EXHIBIT 10.1
APPENDIX A
USA NETWORKS, INC.
2000 STOCK AND ANNUAL INCENTIVE PLAN
SECTION 1. Purpose; Definitions
The purpose of the Plan is to give the Corporation a competitive advantage
in attracting, retaining and motivating officers and employees and to provide
the Corporation and its subsidiaries with a stock plan providing incentives more
directly linked to the profitability of the Corporation and increases in
shareholder value.
For purposes of the Plan, the following terms are defined as set forth
below:
(a) "AFFILIATE" means a corporation or other entity controlling,
controlled by or under common control with the Corporation.
(b) "AWARD" means a Stock Appreciation Right, Stock Option, Restricted
Stock, Performance Unit or Bonus Award.
(c) "AWARD CYCLE" shall mean a period of consecutive fiscal years or
portion thereof designated by the Committee over which Performance Units are to
be earned.
(d) "BOARD" means the Board of Directors of the Corporation.
(e) "BONUS AWARD" means an annual bonus award made pursuant to Section 10.
(f) "CAUSE" means, except as otherwise determined by the Committee
pursuant to an Award agreement, the willful and continued failure on the part of
a participant substantially to perform his employment duties in any material
respect, or such other events as shall be determined by the Committee; provided,
that "Cause" includes, without limitation: (i) the plea of guilty or nolo
contendere to, or conviction for, the commission of a felony offense by a
participant; (ii) a material breach by a participant of a fiduciary duty owed to
the Corporation or any of its subsidiaries; (iii) a material breach by a
participant of any nondisclosure, non-solicitation or non-competition obligation
owed to the Corporation or any of its subsidiaries; and (iv) the willful or
gross neglect by a participant of his employment duties. The Committee shall
have the sole discretion to determine whether "Cause" exists, and its
determination shall be final.
(g) "CHANGE IN CONTROL" and "CHANGE IN CONTROL PRICE" have the meanings
set forth in Sections 11(b) and (c), respectively.
(h) "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
(i) "COMMISSION" means the Securities and Exchange Commission or any
successor agency.
(j) "COMMITTEE" means the Committee referred to in Section 2.
(k) "COMMON STOCK" means common stock, par value $.01 per share, of the
Corporation.
(l) "CORPORATION" means USA Networks, Inc., a Delaware corporation.
(m) "COVERED EMPLOYEE" means a participant designated prior to the grant
of shares of Restricted Stock, Performance Units or Bonus Awards by the
Committee who is or may be a "covered employee"
A-1
within the meaning of Section 162(m)(3) of the Code in the year in which
Restricted Stock or Performance Units are expected to be taxable to such
participant.
(n) "DISABILITY" means, except as otherwise determined by the Committee in
an Award Agreement, permanent and total disability as determined under
procedures established by the Committee for purposes of the Plan.
(o) "EARLY RETIREMENT" means retirement from active employment with the
Corporation, a subsidiary or Affiliate pursuant to the early retirement
provisions of the applicable pension plan of such employer.
(p) "EBITDA" means for any period, the consolidated earnings (losses) of
the Corporation before extraordinary items and the cumulative effect of
accounting changes, as determined by the Corporation in accordance with GAAP,
and before interest (expenses or income), taxes, depreciation, amortization,
non-cash gains and losses from sales of assets other than in the ordinary course
of business and non-cash expense charged against earnings resulting from the
application of accounting for business combinations in accordance with
Accounting Principles Board Opinion No. 16 ("APB No. 16").
(q) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
(r) "FAIR MARKET VALUE" means, as of any given date, the last reported
sales price of the Common Stock in the over-the-counter market, as reported by
NASDAQ (or, if the Common Stock is listed on a national securities exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national security exchange on which the
Common Stock is listed or admitted to trading) on the last preceding date or, if
there are no reported sales on that date, on the last day prior to that date on
which there are such reported sales.
(s) "INCENTIVE STOCK OPTION" means any Stock Option designated as, and
qualified as, an "incentive stock option" within the meaning of Section 422 of
the Code.
(t) "NONQUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.
(u) "NORMAL RETIREMENT" means retirement from active employment with the
Corporation, a subsidiary or Affiliate at or after age 65.
(v) "PERFORMANCE GOALS" means the performance goals established by the
Committee in connection with the grant of Restricted Stock, Performance Units or
Bonus Awards. In the case of Qualified-Performance Based Awards, (i) such goals
shall be based on the attainment of one or any combination of the following:
specified levels of earnings per share from continuing operations, EBITDA,
operating income, revenues, return on operating assets, return on equity,
profits, total shareholder return (measured in terms of stock price appreciation
and/or dividend growth), and/or stock price, with respect to the Corporation or
such subsidiary, division or department of the Corporation for or within which
the participant performs services and that are intended to qualify under Section
162(m)(4)(c) of the Code and (ii) such Performance Goals shall be set by the
Committee within the time period prescribed by Section 162(m) of the Code and
related regulations. Such Performance Goals also may be based upon the attaining
of specified levels of Corporation performance under one or more of the measures
described above relative to the performance of other corporations.
(w) "PERFORMANCE UNITS" means an award made pursuant to Section 8.
(x) "PLAN" means the USA Networks, Inc. 2000 Stock and Annual Incentive
Plan, as set forth herein and as hereinafter amended from time to time.
A-2
(y) "PLAN YEAR" means the calendar year or, with respect to Bonus Awards,
the Corporation's fiscal year if different.
(z) "QUALIFIED PERFORMANCE-BASED AWARD" means an Award designated as such
by the Committee at the time of grant, based upon a determination that (i) the
recipient is or may be a "covered employee" within the meaning of Section
162(m)(3) of the Code in the year in which the Company would expect to be able
to claim a tax deduction with respect to such Awards and (ii) the Committee
wishes such Award to qualify for the Section 162(m) Exemption.
(aa) "RESTRICTED STOCK" means an award granted under Section 7.
(bb) "RETIREMENT" means Normal or Early Retirement.
(cc) "SECTION 162(M) EXEMPTION" means the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in Section
162(m)(4)(C) of the Code.
(dd) "STOCK APPRECIATION RIGHT" means a right granted under Section 6.
(ee) "STOCK OPTION" means an option granted under Section 5.
(ff) "TERMINATION OF EMPLOYMENT" means the termination of the
participant's employment with the Corporation and any subsidiary or Affiliate. A
participant employed by a subsidiary or an Affiliate shall also be deemed to
incur a Termination of Employment if the subsidiary or Affiliate ceases to be
such a subsidiary or an Affiliate, as the case may be, and the participant does
not immediately thereafter become an employee of the Corporation or another
subsidiary or Affiliate. Temporary absences from employment because of illness,
vacation or leave of absence and transfers among the Corporation and its
subsidiaries and Affiliates shall not be considered Terminations of Employment.
In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.
SECTION 2. Administration
The Plan shall be administered by the Compensation/Benefits Committee or
such other committee of two or more directors as the Board may from time to time
designate (the "COMMITTEE"), which shall be appointed by and serve at the
pleasure of the Board.
The Committee shall have plenary authority to grant Awards pursuant to the
terms of the Plan to officers and employees of the Corporation and its
subsidiaries and Affiliates.
Among other things, the Committee shall have the authority, subject to the
terms of the Plan:
(a) To select the officers and employees, to whom Awards may from time
to time be granted;
(b) Determine whether and to what extent Incentive Stock Options,
Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Units and Bonus Awards or any combination thereof are to be granted
hereunder;
(c) Determine the number of shares of Common Stock to be covered by each
Award granted hereunder;
(d) Determine the terms and conditions of any Award granted hereunder
(including, but not limited to, the option price (subject to Section 5(a)), any
vesting condition, restriction or limitation (which may be related to the
performance of the participant, the Corporation or any subsidiary or Affiliate)
and any
A-3
vesting acceleration or forfeiture waiver regarding any Award and the shares of
Common Stock relating thereto, based on such factors as the Committee shall
determine;
(e) Modify, amend or adjust the terms and conditions of any Award, at
any time or from time to time, including but not limited to Performance Goals;
provided, however, that the Committee may not adjust upwards the amount payable
to a designated Covered Employee with respect to a particular award upon the
satisfaction of applicable Performance Goals;
(f) Determine to what extent and under what circumstances Common Stock
and other amounts payable with respect to an Award shall be deferred; and
(g) Determine under what circumstances an Award may be settled in cash
or Common Stock under Sections 5(j), 8(b)(i), 10(b), and 11(a)(iii).
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then in office,
except that the members thereof may (i) delegate to an officer of the
Corporation the authority to make decisions pursuant to paragraphs (c), (f),
(g), (h) and (i) of Section 5 (provided that without approval by the Board no
such delegation may be made that would cause Awards or other transactions under
the Plan to cease to be exempt from Section 16(b) of the Exchange Act) and (ii)
authorize any one or more of their number or any officer of the Corporation to
execute and deliver documents on behalf of the Committee. Any action permitted
to be taken by the Committee under the Plan may be taken by the full Board in
its discretion, and in such case the Board shall be treated as the Committee
hereunder.
Any determination made by the Committee or pursuant to delegated authority
pursuant to the provisions of the Plan with respect to any Award shall be made
in the sole discretion of the Committee or such delegate at the time of the
grant of the Award or, unless in contravention of any express term of the Plan,
at any time thereafter. All decisions made by the Committee or any appropriately
delegated officer pursuant to the provisions of the Plan shall be final and
binding on all persons, including the Corporation and Plan participants.
SECTION 3. Common Stock Subject To Plan
The total number of shares of Common Stock reserved and available for
grant under the Plan shall be 20,000,000. No participant may be granted Awards
pursuant to the Plan covering in excess of 16,000,000 shares of Common Stock
over the life of the Plan. Shares subject to an Award under the Plan may be
authorized and unissued shares or may be treasury shares.
If any shares of Restricted Stock are forfeited for which the participant
did not receive any benefits of ownership (as such phrase is construed by the
Commission or its staff), or if any Stock Option (and related Stock Appreciation
Right, if any) terminates without being exercised, or if any Stock Appreciation
Right is exercised for cash, shares subject to such Awards shall again be
available for distribution in connection with Awards under the Plan.
In the event of any change in corporate capitalization (including, but not
limited to, a change in the number of shares of Common Stock outstanding), such
as a stock split or a corporate transaction, such as any merger, consolidation,
separation, including a Spin-off, or other distribution of stock or property of
the Corporation, any reorganization (whether or not such reorganization comes
within the definition of such term in Section 368 of the Code) or any partial or
complete liquidation of the Corporation, the Committee or Board may make such
substitution or adjustments in the aggregate number and kind of shares reserved
for issuance under the Plan and the maximum limitation upon Awards to be granted
to any participant, in
A-4
the number, kind and option price of shares subject to outstanding Stock Options
and Stock Appreciation Rights, in the number and kind of shares subject to other
outstanding Awards granted under the Plan and/or such other equitable
substitution or adjustments as it may determine to be appropriate in its sole
discretion; provided, however, that the number of shares subject to any Award
shall always be a whole number. In the event of a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation, the Board shall be authorized to cause the Corporation to issue or
assume stock options, whether or not in a transaction to which Section 424(a) of
the Code applies, by means of substitution of new stock options for previously
issued stock options or an assumption of previously issued stock options. In
such event, the aggregate number of shares of the Stock available for issuance
under Awards under Section 3 will be increased to reflect such substitution or
assumption.
SECTION 4. Eligibility
Persons who serve or agree to serve as officers, employees, directors or
consultants of the Corporation (including prospective officers or employees),
its subsidiaries and Affiliates who are responsible for or contribute to the
management, growth and profitability of the business of the Corporation, its
subsidiaries and Affiliates are eligible to be granted Awards under the Plan.
SECTION 5. Stock Options
Stock Options may be granted alone or in addition to other Awards granted
under the Plan and may be of two types: Incentive Stock Options and Nonqualified
Stock Options. Any Stock Option granted under the Plan shall be in such form as
the Committee may from time to time approve.
The Committee shall have the authority to grant any participant Incentive
Stock Options, Nonqualified Stock Options or both types of Stock Options (in
each case with or without Stock Appreciation Rights); provided, however, that
grants hereunder are subject to the aggregate limit on grants to individual
participants set forth in Section 3. Incentive Stock Options may be granted only
to employees of the Corporation and its "subsidiaries" and "parent", if any
(within the meaning of Section 424(f) of the Code). To the extent that any Stock
Option is not designated as an Incentive Stock Option or even if so designated
does not qualify as an Incentive Stock Option, it shall constitute a
Nonqualified Stock Option.
Stock Options shall be evidenced by option agreements, the terms and
provisions of which may differ. An option agreement shall indicate on its face
whether it is intended to be an agreement for an Incentive Stock Option or a
Nonqualified Stock Option. The grant of a Stock Option shall occur on the date
the Committee by resolution selects an individual to be a participant in any
grant of a Stock Option, determines the number of shares of Common Stock to be
subject to such Stock Option to be granted to such individual and specifies the
terms and provisions of the Stock Option. The Corporation shall notify a
participant of any grant of a StockOption, and a written option agreement or
agreements shall be duly executed and delivered by the Corporation to the
participant. Such grant shall become effective upon the date of grant (subject
to conditions set forth therein), and the execution of the option agreements(s)
may occur following the grant of the Stock Option.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Committee shall deem desirable:
(a) OPTION PRICE. The option price per share of Common Stock purchasable
under a Stock Option shall be determined by the Committee and set forth in the
option agreement, and shall not be less than the Fair Market Value of the Common
Stock subject to the Stock Option on the date of grant.
(b) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than 10 years
after the date the Incentive Stock Option is granted.
A-5
(c) EXERCISABILITY. Except as otherwise provided herein, Stock Options
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part, based
on such factors as the Committee may determine. In addition, the Committee may
at any time accelerate the exercisability of any Stock Option.
(d) METHOD OF EXERCISE. Subject to the provisions of this Section 5,
Stock Options may be exercised, in whole or in part, at any time during the
option term by giving written notice of exercise to the Corporation specifying
the number of shares of Common Stock subject to the Stock Option to be
purchased.
Such notice shall be accompanied by payment in full of the purchase price
by certified or bank check or such other instrument as the Corporation may
accept. If approved by the Committee, payment, in full or in part, may also be
made in the form of unrestricted Common Stock already owned by the optionee of
the same class as the Common Stock subject to the Stock Option (based on the
Fair Market Value of the Common Stock on the date the Stock Option is
exercised); provided, however, that, in the case of an Incentive Stock Option
the right to make a payment in the form of already owned shares of Common Stock
of the same class as the Common Stock subject to the Stock Option may be
authorized only at the time the Stock Option is granted.
In the discretion of the Committee, payment for any shares subject to a
Stock Option may also be made by delivering a properly executed exercise notice
to the Corporation, together with a copy of irrevocable instructions to a broker
to deliver promptly to the Corporation the amount of sale or loan proceeds from
shares of Common Stock owned by the optionee necessary to pay the purchase
price, and, if requested, to pay the amount of any federal, state, local or
foreign withholding taxes. To facilitate the foregoing, the Corporation may
enter into agreements for coordinated procedures with one or more brokerage
firms.
In addition, in the discretion of the Committee, payment for any shares
subject to a Stock Option may also be made by instructing the Committee to
withhold a number of such shares having a Fair Market Value on the date of
exercise equal to the aggregate exercise price of such Stock Option.
No shares of Common Stock shall be issued until full payment therefor has
been made. An optionee shall have all of the rights of a shareholder of the
Corporation holding the class or series of Common Stock that is subject to such
Stock Option (including, if applicable, the right to vote the shares and the
right to receive dividends), when the optionee has given written notice of
exercise, has paid in full for such shares and, if requested, has given the
representation described in Section 14(a).
(e) NONTRANSFERABILITY OF STOCK OPTIONS. No Stock Option shall be
transferable by the optionee other than (i) by will or by the laws of descent
and distribution; or (ii) in the case of a Nonqualified Stock Option, pursuant
to (a) a qualified domestic relations order (as defined in the Code, or the
regulations thereunder), (b) a gift to such optionee's immediate family or other
specified individuals or entities, whether directly or indirectly or by means of
a trust, partnership, limited liability corporation or otherwise, if expressly
permitted under the applicable option agreement or (c) a gift to a charitable
organization, if expressly permitted under the applicable option agreement. All
Stock Options shall be exercisable, subject to the terms of this Plan, during
the optionee's lifetime, only by the optionee or any person to whom the Stock
Option is transferred by will or the laws of descent and distribution or, in the
case of a Nonqualified Stock Option, pursuant to a qualified domestic relations
order or a gift permitted under the applicable option agreement. For purposes of
this Section 5(e), "immediate family" shall mean, except as otherwise defined by
the Committee, the optionee's spouse, children, siblings, stepchildren,
grandchildren, parents, stepparents, grandparents, in-laws and persons related
by legal adoption. Such transferees may transfer a Stock Option only by will or
the laws of descent and distribution.
(f) TERMINATION BY DEATH. Unless otherwise determined by the Committee
(in the option agreement or otherwise), if an optionee's Termination of
Employment is by reason of death, any Stock
A-6
Option held by such optionee may thereafter be exercised, to the extent then
exercisable, or on such accelerated basis as the Committee may determine, for a
period of one year (or such other period as the Committee may specify in the
option agreement) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
(g) TERMINATION BY REASON OF DISABILITY. Unless otherwise determined by
the Committee (in the option agreement or otherwise), if an optionee's
Termination of Employment is by reason of Disability, any Stock Option held by
such optionee may thereafter be exercised by the optionee, to the extent it was
exercisable at the time of termination, or on such accelerated basis as the
Committee may determine, for a period of 3 years from the date of such
Termination of Employment or until the expiration of the stated term of such
Stock Option, whichever period is the shorter; provided, however, that if the
optionee dies within such period, any unexercised Stock Option held by such
optionee shall, notwithstanding the expiration of such period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In the event
of Termination of Employment by reason of Disability, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
(h) TERMINATION BY REASON OF RETIREMENT. Unless otherwise determined by
the Committee (in the option agreement or otherwise), if an optionee's
Termination of Employment is by reason of Retirement, any Stock Option held by
such optionee may thereafter be exercised by the optionee, to the extent it was
exercisable at the time of such Retirement, or on such accelerated basis as the
Committee may determine, for a period of 5 years from the date of such
termination of employment or until the expiration of the stated term of such
Stock Option, whichever period is the shorter; provided, however, that if the
optionee dies within such period any unexercised Stock Option held by such
optionee shall, notwithstanding the expiration of such period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In the event
of Termination of Employment by reason of Retirement, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
(i) OTHER TERMINATION. Unless otherwise determined by the Committee (in
the option agreement or otherwise): (A) if an optionee incurs a Termination of
Employment for Cause, all Stock Options held by such optionee shall thereupon
terminate; and (B) if an optionee incurs a Termination of Employment for any
reason other than death, Disability, Retirement or Cause, any Stock Option held
by such optionee, to the extent then exercisable, or on such accelerated basis
as the Committee may determine, may be exercised for the lesser of 3 months from
the date of such Termination of Employment or the balance of such Stock Option's
term; provided, however, that if the optionee dies within such three-month
period, any unexercised Stock Option held by such optionee shall,
notwithstanding the expiration of such 3-month period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
Notwithstanding the foregoing, unless otherwise determined by the Committee (in
the option agreement or otherwise), if an optionee incurs a Termination of
Employment at or after a Change in Control (as defined Section 11(b)), other
than by reason of death, Disability or Retirement, any Stock Option held by such
optionee shall be exercisable for the lesser of (1) 6 months and one day from
the date following such Termination of Employment, and (2) the balance of such
Stock Option's term. In the event of Termination of Employment, if an Incentive
Stock Option is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, such Stock Option will thereafter
be treated as a Nonqualified Stock Option.
(j) CASHING OUT OF STOCK OPTION. On receipt of written notice of
exercise, the Committee may elect to cash out all or part of the portion of the
shares of Common Stock for which a Stock Option is being exercised by paying the
optionee an amount, in cash or Common Stock, equal to the excess of the Fair
A-7
Market Value of the Common Stock over the option price times the number of
shares of Common Stock for which the Option is being exercised on the effective
date of such cash-out.
(k) CHANGE IN CONTROL CASH-OUT. Notwithstanding any other provision of
the Plan, during the 60-day period from and after a Change in Control (the
"Exercise Period"), unless the Committee shall determine otherwise at the time
of grant, an optionee shall have the right, whether or not the Stock Option is
fully exercisable and in lieu of the payment of the exercise price for the
shares of Common Stock being purchased under the Stock Option and by giving
notice to the Corporation, to elect (within the Exercise Period) to surrender
all or part of the Stock Option to the Corporation and to receive cash, within
10 days of such notice, in an amount equal to the amount by which the Change in
Control Price per share of Common Stock on the date of such election shall
exceed the exercise price per share of Common Stock under the Stock Option (the
"Spread") multiplied by the number of shares of Common Stock granted under the
Stock Option as to which the right granted under this Section 5(k) shall have
been exercised. Notwithstanding the foregoing, if the exercise of any right
granted pursuant to this Section 5(k) would make a Change in Control transaction
ineligible for pooling of interests accounting under APB No. 16 that but for
this Section 5(k) would otherwise be eligible for such accounting treatment, the
Committee shall have the ability to substitute the cash payable pursuant to this
Section 5(k) with Common Stock (or shares of common stock of the entity
surviving the Change in Control transaction, or its parent corporation, if
applicable) with a Fair Market Value equal to the cash that would otherwise be
payable hereunder.
SECTION 6. Stock Appreciation Rights
(a) GRANT AND EXERCISE. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Nonqualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option.
A Stock Appreciation Right may be exercised by an optionee in accordance
with Section 6(b) by surrendering the applicable portion of the related Stock
Option in accordance with procedures established by the Committee. Upon such
exercise and surrender, the optionee shall be entitled to receive an amount
determined in the manner prescribed in Section 6(b). Stock Options which have
been so surrendered shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
(b) TERMS AND CONDITIONS. Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined by the Committee, including the
following:
(i) Stock Appreciation Rights shall be exercisable only at such time
or times and to the extent that the Stock Options to which they relate are
exercisable in accordance with the provisions of Section 5 and this
Section 6.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee
shall be entitled to receive an amount in cash, shares of Common Stock or
both, in value equal to the excess of the Fair Market Value of one share
of Common Stock over the option price per share specified in the related
Stock Option multiplied by the number of shares in respect of which the
Stock Appreciation Right shall have been exercised, with the Committee
having the right to determine the form of payment.
(iii) Stock Appreciation Rights shall be transferable only to
permitted transferees of the underlying Stock Option in accordance with
Section 5(e).
(iv) Upon the exercise of a Stock Appreciation Right, the Stock
Option or part thereof to which such Stock Appreciation Right is related
shall be deemed to have been exercised for the purpose of the limitation
set forth in Section 3 on the number of shares of Common Stock to be
A-8
issued under the Plan, but only to the extent of the number of shares in
respect of which the Stock Appreciation Right has been exercised.
SECTION 7. Restricted Stock
(a) ADMINISTRATION. Shares of Restricted Stock may be awarded either
alone or in addition to other Awards granted under the Plan. The Committee shall
determine the officers and employees to whom and the time or times at which
grants of Restricted Stock will be awarded, the number of shares to be awarded
to any participant (subject to the aggregate limit on grants to individual
participants set forth in Section 3), the conditions for vesting, the time or
times within which such Awards may be subject to forfeiture and any other terms
and conditions of the Awards, in addition to those contained in Section 7(c).
The Committee may, prior to grant, condition the vesting of Restricted
Stock upon the attainment of Performance Goals. The Committee may, in addition
to or instead of requiring satisfaction of Performance Goals, condition vesting
upon the continued service of the participant. The provisions of Restricted
Stock Awards (including the applicable Performance Goals) need not be the same
with respect to each recipient.
(b) AWARDS AND CERTIFICATES. Shares of Restricted Stock shall be
evidenced in such manner as the Committee may deem appropriate, including
book-entry registration or issuance of one or more stock certificates. Any
certificate issued in respect of shares of Restricted Stock shall be registered
in the name of such participant and shall bear an appropriate legend referring
to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) of the USA Networks, Inc. 2000 Stock and
Annual Incentive Plan and a Restricted Stock Agreement. Copies of
such Plan and Agreement are on file at the offices of USA Networks,
Inc."
The Committee may require that the certificates evidencing such shares be held
in custody by the Corporation until the restrictions thereon shall have lapsed
and that, as a condition of any Award of Restricted Stock, the participant shall
have delivered a stock power, endorsed in blank, relating to the Common Stock
covered by such Award.
(c) TERMS AND CONDITIONS. Shares of Restricted Stock shall be subject
to the following terms and conditions:
(i) Subject to the provisions of the Plan and the Restricted Stock
Agreement referred to in Section 7(c)(vi), during the period, if any, set
by the Committee, commencing with the date of such Award for which such
participant's continued service is required (the "Restriction Period"),
and until the later of (i) the expiration of the Restriction Period and
(ii) the date the applicable Performance Goals (if any) are satisfied, the
participant shall not be permitted to sell, assign, transfer, pledge or
otherwise encumber shares of Restricted Stock; provided, that the
foregoing shall not prevent a participant from pledging Restricted Stock
as security for a loan, the sole purpose of which is to provide funds to
pay the option price for Stock Options. Within these limits, the Committee
may provide for the lapse of restrictions based upon period of service in
installments or otherwise and may accelerate or waive, in whole or in
part, restrictions based upon period of service or upon performance;
provided, however, that in the case of Restricted Stock subject to
Performance Goals granted to a participant who is a Covered Employee, the
applicable Performance Goals have been satisfied.
(ii) Except as provided in this paragraph (ii) and Section 7(c)(i)
and the Restricted Stock Agreement, the participant shall have, with
respect to the shares of Restricted Stock, all of the
A-9
rights of a stockholder of the Corporation holding the class or series of
Common Stock that is the subject of the Restricted Stock, including, if
applicable, the right to vote the shares and the right to receive any cash
dividends. If so determined by the Committee in the applicable Restricted
Stock Agreement and subject to Section 14(e) of the Plan, (1) cash
dividends on the class or series of Common Stock that is the subject of
the Restricted Stock Award shall be automatically deferred and reinvested
in additional Restricted Stock, held subject to the vesting of the
underlying Restricted Stock, or held subject to meeting Performance Goals
applicable only to dividends, (2) dividends payable in Common Stock shall
be paid in the form of Restricted Stock of the same class as the Common
Stock with which such dividend was paid, held subject to the vesting of
the underlying Restricted Stock, or held subject to meeting Performance
Goals applicable only to dividends and (3) dividends payable in shares of
a subsidiary of the Corporation upon a Spin-off transaction shall be held
as restricted shares subject to the vesting provisions of the underlying
Restricted Stock.
(iii) Except to the extent otherwise provided in the applicable
Restricted Stock Agreement and Sections 7(c)(i), 7(c)(iv) and 11(a)(ii),
upon a participant's Termination of Employment for any reason during the
Restriction Period or before the applicable Performance Goals are
satisfied, all shares still subject to restriction shall be forfeited by
the participant.
(iv) In the event of a participant's Retirement or a participant's
involuntary Termination of Employment (other than for Cause), the
Committee shall have the discretion to waive, in whole or in part, any or
all remaining restrictions (other than, in the case of Restricted Stock
with respect to which a participant is a Covered Employee, satisfaction of
the applicable Performance Goals unless the participant's employment is
terminated by reason of death or Disability) with respect to any or all of
such participant's shares of Restricted Stock.
(v) If and when any applicable Performance Goals are satisfied and
the Restriction Period expires without a prior forfeiture of the
Restricted Stock, unlegended certificates for such shares shall be
delivered to the participant upon surrender of the legended certificates.
(vi) Each Award shall be confirmed by, and be subject to, the terms
of a Restricted Stock Agreement.
SECTION 8. Performance Units
(a) Performance Units may be awarded either alone or in addition to
other Awards granted under the Plan. The Committee shall determine the officers
and employees to whom and the time or times at which Performance Units shall be
awarded, the number of Performance Units to be awarded to any participant
(subject to the aggregate limit on grants to individual participants set forth
in Section 3), the duration of the Award Cycle and any other terms and
conditions of the Award, in addition to those contained in Section 8(b).
The Committee may condition the settlement of Performance Units upon the
continued service of the participant, the attainment of Performance Goals, or
both. The provisions of such Awards (including the applicable Performance Goals)
need not be the same with respect to each recipient.
(b) TERMS AND CONDITIONS. Performance Units Awards shall be subject to
the following terms and conditions:
(i) Subject to the provisions of the Plan and the Performance Units
Agreement referred to in Section 8(b)(vi), Performance Units may not be
sold, assigned, transferred, pledged or otherwise encumbered during the
Award Cycle. At the expiration of the Award Cycle, the Committee shall
evaluate the Corporation's performance in light of the Performance Goals
for such Award to the extent applicable, and shall determine the number of
Performance Units granted to the participant which have been earned, and
the Committee may then elect to deliver (1) a
A-10
number of shares of Common Stock equal to the number of Performance Units
determined by the Committee to have been earned, or (2) cash equal to the
Fair Market Value of such number of shares of Common Stock to the
participant.
(ii) Except to the extent otherwise provided in the applicable
Performance Unit Agreement and Sections 8(b)(iii) and 11(a)(iii), upon a
participant's Termination of Employment for any reason during the Award
Cycle or before any applicable Performance Goals are satisfied, the rights
to the shares still covered by the Performance Units Award shall be
forfeited by the participant.
(iii) Except to the extent otherwise provided in Section 11(a)(iii),
upon a participant's Termination of Employment (other than for Cause), or
in the event of a participant's Retirement, the Committee shall have the
discretion to waive, in whole or in part, any or all remaining payment
limitations (other than, in the case of Performance Units with respect to
which a participant is a Covered Employee, satisfaction of any applicable
Performance Goals unless the participant's Termination of Employment is by
reason of death or Disability) with respect to any or all of such
participant's Performance Units.
(iv) A participant may elect to further defer receipt of the
Performance Units payable under an Award (or an installment of an Award)
for a specified period or until a specified event, subject in each case to
the Committee's approval and to such terms as are determined by the
Committee (the "Elective Deferral Period"). Subject to any exceptions
adopted by the Committee, such election must generally be made prior to
commencement of the Award Cycle for the Award (or for such installment of
an Award).
(v) If and when any applicable Performance Goals are satisfied and
the Elective Deferral Period expires without a prior forfeiture of the
Performance Units, payment in accordance with Section 8(b)(i) hereof shall
be made to the participant.
(vi) Each Award shall be confirmed by, and be subject to, the terms
of a Performance Unit Agreement.
SECTION 9. Tax Offset Bonuses
At the time an Award is made hereunder or at any time thereafter, the
Committee may grant to the participant receiving such Award the right to receive
a cash payment in an amount specified by the Committee, to be paid at such time
or times (if ever) as the Award results in compensation income to the
participant, for the purpose of assisting the participant to pay the resulting
taxes, all as determined by the Committee and on such other terms and conditions
as the Committee shall determine.
SECTION 10. Bonus Awards
(a) Determination of Awards. The Committee shall determine the total
amount of Bonus Awards for each Plan Year. Prior to the beginning of the Plan
Year (or such later date as may be prescribed by the Internal Revenue Service
under Section 162(m) of the Code), the Committee shall establish Performance
Goals for Bonus Awards for the Plan Year; provided, that such Performance Goals
may be established at a later date for participants who are not Covered
Employees. Bonus amounts payable to any individual participant with respect to a
Plan Year will be limited to a maximum of $10 million. To the extent provided by
the Committee, a participant may elect to defer receipt of amounts payable under
a Bonus Award for a specified period, or until a specified event, subject in
each case to the Committee's approval and to such terms as are determined by the
Committee.
(b) Payment of Awards. Bonus Awards under the Plan shall be paid in
cash or in shares of Common Stock (valued at Fair Market Value as of the date of
payment) as determined by the Committee, as soon as practicable following the
close of the Plan Year, but in any event within 90 days
A-11
following the close of the Plan Year. The Bonus Award for any Plan Year to any
participant may be reduced or eliminated by the Committee in its discretion.
(c) Termination of Employment. A participant shall not be entitled to
receive payment of a Bonus Award, unless the annual Performance Goals for the
Plan Year are satisfied or as otherwise set forth in Section 11, if at any time
prior to the end of the Plan Year the participant has a Termination of
Employment for any reason other than death or Disability.
SECTION 11. Change In Control Provisions
(a) IMPACT OF EVENT. Notwithstanding any other provision of the Plan to
the contrary, upon a Change in Control:
(i) Any Stock Options and Stock Appreciation Rights outstanding as
of the date of such Change in Control, and which are not then exercisable
and vested, shall become immediately fully exercisable and vested.
(ii) The restrictions and deferral limitations applicable to any
Restricted Stock shall immediately lapse, and such Restricted Stock shall
become free of all restrictions and become fully vested and transferable
to the full extent of the original grant.
(iii) All Performance Units shall be considered to be immediately
earned and payable in full, and any deferral or other restriction shall
lapse and such Performance Units shall be settled in cash or shares of
Common Stock, as determined by the Committee, as promptly as is
practicable.
(iv) To the extent determined by the Committee, Bonus Awards may be
paid in whole or in part to participants notwithstanding the attainment of
Performance Goals.
(b) DEFINITION OF CHANGE IN CONTROL. For purposes of the Plan, unless
otherwise provided in an option agreement or other agreement relating to an
Award, a "Change in Control" shall mean the happening of any of the following
events:
(i) The acquisition by any individual entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than
Barry Diller, Liberty Media Corporation, Universal Studios, Inc. and their
respective Affiliates (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of equity
securities of the Corporation representing more than 50% of the voting
power of the then outstanding equity securities of the Corporation
entitled to vote generally in the election of directors (the "Outstanding
Corporation Voting Securities"); provided, however, that for purposes of
this subsection (i), the following acquisitions shall not constitute a
Change of Control: (A) any acquisition by the Corporation, (B) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any corporation controlled by the
Corporation, or (C) any acquisition by any corporation pursuant to a
transaction which complies with clauses (A), (B) and (C) of subsection
(iii); or
(ii) Individuals who, as of February 22, 2000, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to February 22, 2000, whose election, or nomination
for election by the Corporation's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
A-12
(iii) Approval by the stockholders of the Corporation of a
reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Corporation or the purchase
of assets or stock of another entity (a "Business Combination"), in each
case, unless immediately following such Business Combination, (A) all or
substantially all of the individuals and entities who were the beneficial
owners of the Outstanding Corporation Voting Securities immediately prior
to such Business Combination will beneficially own, directly or
indirectly, more than 50% of the then outstanding combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a
result of such transaction owns the Corporation or all or substantially
all of the Corporation's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding
Corporation Voting Securities, (B) no Person (excluding Barry Diller,
Liberty Media Corporation, Universal Studios, Inc. and their Affiliates,
any employee benefit plan (or related trust) of the Corporation or such
corporation resulting from such Business Combination) will beneficially
own, directly or indirectly, more than a majority of the combined voting
power of the then outstanding voting securities of such corporation except
to the extent that such ownership of the Corporation existed prior to the
Business Combination and (C) at least a majority of the members of the
board of directors of the Corporation resulting from such Business
Combination will have been members of the Incumbent Board at the time of
the initial agreement, or action of the Board, providing for such Business
Combination; or
(iv) Approval by the stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation.
(c) CHANGE IN CONTROL PRICE. For purposes of the Plan, "Change in
Control Price" means the higher of (i) the highest reported sales price, regular
way, of a share of Common Stock in any transaction reported on the New York
Stock Exchange Composite Tape or other national exchange on which such shares
are listed or on NASDAQ during the 60-day period prior to and including the date
of a Change in Control or (ii) if the Change in Control is the result of a
tender or exchange offer or a Business Combination, the highest price per share
of Common Stock paid in such tender or exchange offer or Business Combination;
provided, however, that in the case of Incentive Stock Options and Stock
Appreciation Rights relating to Incentive Stock Options, the Change in Control
Price shall be in all cases the Fair Market Value of the Common Stock on the
date the right set forth in Section 5(k) is exercised. To the extent that the
consideration paid in any such transaction described above consists all or in
part of securities or other noncash consideration, the value of such securities
or other noncash consideration shall be determined in the sole discretion of the
Board.
SECTION 12. Term, Amendment And Termination
The Plan will terminate 10 years after the effective date of the Plan;
provided, that the Plan Awards outstanding as of such date shall not be affected
or impaired by the termination of the Plan.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the rights of an
optionee under a Stock Option or a recipient of a Stock Appreciation Right,
Restricted Stock Award, Performance Unit Award or Bonus Award theretofore
granted without the optionee's or recipient's consent. In addition, no such
amendment shall be made without the approval of the Corporation's stockholders
to the extent such approval is required by law or agreement.
The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment shall
impair the rights of any holder of such Award without the holder's consent.
A-13
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules as
well as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.
SECTION 13. Unfunded Status Of Plan
It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Common Stock or make payments; provided, however, that unless the
Committee otherwise determines, the existence of such trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan.
SECTION 14. General Provisions
(a) The Committee may require each person purchasing or receiving
shares pursuant to an Award to represent to and agree with the Corporation in
writing that such person is acquiring the shares without a view to the
distribution thereof. The certificates for such shares may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer.
Notwithstanding any other provision of the Plan or agreements made
pursuant thereto, the Corporation shall not be required to issue or deliver any
certificate or certificates for shares of Common Stock under the Plan prior to
fulfillment of all of the following conditions:
(1) Listing or approval for listing upon notice of issuance, of such
shares on NASDAQ or on the New York Stock Exchange, Inc., or such other
securities exchange as may at the time be the principal market for the
Common Stock;
(2) Any registration or other qualification of such shares of the
Corporation under any state or federal law or regulation or the
maintaining in effect of any such registration or other qualification
which the Committee shall, in its absolute discretion upon the advice of
counsel, deem necessary or advisable; and
(3) Obtaining any other consent, approval, or permit from any state
or federal governmental agency which the Committee shall, in its absolute
discretion after receiving the advice of counsel, determine to be
necessary or advisable.
(b) Nothing contained in the Plan shall prevent the Corporation or any
subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.
(c) Adoption of the Plan shall not confer upon any employee any right
to continued employment, nor shall it interfere in any way with the right of the
Corporation or any subsidiary or Affiliate to terminate the employment of any
employee at any time
(d) No later than the date as of which an amount first becomes
includible in the gross income of the participant for federal income tax
purposes with respect to any Award under the Plan, the participant shall pay to
the Corporation, or make arrangements satisfactory to the Corporation regarding
the payment of, any federal, state, local or foreign taxes of any kind required
by law to be withheld with respect to such amount. Unless otherwise determined
by the Corporation, withholding obligations may be settled with Common Stock,
including Common Stock that is part of the Award that gives rise to the
withholding requirement. The obligations of the Corporation under the Plan shall
be conditional on such payment or arrangements, and the Corporation and its
Affiliates shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment otherwise due to the participant. The Committee may
establish such procedures as it deems appropriate, including making irrevocable
elections, for the settlement of withholding obligations with Common Stock.
A-14
(e) Reinvestment of dividends in additional Restricted Stock at the
time of any dividend payment with respect to Restricted Stock shall only be
permissible if sufficient shares of Common Stock are available under Section 3
for such reinvestment (taking into account then outstanding Stock Options and
other Awards). (f) The Committee shall establish such procedures as it deems
appropriate for a participant to designate a beneficiary to whom any amounts
payable in the event of the participant's death are to be paid or by whom any
rights of the participant, after the participant's death, may be exercised.
(g) In the case of a grant of an Award to any employee of a subsidiary
or other Affiliate of the Corporation, the Corporation may, if the Committee so
directs, issue or transfer the shares of Common Stock, if any, covered by the
Award to the subsidiary or such other Affiliate, for such lawful consideration
as the Committee may specify, upon the condition or understanding that the
subsidiary will transfer the shares of Common Stock to the employee in
accordance with the terms of the Award specified by the Committee pursuant to
the provisions of the Plan.
(h) The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware,
without reference to principles of conflict of laws.
SECTION 15. Effective Date Of Plan
The Plan shall be effective as of February 22, 2000, the date it was
approved by the Board, subject to later approval by the Corporation's
stockholders; provided, however, that no Awards may be exercised or paid out
prior to receipt of such stockholder approval.
A-15