K was filed with the SEC on February 20, 2014.

Members of the Audit Committee

James M. Follo (Chairman)

Michael C. Boyd

John B. Morse, Jr. (Chairman)

William Costello

James M. Follo

Thomas J. McInerney

Matthew E. Rubel

Compensation Committee Interlocks Insider Participation

None of the members of the Compensation Committee is, or was during the last completed fiscal year, an employee or officer of HSNi or a former employee of HSNi, nor did any of them have any relationship requiring disclosure under Item 404 of Regulation S-K under the Securities Exchange Act of 1934, or the Exchange Act. In addition, during the last completed fiscal year, none of our executive officers have served as a member of the board of directors or compensation committee of any other entity that has or has had one or more of its executive officers serving as a member of our Board or the Compensation Committee.

Report of the Compensation and Human Resources Committee

The Compensation and Human Resources Committee has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K promulgated by the SEC and set forth in this proxy statement. The Compensation Committee has reviewed and discussed with management the company’s incentive compensation arrangements to confirm that the design of incentive pay does not encourage unnecessary risk taking. Based upon its review and the discussions referred to above, the Compensation and Human Resources Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.

Members of the Compensation and Human Resources Committee

John B. Morse, Jr. (Chairman)

Patrick Bousquet-Chavanne

Stephanie Kugelman

MANAGEMENT

Executive officers are elected annually by the Board and serve at the discretion of the Board. Set forth below is information regarding our executive officers as of March 31, 2012.25, 2014.

Mindy Grossman’s biography is set forth under the heading “Proposal 1—Election of Directors.”

Judy A. Schmeling has served as Executive Vice President and Chief Financial Officer of HSNi since August 2008.2008 and as Chief Operating Officer since May 2013. Ms. Schmeling has held positions of increasing responsibility with HSN, one of HSNi’s two operating segments, since joining the companyCompany in September 1994. From February 2002 through August 2008, she served as Executive Vice President and Chief Financial Officer of HSN, when it was IAC Retailing. From November 1999 to February 2002, Ms. Schmeling served as Senior Vice President, Finance; from January 2001 to February 2002, served as Chief Operating Officer of HSN’s international operations and from January 1998 to November 1999, as Vice President, Strategic Planning and Analysis. Ms. Schmeling served as Director of Investor Relations and Operating Vice President, Finance of HSN from September 1994 to January 1998 during the time in which HSN was a separately traded public company. Prior to joining HSN, Ms. Schmeling was Managing Director of Tunstall Consulting, Inc., a corporate financial planning firm, from 1986 to 1994. Ms. Schmeling began her career at Deloitte & Touche, an international public accounting firm where she held various positions from 1982 to 1986.

Gregory J. Henchel has served as Executive Vice President, General Counsel and Secretary of HSNi since February 2010. Prior to joining HSNi, Mr. Henchel was Senior Vice President and General Counsel of Tween Brands, Inc., a specialty retailer, from October 2005 to February 2010 and served as the company’s Secretary from August 2008 to February 2010. From May 1998 to October 2005, Mr. Henchel served Cardinal Health, Inc., a global medical device, pharmaceutical and healthcare technology company. From 2001 to 2005, Mr. Henchel served as Assistant General Counsel of Cardinal Health and from 1998 to 2001, Mr. Henchel served as Senior Litigation Counsel. Prior to his service at Cardinal Health, Mr. Henchel was an associate with the law firm of Jones Day from September 1993 to May 1998. Mr. Henchel Ms. Schmeling also serves on the Board of Directors and as a member of the Electronic Retailing Association.Audit Committee of Constellation Brands, Inc., a premium wine, beer and spirits company.

William C. Brand has served as Chief Marketing and Business Development Officer of HSNi since March 2013. Prior to that, since joining the Company in 2006, Mr. Brand has held positions of increasing responsibility with HSN, one of HSNi’s two operating segments. Most recently, Mr. Brand served as Executive Vice President of Programming, Marketing and Business Development for HSN. Prior to joining HSN, from 2001 to 2006, Mr. Brand served as Senior Vice President of Reality Programming for Lifetime. Previously, Mr. Brand was Vice President of Programming and Production at VH1 for five years. Mr. Brand is a member of the board of directors of The Fashion Group International, Inc. and the National Retail Federation Foundation.

Lisa A. Letizio has served as Executive Vice President,Chief Human Resources Officer of HSNi since August 2008. In this capacity, Ms. Letizio oversees the Human Resources team for all of HSNi, which includes both the HSN and the Cornerstone operating segments. From 1998 and until August 2008, Ms. Letizio served as Executive Vice President, Human Resources of HSN and Cornerstone (since its acquisition in 2005). Previously, Ms. Letizio spent six years as Vice President of Human Resources for the Timberland Company, a company listed on the New York Stock Exchange and recognized as a global leader in the design and marketing of premium-quality footwear, apparel and accessories with approximately 6,000 full and part-time employees worldwide. Ms. Letizio is the Chairperson of the Board of Big Brothers Big Sisters of Pinellas County, Florida, and is a member of the Board of Women Executive Leadership in Florida.Florida and Secretary and Board member of St. Petersburg Art Alliance. On March 3, 2014, Ms. Letizio gave notice of her retirement from HSN, Inc., effective June 1, 2014. Ms. Letizio will continue to serve as Chief Human Resource Officer through the effective date.

Gregory J. Henchel has served as Chief Legal Officer and Secretary of HSNi since February 2010. Prior to joining HSNi, Mr. Henchel was Senior Vice President and General Counsel of Tween Brands, Inc., a specialty retailer, from October 2005 to February 2010 and served as the company’s Secretary from August 2008 to February 2010. From May 1998 to October 2005, Mr. Henchel held positions of increasing responsibility with

Cardinal Health, Inc., a global medical device, pharmaceutical and healthcare technology company. From 2001 to 2005, Mr. Henchel served as Assistant General Counsel of Cardinal Health and from 1998 to 2001, Mr. Henchel served as Senior Litigation Counsel. Prior to his service at Cardinal Health, Mr. Henchel was an associate with the law firm of Jones Day from September 1993 to May 1998. Mr. Henchel also served on the Board of Directors of the Electronic Retailing Association from 2010 to 2013.

There is no family relationship between any of the directors or executive officers of HSNi.

COMPENSATION DISCUSSION AND ANALYSIS

Overview

The Compensation Discussion and AnalysisIn this section, we describe the material components of this proxy statement discusses and analyzes theour executive compensation program foras it relates to our named executive officers, or NEOs. The Compensation Committee is responsible for reviewing and approving the design and overseeing the administration of our compensation programs. The Compensation Committee also reviews and approves the compensation and incentive opportunities for our “executive officers,” including NEOs. Our NEOs, as determined as of December 31, 20112013 under applicable SEC rules, are listed below.

Executive Summary

Alignment of Performance and Compensation

Our compensation programs are designed to, among other things; align compensation with our business objectives and performance. The Compensation Committee sets the applicable performance goals for our short-term and long-term incentive programs at the beginning of the fiscal year using challenging but realizable targets. These targets are based upon the financial plan approved by our Board of Directors. Our goal setting process is based on historical operating trends and requires improvement over prior year financial performance.

Given the pay for performance nature of our compensation structure, below are some highlights for our business and financial results for fiscal 2013:

Based on these results, fiscal 2013 was a successful year for HSNi with the Company achieving record net sales, adjusted EBITDA and earnings per share; however, HSNi’s results did fall slightly short of our plan. HSNi achieved 95.5% of its Adjusted EBITDA target in 2013. As a result of this performance, the portion of the Company’s short-term incentive program attributable to financial performance was funded at 77.7% of target.

Philosophy and Objectives

HSNi operates in the fast-paced and highly competitive retail environment. We areis committed to achieving long-term sustainable growth and increasing shareholder value. ToWe operate in the fast-paced and highly competitive retail environment so, to be successful, we must be able to attract and retain management that thrives in this environment. Our philosophy is to design executive compensation programs that will: (i) enable us to attract, retain and motivate talenttalented executives by providing executivecompetitive compensation with an appropriate mix of fixed and variable compensation, short-term and long-term incentives and cash and equity-based pay; (ii) reinforce our business objectives and performance for future periods by aligning compensation with key performance metrics; and (iii) align the interests of our executives and our shareholders by weighting a portion of executive compensation on financial performance metrics that will drive shareholder value and providing a significant portion of compensation in equity-based incentives.

Management and the Compensation Committee have worked with outside consultants to develop compensation programs that reward the culture, performance and behaviors that we believe will drive long-term success. Each year the Compensation Committee evaluates the programs, approves the performance measures and goals consistent with our business plan and objectives and approves the payments and awards to our NEOs based on HSNi’s and their individual performance.

The compensation programs were designed with the following objectives in mind:

HSNi’s compensation programs have also been designed with features that discourage executives from taking unnecessary risks that would threaten the health and viability of the company.Company. For our NEOs, at least 80% of the short-term incentive awards are based on company-wideCompany-wide or business unit financial performance. Payout schedules for the short-term incentive do not contain steep curves or cliffs. Long-term incentive compensation, which represents the most significant element of executive officer pay, is also based primarily on financial and stock performance and is designed to ensure that executives have a strong incentive to create shareholder value. The Company also requires executives to retain a significant amount of equity through share ownership guidelines, has a claw back policy and prohibits hedging transactions and short sales by executive officers or directors.

Say on Pay Vote

In our compensation review process, we consider, among other things, whether our compensation programs serve the best interests of our shareholders. In anticipation of the “say on pay” proposals included in the proxy statement related to our 2011 annual meeting of shareholders, we spoke with several of our institutional investors to solicit their views on our compensation programs. Over 83% of our shareholders who voted on the 2011our most recent advisory proposal on executive compensation (at the 2011 Annual Meeting) expressed approval of our executive compensation. Management regularly engages investors and solicits their views on our compensation programs. Our current compensation programs are materially the same as those approved at our 2011 Annual Meeting. However, in order to strengthen the relationship between pay and performance, since 2012, performance cash has been awarded based on the Company’s TSR over a three-year period relative to the TSR of companies listed in the Standard and Poor’s 500 Retail Index. In evaluating NEO compensation and our compensation programs, the Compensation Committee has considered the voting results from 2011, as well as feedback we receivedreceive from our investors on our compensation program as well as these voting results.programs. Based on the foregoing, we believe our programs are effectively designed and aligned with the interests of our shareholders. Based on our shareholders’ support of a triennial, or three year, vote on executive compensation, the nextIncluded as Proposal 2 in this proxy statement is an advisory vote on executive compensation will be held in 2014.

Alignment of Performance and Compensation

Among other things, our compensation programs are designed to align compensation with our business objectives and performance. The Compensation Committee sets the applicable performance goals for our short-term and long-term incentive programs at the beginning of the fiscal year using challenging but realizable targets. These targets are based upon the financial plan approved by our Board of Directors. Our goal setting process is based on historical operating trends and requires improvement over prior financial performance.

Our current executive team has successfully managed the company through challenging economic times. Some highlights for fiscal 2011 include the following:

Based on these results, the company performed well when measured against its peers. As a result of this performance, the portion of the company’s short-term incentive program attributable to financial performance was funded at 120% of target and the portion of the company’s long-term incentive program attributable to financial performance, i.e. the performance cash component, was funded at 141% of target.compensation.

Peer Group

The Compensation Committee believes that, in order to attract and retain talent, it is necessary to consider market data when making compensation decisions. TheEach year the Compensation Committee also recognizes that atreviews the peer group used for comparison to our named executive level, we compete for talent against larger global companies. As a result,officer compensation opportunities. In 2013, the Compensation Committee engaged its independent compensation consultant to assist in 2008, we utilized Towers Watson, formerly known as Towers Perrin, to create a list of reference companies from which we recruit talent and to evaluate our forms of compensation relative to those companies.reviewing the Company’s peer group.

Our business model is somewhat unique. We combine traditional retail with entertaining and informative content which we deliver through innovative technology systems, all in an effort to driveenhance retail experiences. As a result, our peer group of companies consists of publicly-traded companies in twothe following industries: technologyinternet and catalog retail, media, multiline retail and specialty retail. Factors generally considered in deciding whether a company should be included in the peer group include:

The updated peer group is the company for executive talent.

result of six deletions and four additions. The following is a complete list oftable details the changes and the resulting peer companies we consideredgroup for 2011:2013:

To ensure that this peer group continues to reflect companies comparable to HSNi and from which we compete for executive talent, the Compensation Committee reviews the peer group annually.

In February 2012, when the Compensation Committee conducted its annual review ofreviewing the peer group, the Compensation Committee determined it was appropriate to make the following changes:

Wefactors listed above. While we compete with many companies that are much larger in size. As a result, many ofsize, in determining companies to add or remove from the companies in our peer group, are much larger, in terms of revenue and market capitalization, than we are. As noted above, size is but one factor we consider in deciding whetherwas a company should be included in the peer group.significant consideration. To the extent that peer group data is used, we take into account variance in size among the companies and, historically, Towers Watson has assisted us in preparing a regression analysis that adjusts the compensation data for differences in revenue.companies.

The Compensation Committee periodically reviews the compensation practices at these peer companies to inform the committee’s decision-making processCommittee’s decisions and to assist in setting total compensation levels that it believes are reasonably competitive.competitive as compared to a range around the market median. Although the practices at the other companies represent useful guidelines, the Compensation Committee does not rely solely on the peer group data in making its individual compensation determinations. Rather, the Compensation Committee also takes into account various factors such as ourindividual performance, within the peer group, the unique characteristics of the individual’s position, internal equity and any succession and retention considerations. The Compensation Committee exercises discretion in setting individual executive compensation packages so that they appropriately reflect the value and expected contributions of each executive.

Roles and Responsibilities

The Compensation Committee

The Compensation Committee was appointed by the Board of Directors to exercise all powers of the Board with respect to matters pertaining to compensation and benefits, including but not limited to, incentive/bonus plans, stock compensation plans, retirement programs and insurance plans and salary matters relating to our executive officers. Pursuant to its Charter, the Compensation Committee’s primary responsibilities include:

The Compensation Committee also determines the compensation of the CEO without management input, but is assisted in this determination by its independent compensation consultant (as described below). In making its determinations regarding the compensation for the other NEOs, the Compensation Committee considers the recommendations of the CEO, the Chief Human Resources Officer (except with respect to her own compensation) and input received from its independent compensation consultant. The Compensation Committee reviews its determinations with the Board of Directors (without management present).

The Compensation Committee meets regularly in executive session, both with and without management present, to discuss compensation decisions and matters relating to the design and operation of the executive compensation programs.

Management

Senior management, led by our Executive Vice President ofChief Human Resources Officer, generally recommends compensation programs applicable to all executive officers, including the CEO, and presents these to the Compensation Committee for review, comment and approval. With respect to the compensation for our NEOs, the Compensation Committee may seek input from outside advisors. In that case, our Executive Vice President ofOur Chief Human Resources facilitates communication between the committee and the outside advisors. Our Executive Vice President of Human ResourcesOfficer also plays an active role in determining new executive officers’ total compensation as well as recommendations for annual compensation reviews. Recommendations are presented to the Compensation Committee for final approval. Our CEO, Chief Financial Officer, Executive Vice President of Human Resources and General Counsel regularly attend the Compensation Committee’s meetings to provide perspectives on the competitive landscape, the needs of the business, information regarding HSNi’s performance, as well as legal and technical advice; however, NEOs are not permitted to participate in the discussions regarding their own specific compensation.

Our CEO generally plays an advisory role to the Compensation Committee during this process. Our CEO works with our Executive Vice President ofChief Human Resources Officer and Chief Financial Officer to assist the Compensation Committee in establishing company-wide compensation programs, including the structure of bonus and equity programs, and in establishing appropriate company-wide bonus and equity pools. At year-end, the CEO meets with the Chairman of the Board and the Compensation Committee and discusses her views of corporate and individual executive officer performance for the prior year for purposes of determining whether individual executive officers other than her have met or exceeded expectations with respect to the individual performance component of executivetheir short-term incentive compensation. The CEO, Chairman of the Board and the Compensation Committee discuss each individual recommendation. Following such discussion, the Compensation Committee and Chairman of the Board typically meet without the CEO and discuss the CEO’s recommendations, the CEO’s compensation and any information provided concerning peer group comparisons and industry trends and makes the ultimate compensation decisions. However, the CEO does not participate in deliberations or voting regarding her compensation.

Our CEO, Chief Financial Officer, Chief Human Resources Officer and Chief Legal Officer regularly attend the Compensation Committee’s meetings to, among other things:

NEOs are not permitted to participate in the discussions regarding their own specific compensation.

Use of Outside AdvisorsCompensation Consultants

Towers Watson is a leading global professional services company with particular expertise in executive compensation matters. HSNi first engaged Towers Watson in 2008 to assist in the development of its short-term and long-term incentive programs. In 2010, the Compensation Committee also engaged Frederic W. Cook & Co., Inc., or FWC, a nationally recognized consulting firm focusing on compensation plan designs, as its independent advisor. In 2011, HSNi utilized Towers Watson to assist in the evaluation of executive compensation. In 2011, the Compensation Committee utilized FWC to review the company’s long-term incentive program.

Pursuant to the Compensation Committee charter, the Compensation Committee has sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of executive officer compensation and has sole authority to approve the terms and conditions of the consultant’s retention and the consultant’s compensation. In compliance with its charter, in 2013, the Committee continued to utilize the firm of Frederic W. Cook & Co., Inc., or FWC, a nationally recognized consulting firm, as its independent advisor to assist in its ongoing development and evaluation of compensation programs and practices as well as the Company’s executive compensation arrangement with the Company’s CEO.

Specifically, a representative of FWC:

The Compensation Committee considers input from FWC as one factor in making decisions with respect to compensation matters, along with information and analysis it receives from management and its own judgment and experience.

The Compensation Committee has adopted a policy requiring its consultants to be independent of the Company’s management. The Committee performs an annual assessment of the consultant’s independence to determine whether the consultant is independent. The Committee assessed the independence of FWC in February 2013 and February 2014 and confirmed on both occasions that the firm’s work has not raised any conflict of interest and that the firm was independent.

In compliance with its charter, the committee approved the engagement of Towers Watson and FWC and approved the fees paid to these consultantsFWC for work completed prior to December 31, 2011.2013. In 2011,2013, payments to Towers Watson and FWC did not exceed $120,000, individually or in the aggregate.$120,000.

Elements of Compensation

The key elements of HSNi’s compensation program are base salary, short-term incentive compensation in the form of annual bonuses and long-term incentive compensation in the form of equity awards and performance cash.

The compensation program also includes some minor perquisites and benefits but these are not significant elements of compensation. Prior to making specific decisions related to compensation, we determine which element or combinationEach of the different elements of compensation elements could be used most effectivelyis designed to further our compensationachieve certain objectives.

The following table outlines our objectives for each of the principal components of executive compensation:

A significantmeaningful portion of the compensation program for our executive officers is variable.variable and over half of it is performance based. This means that it is contingent upon the companyCompany and the individual achieving specific results that are essential to our long-term success and growth in shareholder value. The Compensation Committee has not established a specific formula for the allocation of fixed and variable compensation components. In general, though, a large percentagethe majority of executive officers’ compensation is variable, with the CEO having the largest percentage of variable compensation. The Compensation Committee believes this approach directly aligns the interests of our executive officers with those of our shareholders.

Types of Awards

Under our stock and annual incentive plan, the Compensation Committee may grant a variety of long-term incentive vehicles, including RSUs, SARs, performance cash and stock options. Followingvehicles. The following is a general description of each of these vehicles.the vehicles we used in 2013.

Restricted Stock Units. RSUs are a promise to issue shares of our common stock in the future provided the recipient remains employed with us through the award’s vesting period. RSU awards generally cliff vest over a three-year period or ratably vest over a five-year period. Unvested RSUs are generally forfeited upon termination of employment. As a result, RSUs are intended to retain key employees, including the NEOs. RSUsNEOs, and align their interests with shareholders.

Market Stock Units. MSUs are a promise to issue shares of our common stock in the future, subject to the Company’s achievement of a performance target as determined by the Compensation Committee. In general, if the performance target is met, the actual number of MSUs that will vest on each vest date will be based on the ratio of the fair market value of the Company’s common stock on the vest date to the grant date price. The number of MSUs that can vest is subject to a maximum and no shares will vest if the fair market value on the vest date is less than a specified percentage of the grant date price. For purposes of the MSU, “fair market value” is defined as the 20-trading day average closing price of the Company’s common stock up to and including the grant date and/or each of the vesting dates. As a result, MSUs are intended to retain key executives and provide a reward and incentive for increasing the opportunity for capital accumulation and long-term incentive value.Company’s stock price over the mid-to-long term.

Stock Appreciation Rights. SARs are similar to traditional stock options except, upon exercise,exercise; holders of SARs will only receive a value equal to the spread between the current market price per share of our common stock and the exercise price. As a result, SARs reward participants for long-term appreciation in HSNi’s stock price. Although the SARs are given a value at the date of grant for financial reporting purposes, the actual value of the SARs to the

participant is entirely based on future increases in our stock price. If the stock price does not increase over the term of the SAR, the participant receives no value. Upon exercise of SARs, payment may be made, in the sole discretion of HSNi, in cash or shares of HSNi common stock. ManagementThe Company has indicated it will likely settle these awards in shares of our common stock.stock and has historically done so. The exercise price for awards granted under the Plan is required to be priced at, or above, the fair market value of our common stock at the date of grant. Awards typically vest ratably annually over a three-year period and can be exercised over a ten-year term.

Performance Cash. An award of performance cash is typicallywas previously based on the company’sCompany’s achievement of a specific financial metric in the performance period but paid thereafter, assuming the recipient remains employed with the companyCompany through the award’s vesting period. In 2011, awards ofSince 2012, performance cash vested in fullhas been awarded based on the second anniversaryCompany’s TSR over a three-year period relative to the TSR of companies listed in the expiration of the one-year performance period. In 2012, awards of performanceStandard and Poor’s 500 Retail Index. Performance cash will vest and be payable at the end of the three-year performance period, assuming certain minimum performance thresholds are attained.

Stock Options. Options reward participants for long-term appreciation in HSNi’s stock price. Although the options are given a value at the date of grant for financial reporting purposes, the actual value of the options to the participant is entirely based on future increases in our stock price. If the stock price does not increase over the term of the option, the participant receives no value. Stock options were utilized by the company’s former parent company prior to the spin-off and, on a limited basis, by HSNi shortly after the spin-off. We do not currently issue stock options as part of our short-term or long-term incentive programs; however, we have done so in the past and may do so in the future if appropriate.period.

Salary

Base salary is the fixed portion of executive pay and is set to compensate individuals for their expected day-to-day performance. Salary is the most fundamental of all our compensation program elements. Providing a competitive salary to our executives is essential to achieving our objective of attracting and retaining talent.

HSNi negotiates a new executive officer’s starting salary upon arrival, typically based on the executive’s prior compensation history, HSNi’s prior compensation levels for the particular position, salary levels of other executives within HSNi, salary levels available to the individual in alternative opportunities, reference to certain survey information and the extent to which HSNi desires to secure the executive’s services. Once established, salaries can increase based on the assumption of additional responsibilities, internal equity, periodic market checks and other factors which demonstrate an executive’s increased value to HSNi. Our strategy for base salary is to generally target annual base salary of each of our executive officers at median levels relative to our peer group or market data, although individual officer salaries may be above or below those targets based on the factors described above.

The Compensation Committee annually reviews and approves the compensation package of each NEO. The Compensation Committee considers an individual’s qualifications and experience in setting our executives’ initial base salary, including those executive officers who are hired from the outside and those who are promoted from within. In determining base salary amounts and increases, the Compensation Committee considers the size and responsibility of the individual’s position, the business unit’s overall performance, the individual’s overall performance and future potential and the base salaries and merit increases paid by competitors to employees in comparable positions. Our strategy for base salary is to generally target the annual base salary of each of our executive officers at median levels relative to our peer group or market data, although individual officer salaries may be above or below those targets based on the factors described above.

Short-Term Incentive Program

Our short-term incentive program, or STIP, is designed primarily to reward achievement of our annual operating plan and is payable in the form of annual cash bonuses. The STIP is provided for and administered under our stock and annual incentive plan,the Plan, which was approved by our shareholders. The amount payable each year is based on the extent to which certain pre-established performance goals are achieved during the year and is “variable” because the companyCompany must achieve certain performance goals established by the Compensation Committee for the executive officers to receive an annual incentive bonus. Thisbonus, with the amount of bonus based on the extent to which the goals are achieved. The short-term incentive program is designed to motivate our executive officers to continuously improve company performance.Company performance by requiring a year-over-year improvement in the performance metric to receive a payout under the STIP. The program aligns a portion of executive compensation with key business and financial targets and, as a result, provides a valuable link between compensation and creation of shareholder value. Due to its variable nature, and because in any given year bonuses have the potential to make up a significant portion of an executive officer’s total compensation, the bonus program provides an important incentive tool to achieve our annual performance objectives.

HSNi awards annual bonuses based primarily on the achievement of specific financial performance goals. According to our stock and annual incentive plan,Under the Plan, performance goals may be based on a wide variety of business metrics. The Compensation Committee has determined that the annual performance bonus for our NEOs (other than the CEO) will be based on Adjusted EBITDA and individual performance. For our CEO, the annual performance bonus will be based entirely on Adjusted EBITDA. For purposes of this program, Adjusted EBITDA is defined as operating income according to the company’s consolidated statement of operations

excluding, if applicable: (1) stock-based compensation expense, and amortization of non-cash marketing, (2) amortization of intangible assets, (3) depreciation and related gains and losses on

asset dispositions, (4) goodwill, long-lived asset and intangible asset impairments, (5) pro forma adjustments for significant acquisitions, and (6) one-timeother significant items. Significant items may vary from period to period but typically are items that are both significant in amount and were either unexpected or unplanned.

The Compensation Committee determined this performance metric was appropriate since most executives have influence over Adjusted EBITDA. IndividualFor the NEOs, individual performance is also based, in part, on the achievement of the Adjusted EBITDA target established by the Compensation Committee. Notwithstanding the extent to which HSNi achieves the Adjusted EBITDA target, all payments under the STIP are subject to the ability of the Compensation Committee to exercise negative discretion and adjust the STIP amounts downward.

The short-term incentive program target and performance measures for each of our NEOs are as described in the table below.

The performance measures, performance ranges and corresponding payout levels are described in detail in the table below. For the year ended December 31, 2010, the threshold performance range was the prior year’s actual Adjusted EBITDA and the payout at that level was 50%; however, for the year ended December 31, 2011, the Compensation Committee reduced the payout at threshold to 25% in order to create more economic incentive for management to achieve a performance range of target or higher.

In order for any short-term incentive compensation to be earned, the financial performance measure must be (i) achieved at a threshold level equal toand (ii) an improvement over prior year actual.year’s performance. No payments under the STIP will be made unless HSNi achieves this threshold level of performance.

In 2013, the Compensation Committee set the threshold for payment at 85% of the Adjusted EBITDA target and the payout at threshold at 25% of STIP target. The maximum payout of 200% of target requires achievement of 120% of the Adjusted EBITDA target. The STIP was designed this way in order to create more financial incentive for management to achieve a performance range of target or higher.

With respect to the individual performance measure, as shown above, payments will be made based on the extent to which HSNi has achieved the Adjusted EBITDA performance measure. No payment shall be made for the individual performance measure unless HSNi achieves the threshold for Adjusted EBITDA. In addition, an annual evaluation will be conducted for each of the NEOs (other than the CEO), pursuant to which the executives

are assigned an annual performance rating of 1 through 5. Any executive receiving a rating of 1 (unsatisfactory) will not be eligible for any STIP payment regardless of the achievement of the financial performance goals. Any executive receiving a rating of 2 (inconsistent) will have his or her entire STIP bonus reduced by 50%. All payments under the STIP are subject to the Compensation Committee’s ability to apply negative discretion and reduce the pay out,payout, as appropriate. All payments under the short-term incentive program are also contingent upon the NEO being employed by HSNi on the date payment is made.

Long-Term Incentive Program

HSNiThe Compensation Committee believes that stock ownership shapes behavior and that bybehavior. By providing a meaningful portion of an executive officer’s compensation in stock-based compensation, an executive’s interests are aligned with the shareholders’ interests in a manner that drives better performance over time. In establishing this program and setting goals and award levels, theThe other predominant objective is to provide the participant with effective retention incentives by granting awards with long-term cliff-vesting.vesting.

Appropriate grantGrant levels to meet theseof each component of the long-term incentive program or LTIP goals may vary from year to year and from individual to individual, based on a variety of factors. The Compensation Committee determines the award opportunity level for each executive officer based on the individual’s responsibility level and potential within our company,Company, competitive practices, the number of shares available for grant, individual and companyCompany performance and the market price for our common stock.

HSNi’s long-term incentive program, or LTIP, uses a combination of three components to deliver long-term incentives: stock appreciation rights, or SARs, restricted stock units, or RSUs, and performance cash. Ms. Grossman’s annual long-term incentive compensation is paidgrants have historically been entirely in the form of SARs. Beginning in 2014, however, her awards will be allocated in a similar manner as those for the other executive officers. For 2013, long term incentives were delivered as follows:

The Compensation Committee approved the target percentage and components of long-term compensation after consultation with management and the Committee’s compensation consultant and review of executive compensation for those companies within the Company’s peer group. The Compensation Committee believes that these target levels are consistent with the Company’s philosophy of developing compensation programs that will, among other things, attract, retain and motivate talent while aligning officers’ interests with shareholders.

SARs and RSUs are generally issued at the beginning of the performance year. The number of SARs and RSUs awarded is not contingent upon the achievement of any performance metric but, instead, isyear, typically in February based on a target percentage of base salary. The exercise price of the SARsSAR is the fair market value of our common stock on the date of grant. The SARs will vest ratably annually over a three-year term and expire ten years from the date of grant. Upon exercise of SARs, payment may be made, in the sole discretion of HSNi, in cash or shares of HSNi common stock. ManagementThe Compensation Committee has indicated it currently will likely settle these awards in shares of HSNi common stock.stock and has historically done so. RSUs will vest in full on the third anniversary of the date of grant. Executives generally must be continuously employed by HSNi during the performance period in order to be eligible for vesting of SARs and RSUs.

The target value and performance goals for performance cash awards are also set at the beginning of the performance period. For fiscal 2011,Since 2012, the Compensation Committee has utilized HSNi’s TSR relative to the Standard and Poor’s 500 Retail Index over a three year period as the performance metric for the performance cash

component. The Committee believes this closely aligns executive awards with shareholder value creation and reinforces management’s emphasis on long-term performance. The performance cash was awarded subjectpayout level will be determined based on the percentile ranking of the Company’s TSR relative to the achievementTSR of a one-year adjusted earnings per share, or Adjusted EPS, target and vests two years after the endcomparator companies over the course of the performance period providedperiod. The Company must achieve the executive55^th percentile performance relative to the comparator group for a target payout. For each one percentile below the target performance level, the payout is still employedreduced by HSNi. For3.33% and for each one percentile above target performance level, the payout is increased by 5.0%, subject to a maximum payout of 200%. The actual dollar value of the threshold, target and maximum award opportunities are reflected in the Grants of Plan Based Awards table. Solely for purposes of this program, Adjusted EPSillustration, if the Company’s TSR ranking is defined as Adjusted Net Income (as defined below) divided by diluted weighted average shares outstanding for Adjusted EPS purposes. Adjusted Net Income generally captures all items onin the statement60^th percentile (i.e., 60% of operations that have been,the comparator companies achieved TSR rankings at or ultimately will be, settled in cash and is defined as net income available to common shareholders excluding, net of tax effects, if applicable: (1) stock-based compensation expense and amortization of non-cash marketing, (2) amortization of intangible assets, (3) gains and losses on asset dispositions, (4) goodwill, long-lived asset and intangible asset impairments, (5) pro forma adjustments for significant acquisitions, and (6) one-time items and discontinued operations.

The performance measure, performance ranges and corresponding payout levels forbelow the Company’s TSR ranking), the performance cash are described below. For the year ended December 31, 2011, the threshold performance range was 90.1% of target to make achievement of this goal more challenging.

payout level would be 125.0%. Executives generally must be continuously employed by HSNi during the performance period in order to be eligible for payment.

Retirement Benefits

All executive officers are permitted to participate in the Company’s tax-qualified defined contribution plans. The tax qualified plan allows all employees including executives to defer a specified portion of their salary and provides for a company match of 50 cents of each dollar contributed to the plan up to 6% of salary or the statutory maximum, whichever is less. In addition, beginning in 2014, all executive officers are eligible to participate in the Company’s non qualified deferred compensation plan which permits executives to defer salary and bonus into one or more measurement funds. Deferrals will be set aside and held in trust to secure benefits. However, plan assets are subject to the claims of the Company’s creditors in the event of a “change in control” an executive may be entitled to performance cash, under certain circumstances. If the change in control occurs before the completion of both the performance period and the vesting period, the participant shall be paid the present value of the performance cash award at the target value, with such payment being made as soon as practicable following the change in control.

For purposes of fiscal 2012, the Compensation Committee made certain changes to HSNi’s long-term incentive program, replacing the performance metric for the performance cash component from Adjusted EPS to relative total shareholder return. The Compensation Committee also lengthened the performance period from one year to three years. The Compensation Committee did this following a comprehensive study of the long-term incentive program, in order to more closely align executive awards with shareholder value creation and in order to reinforce management’s emphasis on long-term performance. These changes became effective for the fiscal year which began January 1, 2012.insolvency.

Summary

AsA significant portion of the executive officers’ compensation is performance-based compensation as a result of the long-term incentive compensation and short-term incentive compensation programs, a significant portion of the executive officers’ compensation is weighted towards variable compensation.programs. The Compensation Committee believes that allocation of a significantmeaningful portion of total compensation to variable compensation and the majority of it being performance based as well as balancing multiple award types, encourages our executives to (i) take appropriate risks aimed at improving companyCompany performance, and building(ii) build long-term shareholder, value as well as encourages our executives toand (iii) remain committed to the growth of our organization for the long-term.

Other Compensation

We provide certain executive officers with perquisites and other personal benefits that the Compensation Committee believes are reasonable and consistent with industry norms and position levels. These personal benefits do not have a relationship to other compensation levels. They are provided in order to enable us to attract and retain these executives. The Compensation Committee periodically reviews the levels of these benefits provided to our executive officers.

Under limited circumstances, our executive officers have received non-cash and non-equity compensatory benefits. The values of these benefits are reported under the heading “Other Annual Compensation” in this proxy statement pursuant to applicable rules, and are generally considered in determining overall compensation levels.rules.

Post-Termination Compensation and Benefits

We believe that a strong, experienced management team is essential and in the best interests of HSNi and its shareholders. In addition, we recognize that the possibility of a change in control could arise and that such an event could result in the departure of the NEOs to the detriment of HSNi and its shareholders. As a result, we adopted a Named Executive Officer and Executive Vice President Severance Plan applicable to certain executives. The plan formalizes and standardizes our severance practices for our most senior executive officers and was adopted in lieu of issuing new employment agreements. The plan applies to all “NEOs” excluding Ms. Grossman who has a severance arrangement pursuant to her employment agreement. Adoption of the severance plan was approved by the Compensation Committee. Please refer to the section entitled “Payments Upon Termination or Change ofin Control” for specific details regarding post-termination compensation and benefits.

Executives covered by the severance plan will generally be eligible to receive severance benefits in the event of a termination by the companyCompany without Cause or by the executive for Good Reason. The severance

benefits increase if the termination is within 12 months following a Change in Control.Change-in-Control. Each of these capitalized terms areis defined in the severance plan and in the “Executive Compensation-Payments Upon Termination or Change ofin Control” section of this Proxy Statement.

Vesting of Awards Upon Change-in-Control

The Compensation Committee determined to include double-trigger change-in-control provisions in each of the equity award agreements. Upon a change-in-control and following a termination of employment for other than causeCause within one year offollowing the change-in-control, the unvested portion of the outstanding RSU, SAR and option awards will

vest. The purpose of this accelerated vestingprovision is to ensure that we retain our NEOs prior to and through a change-in-control. Notwithstanding

With respect to the foregoing,MSU award to Ms. Grossman, after a change-in-control if the CEO’s employment agreement providesaward is assumed, it will be converted into that number of shares of restricted stock equal to the number of MSUs multiplied by the price paid by the acquirer for the Company’s common stock divided by the grant date fair market value. If the award is not assumed, it will be converted into an amount in cash equal to the fair market value of the number of shares determined in a manner set forth in the previous sentence and paid out following the change-in-control.

With respect to cash awards, after a change- in-control, an executive may be entitled to payments of unvested performance cash awards, under certain equity awards, granted prior tocircumstances. If the change- in-control occurs before the completion of both the performance period and the vesting period, the participant shall be paid the present value of the performance cash award at the target value, with such payment being made as soon as practicable following the change-in-control.

For a complete discussion of the impact of a change-in-control, please see the “Executive Compensation-Payments Upon Termination or simultaneously with the spin-off, will vest upon a change in control, without a corresponding terminationChange of employment.Control” section of this Proxy Statement

Impact of Tax and Accounting Issues

The Compensation Committee also considers and evaluates the impact of applicable tax laws with respect to compensation paid under our plans, arrangements and agreements.

For instance, with certain exceptions, Section 162(m) of the IRS Code limits our deduction for compensation in excess of $1 million paid to certain covered employees (generally our NEOs). Compensation paid to covered employees is not subject to the deduction limitation if it is considered “qualified performance-based compensation” within the meaning of Section 162(m). While the Compensation Committee generally intends to structure and administer our Planplans and the related programs so as to not be subject to the deduction limit of Section 162(m),that all compensation is deductible, the Compensation Committee may from time to time, approve payments that cannot be deducted in order to maintain flexibility in structuring appropriate compensation programs and remain competitive in the marketplace. As a way to mitigate this, there is no individual performance component to calculating the CEO’s short-term incentive compensation and for the other NEOs, each of whom does have an individual performance component for their short-term incentive compensation, the individual performance component is calculated entirely based upon achievement of the financial performance metric.compensation.

For the year ended December 31, 2011,2013, approximately $3.2$1.1 million of compensation expense will be non-deductible under Section 162(m) of the IRS Code. This relates to compensation arrangements entered into with, and awards granted to, our CEO. The companyCompany works with the Compensation Committee to evaluate whether compensation arrangements will be structured and administered so as to not be subject to the deduction limit of Section 162(m).

20112013 Compensation Actions

Following is a summary of the key decisions relating to executive compensation in 2011. Some of these decisions were made independently by the Compensation Committee; others were made with the advice of HSNi’s Executive Vice President of Human Resources, CEO and/or the advice of HSNi’s independent compensation consultants.

In February 2011,2013, in connection with its annual review of base salaries, the Compensation Committee approved a change to the STIP which reducedfollowing base salary increases based on the amountCEO’s assessment of payout at threshold from 50% of target to 25% of target,the executives’ performance and in order to create more economic incentivealign our NEOs’ salaries with salaries for management to achieve aexecutives in comparable positions in our comparator group companies and, in the case of Mr. Brand, in recognition of exceptional performance range of target or higher.and additional responsibilities assumed:

The Compensation Committee also determined todid not increase theMs. Grossman’s base salary for 2013 and her salary has not been increased since 2010. Ms. Grossman’s target short term and long-term grant opportunity was last increased in February of Ms. Letizio from $350,000 to $375,000, effective February 2011. This change was made in recognition of the importance of Ms. Letizio’s ongoing contributions to the company and to align her compensation with compensation paid to comparable executives at her level and with her scope of responsibilities.

2010. The Compensation Committee undertook a detailed review of the CEO’s compensation opportunity during 2013 and, in light of the market data, the CEO’s performance, the performance of the Company under her leadership and the Committee’s desire to retain the CEO and motivate her over the next three- to five-year period to drive shareholder value, the Compensation Committee determined to:

20112013 Compensation Results

For purposes of the 20112013 fiscal year STIP, the Compensation Committee established a target of $352.0 million for Adjusted EBITDA. HSNi exceededHowever, management increased its 2013 plan to $353.7 million as a result of specific efforts to decrease costs. Management recommended and the Compensation Committee agreed to increase the Adjusted EBITDA performance target established.to $353.7 million for the 2013 performance period to match the revised plan. HSNi’s Adjusted EBITDA for 2013 exceeded Adjusted EBITDA performance for 2012; actual Adjusted EBITDA was $337.9 million or 95.5% of the increased performance target resulting in a 77.7% payout. The CEO also conducted annual performance evaluations for each of the other NEOs and assigned an annual performance rating to each such executive. The CEO reported the results of the company’sCompany’s achievement of the financial metric and the individual evaluations along with the calculations of the STIP based on such results to the Compensation

Committee, which has ultimate responsibility for approving the final bonus amounts to be paid to each of the NEOs. The Compensation Committee, in executive session, discussed HSNi’s performance relative to the financial performance metric established and the individual performance of the NEOs, including the CEO, and made the final decisions regarding short-term incentive compensation for the NEOs.

The annual performance bonuses paid to our NEOs for the year ended December 31, 20112013 in the context of the target and maximum payout and actual award, are describedshown in detail below.

Of the three components of long-term incentive compensation, the SARs and RSUs are issued at the beginning of the performance year. The third component, performance cash, was awarded based on achievement of a one-year Adjusted EPS goal established by the Compensation Committee. HSNi exceeded the targeted Adjusted EPS performance goal established by the Compensation Committee for purposes of the performance year ended December 31, 2011. As a result, in connection with the 2011 LTIP, performance cash awards were granted to each of our NEOs (other than our CEO who received long-term incentive compensation solely in the form of SARs) as more specifically described below. Such awards do not vest and payout for an additional two years.

The Compensation Committee believesconcluded that the actual degree of achievement of both financialthe performance metrics, which in both cases exceeded target,metric represents exceptionalgood performance in challenging timesa year that continued to be challenged and that the payment of the cash bonuses at these levelsthis level is consistent with the results of such performance.

Long-term compensation consists of both equity and cash awards. The ultimate value of equity component is directly related to the Company’s stock price.

All of the NEOs other than Ms. Grossman participated in the cash LTIP which vested on December 31, 2013. The cash component of the LTIP which vested on December 31, 2013 was awarded in 2011 subject to the achievement of a one-year adjusted earnings per share, or Adjusted EPS, target for fiscal 2011 and vested two years after the end of the performance period provided the executive was still employed by the Company. For 2011, the Adjusted EPS Target was $2.19. For the 2011 one year performance period, the Company achieved Adjusted EPS of $2.37 which resulted in a payout between Target and Maximum and was included in the 2011 line of the Summary Compensation Table in the Non-Equity Incentive Plan Compensation column.

In February 2013, the Compensation Committee granted all NEOs other than Ms. Grossman a long-term cash award tied to HSNi’s TSR relative to the Standard and Poor’s 500 Retail Index over a three year period. The threshold, target and maximum award opportunities for each NEO are reflected in the Grants of Plan Based Awards Table. The performance cash payout level will be determined based on percentile ranking of the Company’s TSR relative to the TSR of the comparator companies over the course of the performance period. The

payout, if any, of the 2013 long-term performance cash award will be reflected in the Summary Compensation Table under the column, Non-Equity Incentive Plan Compensation with the compensation for 2015.

The Compensation Committee also believes that the overall compensation of HSNi’s NEOs is aligned with the Company’s performance, is competitive in comparison to HSNi’s peers, and is consistent with our corporatecompensation philosophy and allows us to achieve all of the objectives for which the compensation programs are designed.

Stock Ownership Guidelines

In 2012, the Compensation Committee adopted executive stock ownership guidelines applicable to the Company’s executive officers in order to emphasize the importance of aligning the executives’ long-term financial interests with those of the Company’s shareholders. Executive officers of the Company are expected to hold stock in the Company equal in value to the lesser of (i) a fixed number of shares, and (ii) a multiple of his or her annual base salary, with ownership targets increasing with the level of responsibility.

Following are the guidelines for HSNi’s NEOs:

Executive officers will have five years from the later of (i) the date they were first appointed as an executive officer of the Company, or (ii)  the date the Board of Directors adopted these guidelines to attain the ownership threshold.

Report of the Compensation and Human Resources Committee

The following Report of the Compensation and Human Resources Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Exchange Act, except to the extent the Company specifically incorporates this Report by reference therein.

The Compensation and Human Resources Committee has reviewed and discussed with management the Compensation Discussion and Analysis set forth in this proxy statement. Based upon its review and the discussions held, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into HSNi’s annual report.

Members of the Compensation and Human Resources Committee

James M. Follo (Chairman)

Stephanie Kugelman

John B. Morse, Jr.

Ann Sarnoff

EXECUTIVE COMPENSATION

Summary Compensation Table

The table below summarizes the compensation information for the years ended December 31, 2011, 20102013, 2012 and 20092011 for our NEOs as of the end of the last fiscal year.

Grants of Plan-Based Awards

The table below provides the following information regarding plan-based awards granted to our NEOs in 20112013 under the Plan.