EXHIBIT 99.03
HOME SHOPPING NETWORK, INC.
1996 STOCK OPTION PLAN FOR EMPLOYEES
ESTABLISHMENT, PURPOSE AND TERM OF PLAN.
ESTABLISHMENT. The Home Shopping Network, Inc. 1996
Stock Option Plan for Employees (the "PLAN") is hereby
established effective as of May 10, 1996 (the "EFFECTIVE
DATE").
PURPOSE. The purpose of the Plan is to promote the
success of the Company and its Subsidiaries by attracting and
retaining employees by supplementing their cash compensation
and providing a means for them to increase their holdings of
Stock of the Company. The opportunity so provided and the
receipt of Options as compensation are intended to foster in
participants a strong incentive to put forth maximum effort for
the continued success and growth of the Company for the benefit
of customers and shareholders, to aid in retaining individuals
who put forth such efforts, and to assist in attracting the
best available individuals in the future.
TERM OF PLAN. The Plan shall continue in effect
until the earlier of its termination by the Board or the date
on which all of the shares of Stock available for issuance
under the Plan have been issued. However, all Options shall be
granted, if at all, within ten (10) years from the Effective
Date. Notwithstanding the foregoing, if the maximum number of
shares of Stock issuable pursuant to the Plan as provided in
Section 3.1 has been increased at any time, all Options shall
be granted, if at all, within ten (10) years from the date such
amendment was adopted by the Board. On the effective date of
the Plan, it shall supersede the 1986 Stock Option Plan for
Employees, which shall terminate on that date.
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. Whenever used herein, the
following terms shall have their respective meanings set forth
below:
(a) "BOARD" means the Board of Directors of the
Company or the Committee.
(b) "CODE" means the Internal Revenue Code of
1986, as amended, and any applicable regulations promulgated
thereunder.
(c) "COMMITTEE" means the Compensation/Benefits
Committee or other committee of the Board duly appointed to
administer the Plan and having such powers as shall be
specified by the Board. Unless the powers of the Committee
have been specifically limited, the Committee shall have all of
the powers of the Board granted herein, including, without
limitation, the power to amend or terminate the Plan at any
time, subject to the terms of the Plan and any applicable
limitations imposed by law.
(d) "COMPANY" means Home Shopping Network,
Inc., a Delaware corporation, or any successor corporation
thereto.
(e) "EMPLOYEE" means any person treated as an
employee (including an officer or a director who is also
treated as an employee) in the records of the Company and its
Subsidiaries; provided, however, that neither service as a
director nor payment of a director's fee shall be sufficient to
constitute employment for purposes of the Plan.
Notwithstanding the foregoing, the Chairman of the Board and
any consultant approved by the Board shall be deemed an
Employee for purposes of the Plan; provided, however neither
the Chairman nor a consultant may be issued Incentive Stock
Options.
(f) "EXCHANGE ACT" means the Securities
Exchange Act of 1934, as amended.
(g) "FAIR MARKET VALUE" means, as of any date,
the closing price of the Stock on the New York Stock
Exchange, Inc. (as published by the Wall Street Journal, if
published) on the day prior to such date, or if the Stock was
not traded on such day, on the next preceding day on which the
Stock was traded.
(h) "INCENTIVE STOCK OPTION" means an Option so
denominated in the Option Agreement and which qualifies as an
incentive stock option within the meaning of Section 422(b) of
the Code.
(i) "NONQUALIFIED STOCK OPTION" means an Option
so denominated or which does not qualify as an Incentive Stock
Option.
(j) "OPTION" means a right to purchase Stock
(subject to adjustment as provided in Section 3.2) pursuant to
the terms and conditions of the Plan. An Option may be either
an Incentive Stock Option or a Nonqualified Stock Option.
(k) "OPTION AGREEMENT" means a written
agreement between the Company and an Optionee setting forth the
terms, conditions and restrictions of the Option and/or SAR
granted to the Optionee.
(l) "OPTIONEE" means a person who has been
granted one or more Options and/or SAR's pursuant to the Plan.
(m) "RULE 16B-3" means Rule 16b-3 under the
Exchange Act, as amended from time to time, or any successor
rule or regulation.
(n) "STOCK" means the Company's common stock,
$.01 par value, as adjusted from time to time in accordance
with Section 3.2.
(o) "STOCK APPRECIATION RIGHT (SAR)" means the
right, granted by the Board (subject to adjustments provided in
Section 3.2), pursuant to the terms of the Plan, to receive
payment equal to the subsequent increase in the Fair Market
Value of the Stock.
(p) "SUBSIDIARY" means any present or future
"subsidiary corporation" of the Company, as defined in Section
424(f) of the Code.
(q) "TEN PERCENT OWNER OPTIONEE" means an
Optionee who, at the time an Option is granted to the Optionee,
owns stock constituting more than ten percent (10%) of the
total combined voting power of all classes of stock of Company
within the meaning of Section 422(b)(6) of the Code.
(r) "TRANSFER OF CONTROL" shall mean a
transaction or a series of related transactions (collectively,
the "TRANSACTION") wherein the shareholders of the Company
immediately before the Transaction do not retain immediately
after the Transaction, in substantially the same proportions as
their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect
beneficial ownership of more than fifty percent (50%) of the
total combined voting power of the outstanding voting stock of
the Company or the corporation or corporations to which the
assets of the Company were transferred (the "TRANSFEREE
CORPORATION(S)"), as the case may be, except for such a
transaction pursuant to which Barry Diller, Liberty Media
Corporation or any of their respective affiliates, is or
becomes such a 50% owner. For purposes of the preceding
sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting
stock of one or more corporations which, as a result of the
Transaction, own the Company or the Transferee Corporation(s),
as the case may be, either directly or through one or more
subsidiary corporations. The Board shall have the right to
determine whether multiple sales or exchanges of the voting
stock of the Company are related, and its determination shall
be final, binding and conclusive.
1.2 CONSTRUCTION. Captions and titles contained
herein are for convenience only and shall not affect the
meaning or interpretation of any provision of the Plan. Except
when otherwise indicated by the context, the singular shall
include the plural, the plural shall include the singular, and
the term "or" shall include the conjunctive as well as the
disjunctive.
2. ADMINISTRATION.
2.1 ADMINISTRATION BY THE BOARD. The Plan shall be
administered by the Board, including any duly appointed
committee of the Board. All questions of interpretation of the
Plan or of any Option or SAR shall be determined by the Board,
and such determinations shall be final and binding upon all
persons having an interest in the Plan or such Option or SAR.
2.2 POWERS OF THE BOARD. In addition to any other
powers set forth in the Plan and subject to the provisions of
the Plan and restrictions regarding Incentive Stock Options set
forth in the Code, the Board shall have the full and final
power and authority, in its sole discretion:
(a) to determine the persons to whom, and the
time or times at which, Options shall be granted and the number
of shares of Stock to be subject to each Option which
determination need not be uniform among persons similarly
situated and may be made selectively among Employees;
(b) to designate Options as Incentive Stock
Options or Nonqualified Stock Options;
(c) to determine the persons to whom, and the
time or times at which, SAR's and the number thereof shall be
granted which determination need not be uniform among persons
similarly situated and may be made selectively among Employees;
(d) to determine the terms, conditions and
restrictions applicable (which need not be identical) to each
Option and SAR including, without limitation, (i) the exercise
price of the Option or SAR, (ii) the method of payment for
shares purchased upon the exercise of the Option, (iii) the
method for satisfaction of any tax withholding obligation
arising in connection with the Option or SAR , including by the
withholding or delivery of shares of stock, (iv) the method of
payment upon exercise of any SAR's, (v) the timing, terms and
conditions of the exercisability of the Option or SAR, (vi) the
time of the expiration of the Option or SAR, (vii) the effect
of the Optionee's termination of employment or service with
Company on any of the foregoing, and (viii) all other terms,
conditions and restrictions applicable to the Option or SAR or
such shares not inconsistent with the terms of the Plan;
(e) to approve one or more forms of Option
Agreement;
(f) to amend the exercisability of any Option
or SAR , including with respect to the period following an
Optionee's termination of employment or service with the
Company;
(g) to prescribe, amend or rescind rules,
guidelines and policies relating to the Plan, or to adopt
supplements to, or alternative versions of, the Plan,
including, without limitation, as the Board deems necessary or
desirable to comply with the laws of, or to accommodate the tax
policy or custom of, foreign jurisdictions whose citizens may
be granted Options or SAR's; and
(h) to correct any defect, supply any omission
or reconcile any inconsistency in the Plan or any Option
Agreement and to make all other determinations and take such
other actions with respect to the Plan or any Option or SAR as
the Board may deem advisable to the extent consistent with the
Plan and applicable law.
2.3 DISINTERESTED ADMINISTRATION. The Plan shall be
administered in compliance with the "disinterested
administration" requirements of Rule 16b-3.
3. SHARES SUBJECT TO PLAN.
3.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to
adjustment as provided in Section 3.2, the maximum aggregate
number of shares of Stock that may be issued under the Plan and
under the 1996 Stock Option Plan for Outside Directors shall be
Eighteen Million Seven Hundred Thousand (18,700,000) and shall
consist of authorized but unissued or reacquired shares of
Stock or any combination thereof. If an outstanding Option or
SAR for any reason expires or is terminated or canceled prior
to being fully exercised, the shares of Stock allocable to the
unexercised portion of such Option or SAR, shall again be
available for issuance under the Plan.
3.2 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
In the event of any stock dividend, stock split, reverse stock
split, recapitalization, combination, reclassification or
similar change in the capital structure of the Company,
appropriate adjustments shall be made in the number and class
of shares subject to the Plan and to any outstanding Options
and SAR's and in the exercise price per share of any
outstanding Options and SAR's. If a majority of the shares
which are of the same class as the shares that are subject to
outstanding Options and SAR's are exchanged for, converted
into, or otherwise become (whether or not pursuant to a
Transfer of Control ) shares of another corporation (the "NEW
SHARES"), the Board shall amend the outstanding Options and
SAR's to provide that such Options and SAR's are exercisable
for or with respect to New Shares. In the event of any such
amendment, the number of shares subject to, and the exercise
price per share of, the outstanding Options and SAR's shall be
adjusted in a fair and equitable manner as determined by the
Board, in its sole discretion. In the event of any merger,
consolidation or other combination materially effecting the
number of shares of Stock outstanding, the Board may, in its
discretion, amend the outstanding Options to make appropriate
adjustments in the number and class of shares subject to the
Plan and to any outstanding Options and SAR's and in the
exercise price per share of any outstanding Options and SAR's.
Notwithstanding the foregoing, any fractional share resulting
from an adjustment pursuant to this Section 3.2 shall be
rounded up or down to the nearest whole number, as determined
by the Board, and in no event may the exercise price be
decreased to an amount less than the par value, if any, of the
stock subject to the Option. The adjustments determined by the
Board pursuant to this Section 3.2 shall be final, binding and
conclusive.
4. ELIGIBILITY AND OPTION LIMITATIONS.
4.1 PERSONS ELIGIBLE FOR OPTIONS AND SAR'S. Options
and SAR's may be granted only to Employees.
4.2 DIRECTORS SERVING ON COMMITTEE. No member of a
committee established to administer the Plan in compliance with
the "disinterested administration" requirements of Rule 16b-3,
while a member, shall be eligible to be granted an Option or
SAR.
4.3 FAIR MARKET VALUE LIMITATION. To the extent
that the aggregate Fair Market Value of stock with respect to
which options designated as Incentive Stock Options are
exercisable by an Optionee for the first time during any
calendar year (under all stock option plans of the Company,
including the Plan) exceeds One Hundred Thousand Dollars
($100,000), the portion of such Options which exceeds such
amount shall be treated as Nonqualified Stock Options. For
purposes of this Section 4.3, options designated as Incentive
Stock Options shall be taken into account in the order in which
they were granted, and the Fair Market Value of stock shall be
determined as of the time the Option with respect to such stock
is granted. If the Code is amended to provide for a different
limitation from that set forth in this Section 4.3, such
different limitation shall be deemed incorporated herein
effective as of the date and with respect to such Options as
required or permitted by such amendment to the Code. If an
Option is treated as an Incentive Stock Option in part and as a
Nonqualified Stock Option in part by reason of the limitation
set forth in this Section 4.3, the Optionee may designate which
portion of such Option the Optionee is exercising and may
request that separate certificates representing each such
portion be issued upon the exercise of the Option. In the
absence of such designation, the Optionee shall be deemed to
have exercised the Incentive Stock Option portion of the Option
first.
4.4 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 employ of the Company or its
Subsidiaries or shall interfere in any way with the right of
the Company or its Subsidiaries to terminate such Employee's
employment at any time.
5. TERMS AND CONDITIONS OF GRANTS. Options and
SAR's shall be evidenced by Option Agreements specifying the
number of shares of Stock covered thereby, in such form as the
Board shall from time to time establish. SAR's may be granted
alone or in tandem with an Option grant, in the Board's sole
discretion(but at all times subject to the provisions of the
Code). Option Agreements may incorporate all or any of the
terms of the Plan by reference and shall comply with and be
subject to the following terms and conditions:
5.1 EXERCISE PRICE. The exercise price for each
Option and SAR shall be established in the sole discretion of
the Board; provided, however, if the Option is an Incentive
Stock Option that (a) the exercise price per share for an
Option shall not be less than the Fair Market Value of a share
of Stock on the effective date of grant of the Option; and (b)
no Option granted to a Ten Percent Owner Optionee shall have an
exercise price per share less than one hundred ten percent
(110%) of the Fair Market Value of a share of Stock on the
effective date of grant of the Option. The exercise price for
a Nonqualified Stock Option and SAR shall be the same as
provided above, unless otherwise determined by the Board (but
at all times subject to the provisions of the Code).
Notwithstanding the foregoing, an Option (whether an Incentive
Stock Option or a Nonqualified Stock Option) may be granted
with an exercise price lower than the minimum exercise price
set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner
qualifying under the provisions of Section 424(a) of the Code.
5.2 EXERCISE PERIOD. Options and SAR's shall be
exercisable at such time or times, or upon such event or
events, and subject to such terms, conditions, performance
criteria, and restrictions as shall be determined by the Board
and set forth in the Option Agreement evidencing such Option;
provided, however, that (a) no Option or SAR shall be
exercisable after the expiration of ten (10) years after the
effective date of grant of such Option or SAR; and (b) no
Incentive Stock Option granted to a Ten Percent Owner Optionee
shall be exercisable after the expiration of five (5) years
after the effective date of grant of such Option.
5.3 PAYMENT OF OPTION EXERCISE PRICE.
(a) FORMS OF CONSIDERATION AUTHORIZED. Except
as otherwise provided below, payment of the exercise price for
the number of shares of Stock being purchased pursuant to any
Option shall be made (i) in cash, by check, or cash equivalent,
(ii) by tender to the Company of shares of Stock owned by the
Optionee having a Fair Market Value (as determined by the
Company without regard to any restrictions on transferability
applicable to such stock by reason of federal or state
securities laws or agreements with an underwriter for the
Company) not less than the exercise price, (iii) by the
assignment of the proceeds of a sale or loan with respect to
some or all of the shares being acquired upon the exercise of
the Option (including, without limitation, through an exercise
complying with the provisions of Regulation T as promulgated
from time to time by the Board of Governors of the Federal
Reserve System) (a "CASHLESS EXERCISE"), (iv) by such other
consideration as may be approved by the Board from time to time
to the extent permitted by applicable law or (v) by any
combination thereof. The Board may at any time or from time to
time, by adoption of or by amendment to the standard forms of
Option Agreement described in Section 6, or by other means,
grant Options which do not permit all of the foregoing forms of
consideration to be used in payment of the exercise price or
which otherwise restrict one or more forms of consideration.
(b) TENDER OF STOCK. Notwithstanding the
foregoing, an Option may not be exercised by tender to the
Company of shares of Stock to the extent such tender of Stock
would constitute a violation of the provisions of any law,
regulation or agreement restricting the redemption of the
Company's stock. Unless otherwise provided by the Board, an
Option may not be exercised by tender to the Company of shares
of Stock unless such shares either have been owned by the
Optionee for more than six (6) months or were not acquired,
directly or indirectly, from the Company.
(c) CASHLESS EXERCISE. The Company reserves,
at any and all times, the right, in the Company's sole and
absolute discretion, to establish, decline to approve or
terminate any program or procedures for the exercise of Options
by means of a Cashless Exercise.
5.4 PAYMENT OF SAR'S. Upon exercise of a SAR the
Company shall pay, subject to 5.5 below, the amount, if any,
by which the Fair Market Value of a share of Stock on the date
of exercise exceeds the Fair Market Value on the date of grant.
The exercise of a SAR shall cancel any Option associated with
it if said SAR was granted in tandem with an Option. The
payment for SAR's shall be made in shares of Stock, valued at
the Fair Market Value on the date of exercise or, at the sole
discretion of the Board, in cash, or partly in cash and partly
in Stock.
5.5 TAX WITHHOLDING. The Company shall have the
right, but not the obligation, to deduct from the shares of
Stock issuable upon the exercise of an Option, or to deduct
from amounts due the Optionee upon exercise of a SAR or to
accept from the Optionee the tender of, a number of whole
shares of Stock having a Fair Market Value, as determined by
the Company, equal to all or any part of the federal, state,
local and foreign taxes, if any, required by law to be withheld
by the Company with respect to such Option or SAR exercise.
Alternatively, or in addition, in its sole discretion, the
Company shall have the right to require the Optionee, through
payroll withholding, cash payment or otherwise, including by
means of a Cashless Exercise, to make adequate provision for
any such tax withholding obligations of the Company arising in
connection with the Option or SAR exercise. The Company shall
have no obligation to deliver shares of Stock, money or to
release shares of Stock from an escrow established pursuant to
the Option Agreement until the Company's tax withholding
obligations have been satisfied by the Optionee.
6. STANDARD FORMS OF OPTION AGREEMENT.
6.1 INCENTIVE STOCK OPTIONS. Unless otherwise
provided by the Board at the time the Option is granted, an
Option designated as an "Incentive Stock Option" shall comply
with and be subject to the terms and conditions set forth in
the appropriate form of Incentive Stock Option Agreement as
adopted by the Board and as amended from time to time.
6.2 NONQUALIFIED STOCK OPTIONS. Unless otherwise
provided by the Board at the time the Option is granted, an
Option designated as a "Nonqualified Stock Option" shall comply
with and be subject to the terms and conditions set forth in
the appropriate form of Nonqualified Stock Option Agreement as
adopted by the Board and as amended from time to time.
6.3 SAR'S. Unless otherwise provided by the Board
at the time a SAR is granted, a SAR awarded either alone or in
tandem with an Option shall comply with and be subject to the
terms and conditions set forth in the appropriate form of SAR
Option Agreement as adopted by the Board and as amended from
time to time.
6.4 STANDARD TERM OF OPTIONS. Except as otherwise
provided by the Board in the grant of an Option or SAR, any
Option or SAR granted hereunder shall have a term of ten (10)
years from the effective date of grant of the Option or SAR.
6.5 STANDARD VESTING PROVISIONS. Except as
otherwise provided by the Board in the grant of an Option or
SAR, any Options or SAR's granted hereunder shall become vested
and exercisable at the rate of twenty percent (20%) per year,
commencing upon the first anniversary of the effective date of
grant of the Option or SAR and each of the four (4) subsequent
anniversaries thereafter.
6.6 AUTHORITY TO VARY TERMS. The Board shall have
the authority from time to time to vary the terms of any of the
standard forms of Option Agreement described in this Section 6
either in connection with the grant or amendment of an
individual Option or SAR or in connection with the
authorization of a new standard form or forms; provided,
however, that the terms and conditions of any such new, revised
or amended standard form or forms of Option Agreement shall be
in accordance with the terms of the Plan. The Board, may in
its discretion, provide for the extension of the exercise
period of an Option or SAR, accelerate the vesting of an Option
or SAR, eliminate or make less restrictive any restrictions
contained in an Option Agreement or waive any restriction or
provision of this Plan or an Option Agreement in any manner
that is either (i) not adverse to the Optionee or (ii)
consented to by the Optionee.
7. NONTRANSFERABILITY OF OPTIONS. During the
lifetime of the Optionee, an Option or SAR shall be exercisable
only by the Optionee or the Optionee's guardian or legal
representative. No Option or SAR shall be assignable or
transferable by the Optionee, except by will or by the laws of
descent and distribution. Following an Optionee's death, the
Option shall be exercisable to the extent provided in Section 8
below.
8. EFFECT OF TERMINATION OF SERVICE.
8.1 OPTION AND SAR EXERCISABILITY.
(a) DISABILITY. If the Optionee's service with
the Company is terminated because of the disability of the
Optionee, the Option, to the extent unexercised and exercisable
on the date on which the Optionee's service terminated, may be
exercised by the Optionee (or the Optionee's guardian or legal
representative) at any time prior to the expiration of three
(3) months after the date on which the Optionee's service
terminated, but in any event no later than the Option
expiration date.
(b) DEATH. If the Optionee's service with the
Company is terminated because of the death of the Optionee,
the Option, to the extent unexercised and exercisable on the
date on which the Optionee's service terminated, may be
exercised by the the Optionee's legal representative or other
person who acquired the right to exercise the Option by reason
of the Optionee's death at any time prior to the expiration of
six (6) months after the date on which the Optionee's service
terminated, but in any event no later than the Option
Expiration Date. The Optionee's service shall be deemed to
have terminated on account of death if the Optionee dies within
three (3) months after the Optionee's termination of service.
(c) TERMINATION OF SERVICE. If the Optionee's
service with the Company terminates for any reason, except
disability or death, the Option, to the extent unexercised and
exercisable by the Optionee on the date on which the Optionee's
service terminated, may be exercised by the Optionee within six
(6) months after the date on which the Optionee's service
terminated, but in any event no later than the Option
Expiration Date. Notwithstanding the foregoing, the Company ,
may in its sole discretion, cancel the Options if the Optionee
has been Terminated for Cause (as defined in Section 8.2).
(e) SAME CONDITIONS APPLICABLE TO SAR'S. The
same terms and conditions applicable to Options shall apply to
the exercisability of SAR's upon the occurrence of (a) - (d)
above.
8.2 TERMINATION FOR CAUSE. "TERMINATION FOR CAUSE"
shall mean termination by the Company of the Optionee's
service with Company for any of the following reasons: (i)
theft, dishonesty, or falsification of any employment or
Company records; (ii) improper use or disclosure of Company's
confidential or proprietary information; (iii) the Optionee's
failure or inability to perform any reasonable assigned duties
after written notice from Company of, and a reasonable
opportunity to cure, such failure or inability; (iv) any
material breach by the Optionee of any employment agreement
between the Optionee and Company, which breach is not cured
pursuant to the terms of such agreement; or (v) the Optionee's
conviction of any criminal act which impairs Optionee's
ability to perform his or her duties with Company.
Termination for Cause pursuant to the foregoing shall be
determined in the sole but reasonably exercised discretion of
the Company.
9. EFFECT OF TRANSFER OF CONTROL. Except as
otherwise provided by the Board in the grant of an Option or
SAR, in the event of a Transfer of Control, any Options and
SAR's outstanding as of the date such Transfer of Control is
determined to have occurred, and which are not then exercisable
and vested, shall become fully exercisable and vested to the
full extent of the original grant; provided, however, in the
case of any holder of SAR's who is subject to Section 16(b) of
the Exchange Act, and whose SAR's are not already outstanding
for at least six months at the date of the Transfer of Control,
such SAR's shall not become fully exercisable and vested until
they have been outstanding for six months.
10. INDEMNIFICATION. In addition to such other
rights of indemnification as they may have as members of the
Board or officers or employees of the Company , members of the
Board and any officers or employees of the Company to whom
authority to act for the Board is delegated shall be
indemnified by the Company against all reasonable expenses,
including attorneys' fees, incurred in connection with the
defense of any action, suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a
party by reason of any action taken or failure to act under or
in connection with the Plan, Option, or any right granted
hereunder, and against all amounts in settlement thereof
(provided such settlement is approved by independent legal
counsel selected by the Company) or paid in satisfaction of a
judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such
action, suit or proceeding that such person is liable for gross
negligence, bad faith or intentional misconduct in duties;
provided, however, that within sixty (60) days after the
institution of such action, suit or proceeding, such person
shall offer to the Company, in writing, the opportunity at its
own expense to handle and defend the same. Without limiting
the generality of the foregoing, Company will pay the expenses
(including reasonable counsel fees) of defending any such
claim, action, suit or proceeding in advance of its final
disposition, upon receipt of such person's written agreement
to repay all amounts advanced if it should ultimately be
determined that such person is not entitled to be indemnified
under this Section.
11. TERMINATION OR AMENDMENT OF PLAN. The Board,
without further approval of the shareholders, may terminate or
amend this Plan at any time in any respect as the Board deems
advisable, subject to any required stockholder or regulatory
approval and to any conditions established by the terms of such
amendment, provided that in no event shall the Plan be amended
more than once every six (6) months other than to comply with
changes in any applicable law or governmental regulation in the
Code, the Employee Retirement Income Security Act, or the rules
promulgated by the Securities and Exchange Commission. In any
event, no termination or amendment of the Plan may adversely
affect any then outstanding Option or SAR or any unexercised
portion thereof, without the consent of the Optionee, unless
such termination or amendment is required to enable an Option
designated as an Incentive Stock Option to qualify as an
Incentive Stock Option or is necessary to comply with any
applicable law or government regulation.
12. DISSOLUTION OF COMPANY. Upon the dissolution of
the Company, the Plan shall terminate and any and all Options
previously granted shall lapse on the date of such dissolution.
13. RIGHTS AS SHAREHOLDERS. No Optionee, nor any
beneficiary or other person claiming through an Optionee, shall
have any interest in any shares of Stock allocated for the
purposes of the Plan or subject to any Option or SAR until such
shares of Stock shall have been issued to the Optionee or such
beneficiary or other person. Furthermore, the existence of
the Options or the SAR's shall not affect the right or power of
the Company or its shareholders to make adjustments,
recapitalization, reorganizations, or other changes in the
Company's capital structure or its business; issue bonds,
debentures, preferred or prior preference stocks affecting the
Stock of the Company or the rights thereof; dissolve the
Corporation or sell or transfer any part of its assets or
business; or do any other corporate act, whether of a similar
character or otherwise.
14. GOVERNING 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
giving effect to choice of law provisions. 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 complained of took place or
the residence of any party to such action.
15. ARBITRATION. Any action brought in connection
with the Plan or an Option Agreement shall be settled
exclusively by binding arbitration conducted in the City of
Tampa, Florida in accordance with the commercial rules of the
American Arbitration Association then in effect (the "Rules"),
by a single, independent arbitrator selected by the Company and
the other party to the action. If the parties cannot agree on
an arbitrator, within thirty (30) days of the commencement of
an arbitration proceeding hereunder, either party may request
that the American Arbitration Association select an arbitrator,
with experience in law relating to option plans, in accordance
with the Rules. The decision of the arbitrator shall be final
and binding. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction
thereof. The cost of any arbitration proceeding conducted
hereunder shall be borne equally between the parties unless
otherwise determined by the arbitrator.
16. SHAREHOLDER APPROVAL. The Plan or any increase
in the maximum number of shares of Stock issuable thereunder as
provided in Section 3.1 (the "MAXIMUM SHARES") shall be
approved by the shareholders of the Company within twelve (12)
months of the date of adoption thereof by the Board. Options
granted prior to shareholder approval of the Plan or in excess
of the Maximum Shares previously approved by the shareholders
shall become exercisable no earlier than the date of
shareholder approval of the Plan or such increase in the
Maximum Shares, as the case may be.
IN WITNESS WHEREOF, the undersigned Secretary of the
Company certifies that the foregoing Home Shopping Network,
Inc. 1996 Stock Option Plan for Employees was duly adopted by
the Board on February 12, 1996.
________________________________
Secretary