EXHIBIT 99.05
HOME SHOPPING NETWORK, INC.
1986 Stock Option Plan For Employees
This is the 1986 Stock Option/Stock Appreciation Rights Plan
for Employees (the "Plan") of Home Shopping Network, Inc. (the
"Corporation"), a Delaware corporation with its principal of-
fices in Clearwater, Florida. The Plan has provisions under
which options may be granted to full-time employees of the Cor-
poration and its subsidiaries from time to time purchase shares
of the Corporation's common stock, or that in lieu of exercis-
ing an Option, the employee may elect to exercise a Stock Ap-
preciation Right (SAR), subject to the limitations, provisions,
and requirements hereinafter set forth.
I. Plan Objectives
The Plan is intended to provide a method whereby full-time
employees of the Corporation and its subsidiaries who are
largely responsible for the management, growth, and pro-
tection of the business, and who are making and can con-
tinue to make substantial contributions to the success of
the Corporation, may be encouraged to acquire stock owner-
ship in the Corporation. This ownership increases plan
members' proprietary interest in the business, provides
them with greater incentive for their continued employ-
ments, and promotes the interests of the Corporation and
all its shareholders. Stock Appreciation Rights serve to
further align the interests of management with the inter-
ests of shareholders by offering a stock-related compensa-
tion vehicle.
Stock options granted under the Plan may be designated by
the Stock Option Committee of the Corporation's Board of
Directors (the "Committee") at its election as either In-
centive Stock Options or Nonqualified Stock Options. Such
designation as to whether an option is either an Incentive
Stock Option or Nonqualified Stock Option shall be made on
the date of grant, each evidenced by a separate written
instrument.
II. Plan Definitions
The following definition will be established with the Plan
text, and unless the text indicates otherwise, shall have
the meanings set forth below.
"Board" means the Board of Directors of the Corpora-
tion.
"Code" means the Internal Revenue Code of 1954, as
amended.
"Committee" means the Stock Option Committee of the
Board, which is the designated administrator of the
Plan.
"Common Stock" means the Corporation's common stock,
at $.01 par value per share, or such other class of
shares or securities as to which the provisions of
the Plan may be applicable.
"Fair Market Value" when used in connection with Com-
mon Stock on a certain date, means the reported clos-
ing price of the Common Stock based on the composite
of transactions as reported on the American Stock
Exchange (as published by the Wall Street Journal, if
published) on the day prior to such date, or if the
Common Stock was not traded on such date, on the next
preceding day on which the Common Stock was traded
thereon.
"Grant Date" as used in reference to a particular
Option, means the date which such Option is granted
by the Committee pursuant to the Plan.
"Grantee" means the individual to whom an Option is
granted by the Committee pursuant to the Plan.
"Incentive Stock Option" means an Option that quali-
fies as an Incentive Stock Option as described in
Section 422A of the Code.
"Nonqualified Stock Option" means any Option granted
under the Plan other than an Incentive Stock Option.
"Option" means an option granted by the Committee
pursuant to the Plan to purchase shares of Common
Stock, which may be designated as either an Incentive
Stock Option or a Nonqualified Stock Option.
"Option Period" means the period beginning on the
Grant Date and ending on the day prior to the tenth
anniversary of the Grant Date or such shorter ending
date as set by the Committee on the Grant Date.
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"Stock Appreciation Right (SAR)" means the right,
granted by the Committee pursuant to Section VII of
the plan, to receive payment equal to the subsequent
increases in the Fair Market Value of a share of Com-
mon Stock.
III. Administration of the Plan - the Committee
(a) Appointment of the Committee
The Plan shall be administered by the Stock Op-
tion Committee of the Board of Directors. The
Committee shall never have less than three mem-
bers, all of whom shall be "disinterested per-
sons" within the meaning of rule 16b-3 of the
Securities Exchange Act of 1934, as amended from
time to time. No member of the Committee shall
be eligible to receive Options or SARs pursuant
to the Plan during the period which they serve
on the Committee.
(b) Committee Powers
The Committee shall administer the Plan. Fur-
ther, it shall have full power to construe and
interpret the Plan, establish rules for the
Plan's administration, determine the persons
eligible to receive Options and SARs, and grant
Options and SARs to eligible persons.
(c) Committee Action
A majority of the members of the Committee shall
constitute a quorum for the transaction of busi-
ness. All actions by the Committee at a meeting
shall be the vote of a majority of those present
at such meeting, but any action may be taken by
the Committee without a meeting upon written
consent signed by all members of the Committee.
Members of the Committee may participate in a
meeting by means of a conference telephone or
similar communications equipment with which all
persons participating in the meeting can hear
each other.
(d) Committee Determinations Conclusive
All determinations of the Committee as to which
persons shall receive Options and SARs, which
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Options are to be designated as Incentive Stock
Options, and the number of shares pursuant to
each Option and SAR granted, shall be final,
binding, and conclusive for all persons inter-
ested in the Plan.
The determination of the Committee as to the
construction or interpretation of any terms and
provisions of the Plan, including whether and
when there has been a termination of an
employee's employment, shall be final, binding,
and conclusive upon all persons.
IV. Shares Subject to the Plan
The aggregate number of shares of Common Stock with re-
spect to which Options and SARs may be granted shall not
exceed 400,000 shares of Common Stock (the "Reserved
Shares"), subject tot he adjustment in accordance with
Section IX of the Plan. In the event that any Option or
SAR expires, lapses, or otherwise terminates prior to be-
ing fully exercised, any shares of Common Stock allocable
to the unexercised portion of such Option or SAR may again
be made subject to an Option or SAR.
V. Eligibility
(a) Eligible Employees
Options and SARs shall be granted only to per-
sons who are key management employees of the
Corporation or its subsidiaries as determined by
the Committee. Directors or employees who are
not full-time employees of the Corporation or
its subsidiaries are not eligible to participate
in the Plan.
(b) No Right of Employment
Nothing in the Plan or in any Option or SAR
granted shall confer any right on an employee to
continue in the employe of the Corporation or
its subsidiaries or shall interfere in any way
with the right of the corporation or its subsid-
iaries to terminate such employee's employment
at any time.
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VI. Options
(a) Grant of Options
The Committee may from time to time, subject to
the provisions of the Plan, grant to employees
of the Corporation or its subsidiaries either
Incentive Stock Options or Nonqualified Stock
Options, or both, for the purchase of shares of
Common stock allotted in accordance with Section
IV. At the time of grant, the Committee may
designate any Option as either an Incentive
Stock Option or a Nonqualified Stock Option, but
must make such designation by the Grant Date.
Any Option not designated as an Incentive Stock
Option will be a Nonqualified Stock Option and
must satisfy the requirements of Section VI(b)
and (c), but shall not be subject to the re-
quirements of section VI(d).
(b) Option Requirements
(i) An Option shall be evidenced by a written in-
strument specifying the number of shares of
Common stock that may be purchased by its
exercise and containing such terms and condi-
tions consistent with the Plan as the Commit-
tee shall determine. There shall be a sepa-
rate written instrument for each Incentive
Stock Option and each Nonqualified Stock Op-
tion.
(ii) An Option shall not be granted on or after the
tenth anniversary of the date upon which the
Plan was adopted by the Committee.
(iii) An Option shall not be exercisable after the
expiration of the Option Period.
(iv) The Option price per share of Common Stock
shall be equal to the Fair Market Value of a
share of Common Stock on the Grant Date.
(v) An Option shall not be transferable other than
by will or the laws of descent and distribu-
tion. During the Grantee's lifetime, an Op-
tion shall be exercisable only by the Grantee,
except as otherwise provided herein. The Com-
mittee may permit the transfer, upon Grantee's
death, to beneficiaries designated by the
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Grantee and may permit the exercise, during
Grantee's lifetime, by Grantees's guardian or
legal representative, provided that the Com-
mittee determines that such transfer and such
exercise are consonant with requirements for
exemption form Section 16(b) of the Securities
Exchange Act of 1934, as amended, and, with
respect to an Incentive Stock Option, the re-
quirements of Section 422A(b)(5) of the Code.
(vi) In the event of voluntary termination of em-
ployment at the election of the employee or
termination for cause at the election of the
Corporation or its subsidiaries, all Options
shall lapse forthwith.
(vii) A person electing to exercise an Option shall
give written notice, in such form as the Com-
mittee may require, of such election to the
Corporation and shall tender to the Corpora-
tion the full purchase price for the shares of
Common Stock for which the election is made.
Payment of the purchase price shall be made in
cash or in such other form as the Corporation
may approve, including shares of Common Stock
of the Corporation valued at the Fair Market
Value on the date of exercise of the Option.
(c) Nonqualified Stock Option Requirements
In the event of retirement or the termination of
employment due to total and permanent dis-
ability, a Nonqualified Stock Option shall lapse
at the earlier of the end of the Option Period
or at the end of a period of time after the date
of such retirement or termination equal to one
month for each full or partial year of employ-
ment with the Corporation or its subsidiaries of
its subsidiaries from the most recent date of
employment.
(d) Incentive Stock Option Requirements
(i) An Option designated by the Committee as an
Incentive Stock Option is intended to qualify
as an "Incentive Stock Option" within the
meaning of Subsection (b) of Section 422A of
the Code and shall satisfy, in addition to the
conditions of Section VI(b) of the Plan, the
conditions set forth in this Section VI(d).
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(ii) An Incentive Stock Option shall not be granted
to an individual who, on the Grant Date, owns
stock possessing more than ten percent of the
total combined voting power of all classes of
stock of the Corporation. For purposes of
this subparagraph VI(d)(ii), in determining
stock ownership, an individual shall be con-
sidered as owning the stock owned, directly or
indirectly, by or for his or her brothers and
sisters, spouse, ancestors, and lineal descen-
dants. Stock owned, directly or indirectly,
by or for a corporation, partnership, estate,
or trust shall be considered as being owned
proportionately by or for its shareholders,
partners, or beneficiaries. Stock with re-
spect to which an individual holds an Option
shall not be counted. "Outstanding stock"
shall include all stock actually issued and
outstanding immediately after the grant of the
Option. "Outstanding stock" shall not include
shares authorized for issue under outstanding
options held by the Grantee or by any other
person.
(iii) An Incentive Stock Option shall not be exer-
cisable while there is outstanding (within the
meaning of Section 422A(c)(7) of the Code) any
other "Incentive Stock Option," within the
meaning of Subsection (b) of Section 422A of
the Code, which was granted before the grant-
ing of the Incentive Stock Option to the
grantee to purchase stock in the Corporation.
(iv) The aggregate Fair Market Value, determined on
the Grant Date, of the shares of Common Stock
with respect to which any Grantee may be
granted one or more Incentive Stock Options
under the Plan (within the meaning of Subsec-
tion (b) of the Section 422A of the Code) in
any calendar year shall not exceed $100,000
plus any "unused limit carryover" to such
year, determined in accordance with Section
422A(c)(4) of the Code. For purposes of this
paragraph IV(d)(iv), an "unused limited carry-
over" shall be equal to one-half of the excess
of (i) $100,000 over (ii) the aggregate fair
market value (determined on the date an Option
is granted) of the stock for which the Grantee
is granted Incentive Stock Options in such
year under the Plan. The unused limit carry-
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over arising in any calendar year may be car-
ried over to any of the three consecutive
calendar years next following such year but
only to the extent not used in any earlier
calendar year. The value of the Common stock
for which Incentive Stock Options are granted
under the Plan in any calendar year shall be
applied first against the basis $100,000 limit
for each year and then against any unused
limit carryovers which may be carried over to
such year in the order of the calendar years
in which such carryovers arose.
(v) In the event of retirement, the Incentive
Stock Option shall lapse at the earlier of the
end of the Option period or three months after
the date of retirement. In the event of ter-
mination of employment due to total and perma-
nent disability, the Incentive Stock Option
shall lapse at the earlier of the end of the
Option Period or one year after the date of
such termination.
VII. Stock Appreciation Rights (SARs)
(a) Grant of Stock Appreciation Rights
In relation to any Option granted, the Committee may
grant an SAR with respect to each share of Common
Stock that may be purchased by the exercise of the
Option. The grant of each SAR shall be subject to
the same terms and provisions as to the underlying
Option.
(b) Exercise of Stock Appreciation Rights
In lieu of exercising an Option, a Grantee may elect
to exercise an SAR for each Option granted, if such
grant had SARs attached in relationship with that
grant. Upon exercising the SAR, the Corporation
shall pay the amount, if any, by which the Fair
Market Value of a share of Common Stock on the date
of exercise exceeds the Fair Market Value of a share
of Common Stock on the Grant Date. The exercise of
an SAR shall cancel the Option associated with that
grant.
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(c) Payment of Stock Appreciation Rights
The payment for SARs shall be made in shares of Com-
mon Stock, valued at Fair Market Value on the date of
exercise or, at the sole discretion of the Committee,
in cash, or partly in cash and partly in shares of
Common Stock.
(d) Requirements of Stock Appreciation Rights
Stock Appreciation Rights (SARs) granted in relation
to an Option shall be exercisable only to the extent
that the Option is exercisable. Stock Appreciation
Rights (SARs) shall be evidenced by a written instru-
ment containing such terms and consistent with the
underlying Option and the Plan as the Committee shall
determine. A Grantee electing to exercise SARs shall
give written notice, in such form as the Committee
may require, of such election to the Corporation.
(e) Lapse of an Option
The lapse of an Option to purchase any number of
shares of Common Stock shall cause a corresponding
reduction in the same number of related SARs.
(f) Nontransferability of Stock Appreciation Rights
Stock Appreciation Rights (SARs) shall not be trans-
ferable other than by will or the laws of descent and
distribution and, during the Grantee's lifetime, the
SARs shall be exercisable only by the Grantee; ex-
cept, that the Committee may permit:
(i) exercise, during Grantee's lifetime, by a
guardian or legal representative; or
(ii) transfer, upon Grantee's death, to benefi-
ciaries designated by the Grantee in a manner
authorized by the Committee, provided that the
Committee determines that such exercise or
such transfer is consonant with requirements
for exemption from Section 16(b) of the Secu-
rities Exchange Act of 1934, as amended.
VIII. Modification, Extension, or Renewal of Option
Subject to the terms and conditions and within the limita-
tions of the Plan, the Committee may modify, extend, or
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renew outstanding Options or SARs granted under the Plan
or accept the surrender of outstanding Options or SARs (to
the extent not theretofore exercised) and authorize the
granting of new Options or SARs in substitution therefore.
Without limiting the generality of the foregoing, the Com-
mittee may grant to Grantee, if he or she is otherwise
eligible and consents thereto, a new or modified Option or
SAR in lieu of an outstanding Option or SAR for a number
of shares, at an exercise price and for a term which are
greater or lesser than under the earlier Option or SAR, or
may do so by cancellation and regrant, amendment, substi-
tution, or otherwise, subject only to the general limita-
tions and conditions of the Plan. The foregoing notwith-
standing, no modification of an Option or SAR shall,
without the consent of the Grantee, alter or impair any
rights or obligations under any Option or SAR theretofore
granted under the Plan.
IX. Changes in Capitalization
(a) Adjustment Provisions
In the event that:
(i) a recapitalization, reclassification, split-
up, or consolidation of Common Stock is ef-
fected;
(ii) the outstanding shares of Common Stock are
exchanged, in connection with a merger or con-
solidation of the Corporation or a sale by the
Corporation of all or a part of its assets,
for a different number or class of shares of
stock or other securities of the Corporation
or for shares of the stock or other securities
of any other corporation;
(iii) new, different, or additional shares or other
securities of the Corporation or of another
corporation are received by the holders of
Common Stock; or
(iv) any distribution is made to the holders of
Common Stock other than a cash dividend;
then the Committee shall make the appropriate adjust-
ments to:
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(i) the number and class of shares or other secu-
rities that may be issued pursuant to the
exercise of Options;
(ii) the purchase price to be paid per share under
outstanding Options; and
(iii) the number of shares covered by each outstand-
ing Option.
(b) Dissolution
Upon the dissolution of the Corporation, the Plan
shall terminate and all Options previously granted
shall lapse on the date of such dissolution.
X. Legal Restrictions
The Corporation will not be obligated to issue shares of
Common Stock if counsel to the Corporation determines that
such issuance would violate any law or regulation of any
governmental authority or any agreement between the
Corporation and any national securities exchange upon
which the Common Stock is listed. In connection with any
stock issuance or transfer, the person acquiring the
shares shall, if requested by the Corporation, give
assurances satisfactory to counsel to the Corporation
regarding such matters as the Corporation may deem desir-
able to assure compliance with all legal requirements.
The Corporation shall in no event be obliged to take any
action in order to cause the exercise of any Option or
SAR.
XI. Rights as Shareholders
No Grantee, nor any beneficiary or other person claiming
through a Grantee, shall have any interest in any shares
of Common Stock allocated for the purpose of the Plan or
subject to any Option or SAR until such shares of Common
Stock shall have been issued to the Grantee or such per-
son. Furthermore, the existence of the Options or the
SARs shall not affect the right or power of the Corpora-
tion or its shareholders to make adjustments, recapital-
izations, reorganizations, or other changes in the
Corporation's capital structure or its business; issue
bonds, debentures, preferred or prior preference stocks
affecting the Common Stock of the Corporation or the
rights thereof; dissolve the Corporation or sell or trans-
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fer any part of its assets or business; or do any other
corporate act, whether of a similar character or other-
wise.
XII. Choice of Law
The validity, interpretation and administration of the
Plan and of any rules, regulations, determinations, or
decisions made thereunder, and the rights of any and all
persons having or claiming to have any interest therein or
thereunder, shall be determined exclusively in accordance
with the laws of the State of Florida. Without limiting
the generality of the foregoing, the period within which
any action in connection with the Plan must be commenced
shall be governed by the Laws of the State of Florida
without regard to the place where the act or omission com-
plained of took place, the residence of any party to such
action, or the place where the action may be brought.
XIII. Amendment, Suspension, or Termination of the Plan
The Committee may at any time terminate, suspend, or amend
the Plan; however, no amendment shall, without the ap-
proval of shareholders of the Corporation:
(i) increase the aggregate number of shares which may
be issued in connection with Options or SARs;
(ii) change the Option exercise price;
(iii) increase the maximum period during which Options or
SARs may be exercised;
(iv) extend the effective date of the Plan; or
(v) materially modify the requirements as to eligibil-
ity for participation in the Plan.
XIV. Duration of the Plan
No Option shall be granted under the Plan after July 31,
1996. Options granted before that date shall remain valid
thereafter in accordance with their terms.
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XV. Effective Date of the Plan
The Plan was adopted by the Board on August 1, 1986. It
will become effective if and when approved by shareholders
holding a majority of the Corporation's outstanding shares
represented in person or by proxy and entitled to vote on
the Plan at the Annual Meeting of Shareholders in 1986.
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HOME SHOPPING NETWORK, INC.
FIRST AMENDMENT TO THE
1986 STOCK OPTION PLAN FOR EMPLOYEES
This is the First Amendment to the 1986 Stock Option Plan
for Employees (the "Plan") of Home Shopping Network, Inc. (the
"Corporation"), a Delaware corporation with its principal of-
fices in Clearwater, Florida.
Paragraph IV of the Plan is hereby amended to read as fol-
lows:
IV Shares Subject to the Plan
The aggregate number of shares of Common Stock with
respect to which Options and SARs may be granted shall not
exceed 2,200,000 shares of Common Stock (the "Reserved
Shares"), subject to the adjustment in accordance with
Section IX of the Plan. In the event that any Option or
SAR expires, lapses or otherwise terminates prior to being
fully exercised, any shares of Common Stock allocable to
the unexercised portion of such Option or SAR may again be
made subject to an Option or SAR.
Dated this 21st day of November, 1986.
HOME SHOPPING NETWORK, INC.
SECOND AMENDMENT TO THE
1986 STOCK OPTION PLAN FOR EMPLOYEES
This is the Second Amendment to the 1986 Stock Option Plan
for Employees (the "Plan") of Home Shopping Network, Inc. (the
"Corporation"), a Delaware corporation with its principal
offices in Clearwater, Florida.
Paragraph IV of the Plan is hereby amended to read as fol-
lows:
IV Shares Subject to the Plan
The aggregate number of shares of Common Stock with
respect to which Options and SARs may be granted shall not
exceed 10,000,000 shares of Common Stock (the "Reserved
Shares"), subject to the adjustment in accordance with
Section IX of the Plan. In the event that any Option or
SAR expires, lapses or otherwise terminates prior to being
fully exercised, any shares of Common Stock allocable to
the unexercised portion of such Option or SAR may again be
made subject to an Option or SAR.
Dated this 14th day of July, 1987.
HOME SHOPPING NETWORK, INC.
THIRD AMENDMENT TO THE
1986 STOCK OPTION PLAN FOR EMPLOYEES
This is the Third Amendment to the 1986 Stock Option Plan
for Employees (the "Plan") of Home Shopping Network, Inc. (the
"Corporation"), a Delaware corporation with its principal
offices in St. Petersburg, Florida.
Section (vi) of Paragraph (b) of Article VI of the Plan is
hereby amended to read as follows:
(vi) The Committee may, in its sole discretion, cancel
options granted to an employee whose employment has been
terminated for cause. Upon the termination of employment
other than for cause, options granted under the Plan shall
be cancelled only to the extent that such options were not
exercisable as of the date of such termination.
The effective date of this amendment shall be August 1,
1986, the effective date of the Plan.
Adopted this 26th day of September 1988 by the
Compensation/Benefits Committee of the Board of Directors of
Home Shopping Network, Inc.
EXHIBIT 10.31
HOME SHOPPING NETWORK, INC.
FOURTH AMENDMENT TO THE
1986 STOCK OPTION PLAN FOR EMPLOYEES
This is the Fourth Amendment to the 1986 Stock Option Plan
for Employees (the "Plan") of Home Shopping Network, Inc., a
Delaware corporation (the "Corporation"), with its principal
offices in St. Petersburg, Florida.
1. All references in the Plan to Section 422A of the Code
shall be changed to Section 422 of the Code.
2. Section (iii) of Paragraph (d) of Article VI of the
Plan is hereby amended to read as follows:
(iii) An Incentive Stock Option shall not be exercisable
while there is outstanding (within the meaning of former
Subsection 4322A(c)(7) of the Code) any other "Incentive
Stock Option," within the meaning of Subsection 422(b) of
the Code, which was granted before the granting of the
Incentive Stock Option to the grantee to purchase stock in
the Corporation; provided, however, that the foregoing
clause requiring that Incentive Stock Options be exercised
sequentially shall not apply to Incentive Stock options
granted after the date of this Fourth Amendment, which
Incentive Stock Options may be exercised without regard to
previously granted and still outstanding Incentive Stock
Options.
3. Section (iv) of Paragraph (d) of Article VI of the
Plan is hereby amended to read as follows:
(iv) An optionee may hold and exercise more than one In-
centive Stock Option, but only on the terms and subject to
the restrictions hereafter set forth. The aggregate fair
market value (determined as of the time an Incentive Stock
Option is granted) of the Common Stock with respect to
which Incentive Stock Options are exercisable for the
first time by any employee in any calendar year under the
Plan and under all other Incentive Stock Option plans of
the Corporation and any parent and subsidiary corporations
of the Corporation (as those terms are defined in Section
425 of the Internal Revenue Code of 1986, as amended)
shall not exceed $100,000.
The effective date of this amendment shall be the date
adopted.
Adopted this 16th day of June, 1992 by the Compensation/
Benefits Committee of Home Shopping Network, Inc.