<PAGE> 1
As filed with the Securities and Exchange Commission on April 21, 1995.
Registration Statement No. _____________
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------
HOME SHOPPING NETWORK, INC.
(Exact name of Registrant as specified in its charter)
Delaware 59-2649518
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
2501 118th Avenue North
St. Petersburg, Florida 33716
(Address, including zip code, of Registrant's principal executive offices)
--------------
HOME SHOPPING NETWORK, INC.
EMPLOYEE EQUITY PARTICIPATION PLAN
(Full title of the Plan)
--------------
Barry S. Augenbraun, Esq.
Executive Vice President, General Counsel and Secretary
2501 118th Avenue North
St. Petersburg, Florida 33716
(813) 572-8585
(Name, address, including zip code, and telephone number
including area code, of agent for service)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Title of securities Amount to be Proposed maximum Proposed maximum
to be registered(1) registered(1) offering price maximum aggregate Amount of
per share (2) offering price(2) registration fee
<S> <C> <C> <C> <C>
Common Stock 499,468 $6.75 $3,371,409 $1,162.55
Shares
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as amended,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) Pursuant to Rule 457 under the Securities Act of 1933, as amended, the
proposed maximum offering price per share and the proposed maximum
aggregate offering price are estimated solely for purposes of
calculating the registration fee and are based upon the average of the
high and low prices of the Common Stock of the Registrant on the New
York Stock Exchange on April 18, 1995.
Approximate date of proposed sales pursuant to the plan:
As soon as practicable after this Registration Statement becomes effective.
<PAGE> 2
Item 3. Incorporation of Documents by Reference
The following documents filed by Home Shopping Network, Inc. (the
"Company") with the U.S. Securities and Exchange Commission ("SEC") are
incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31,
1994.
2. All other reports filed pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 ("Exchange Act") since
December 31, 1994.
3. The description of the Company's Common Stock contained in the
Company's Form S-8 Registration Statement No. 33-52869, filed
on March 29, 1994 pursuant to Section 12 of the Exchange Act
and all amendments thereto or reports filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference into this Registration Statement and to be a
part hereof from the date of filing of such documents. Any statement contained
herein or in a document, all or a portion of which is incorporated or deemed to
be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement. The Company will provide, without charge, to each person to whom
this Registration Statement is delivered, upon written or oral request, (1) a
copy of any information that has been incorporated by reference, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into the documents which this Registration Statement incorporates)
and (2) a copy of the Company's most recent Annual Report to Stockholders.
Requests should be directed to Kevin J. McKeon, Senior Vice President of
Accounting and Finance, Home Shopping Network, Inc., P.O. Box 9090, Clearwater,
Florida 34618-9090.
2
<PAGE> 3
Item 6. Indemnification of Directors and Officers
Subsection (a) of Section 145 of the General Corporation Law of the
State of Delaware empowers a corporation to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or a proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suits by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted
under similar standards, except that no indemnification may be made in respect
of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Section 145 further provides that to the extent a director or officer
of a corporation has been successful on the merits or otherwise in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) of
Section 145 in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith; that indemnification
provided for by Section 145 shall not be deemed exclusive of any other rights
to which the indemnified party may be entitled; and
3
<PAGE> 4
empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such whether or not the corporation would have the power to indemnify against
such liabilities under Section 145.
The Restated Certificate of Incorporation of the Company provides the
Company with the authority to indemnify directors, officers, employees and
agents of the Company to the full extent allowed by the laws of the State of
Delaware as those laws exist now or as they may hereafter be amended. In
addition, the stockholders of the Company have approved the execution by the
Company of indemnification agreements with directors, and officers, to the same
extent as would otherwise be available to the indemnified parties if the
Company had directors and officers liability insurance. Indemnification
agreements have been executed by the Company and each member of the Board of
Directors and certain officers of the Company.
See Item 9 for the Company's undertaking with respect to
indemnification.
Item 8. Exhibits
4.1 Home Shopping Network, Inc. Employee Equity Participation Plan
4.2 Home Shopping Network, Inc. Employee Equity Participation Plan
Agreement and Declaration of Trust
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Deloitte & Touche LLP
24 Powers of Attorney (set forth on Signature page).
Item 9. Undertakings
The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933 ("1933 Act");
4
<PAGE> 5
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
Provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(b) That, for the purpose of determining any liability under the 1933 Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X are not set forth in the Prospectus, to deliver, or cause to be
delivered to each person to whom the Prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
Prospectus to provide such interim financial information.
5
<PAGE> 6
Insofar as indemnification for liabilities under the 1933 Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes that, in lieu of a response to
Item 8 above with respect to an opinion of counsel concerning compliance with
the requirements of the Employee Retirement Income Security Act of 1974, as
amended, or an Internal Revenue Service ("IRS") determination letter that the
plan is qualified under Section 401 of the Internal Revenue Code of 1986, as
amended ("Internal Revenue Code"), the Registrant has submitted or will submit
the plan and any amendment thereto to the IRS in a timely manner for a
determination letter that the plan is qualified under Section 401 of the
Internal Revenue Code and will make all changes required by the IRS necessary
to qualify the plan under Section 401 of the Internal Revenue Code.
6
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Petersburg, State of Florida, on this 13th day
of April, 1995.
HOME SHOPPING NETWORK, INC.
By: /s/ Gerald F. Hogan
-----------------------
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Gerald F. Hogan and Kevin J. McKeon, his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments, including post-effective
amendments, to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any other regulatory authority, granting
unto said attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact
and agent, or his substitute, may lawfully do or cause to be done by virtue
hereof.
<TABLE>
<S> <C> <C>
/s/ Gerald F. Hogan President, Chief April 13, 1995
- -------------------- Executive Officer and
Gerald F. Hogan Director (Principal
Executive Officer)
/s/ Kevin J. McKeon Senior Vice President April 13, 1995
- -------------------- of Accounting & Finance
Kevin J. McKeon and Treasurer
(Principal Financial
Officer)
/s/ Brian J. Feldman Controller (Chief April 13, 1995
- -------------------- Accounting Officer)
Brian J. Feldman
</TABLE>
7
<PAGE> 8
<TABLE>
<S> <C> <C>
/s/ Robert R. Bennett Director April 13, 1995
- ---------------------
Robert R. Bennett
/s/ John M. Draper Director April 13, 1995
- ---------------------
John M. Draper
/s/ David F. Dyer Director April 13, 1995
- ---------------------
David F. Dyer
Director
- ---------------------
J. Anthony Forstmann
Director
- ---------------------
Leo J. Hindery, Jr.
/s/ George C. McNamee Director April 13, 1995
- ---------------------
George C. McNamee
</TABLE>
8
<PAGE> 9
Pursuant to the requirements of the Securities Act of 1933, the
trustee has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, on April 17, 1995.
HOME SHOPPING NETWORK, INC.
EMPLOYEE EQUITY PARTICIPATION PLAN
PNC BANK, KENTUCKY, INC.
BY: /s/ Brenda Higgins
--------------------
Brenda Higgins
Vice President and
Trust Officer
9
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT PAGE
- ------- ----------------------- ----
<S> <C>
4.1 Home Shopping Network, Inc.
Employee Equity Participation Plan
4.2 Home Shopping Network, Inc.
Employee Equity Participation Plan Agreement
and Declaration of Trust
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Deloitte & Touche LLP
24 Powers of Attorney (set forth on
Signature page).
</TABLE>
<PAGE> 1
EXHIBIT 4.1
HOME SHOPPING NETWORK, INC.
EMPLOYEE EQUITY PARTICIPATION PLAN
<PAGE> 2
HOME SHOPPING NETWORK, INC.
EMPLOYEE EQUITY PARTICIPATION PLAN
<TABLE>
<PAGE>M
Table Of Contents
<S> <C> <C>
ARTICLE I Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II Name and Purpose of the Plan and the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV Eligibility and Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V Contributions to the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI Participants' Account and Allocation
of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VII Top Heavy Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VIII Benefits Under the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE IX Payment of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE X Voting and Exercising Other Rights
of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE XI Valuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XII Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE XIII Trust Fund and Expenses of Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE XIV Amendment and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XV Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
i
<PAGE> 3
HOME SHOPPING NETWORK, INC.
EMPLOYEE EQUITY PARTICIPATION PLAN
This HOME SHOPPING NETWORK, INC. EMPLOYEE EQUITY PARTICIPATION PLAN
hereby adopted this 28th day of December 2, 1994, by HOME SHOPPING NETWORK,
INC., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company desires to establish and maintain an employee stock
ownership plan for the benefit of its employees and the employees of its
Affiliates which adopt this Plan and who shall qualify as participants
hereunder; and
WHEREAS, the Company's securities are traded on an established
securities market; and
WHEREAS, the Company intends to contribute its securities to the Trust
Fund solely for the benefit of its employees and those of its Affiliates
who adopt this plan and who qualify hereunder.
NOW, THEREFORE, the Company hereby establishes an employee stock
ownership plan upon the following terms:
ARTICLE I
Definitions
(a) "Account" means the Participant's Company Stock Account.
(b) "Allocation Date" means December 31 of such Plan Year.
(c) "Administrator" shall mean the Plan Administrator.
(d) "Affiliate" or "Affiliates" shall mean, with
respect to an Employer, any corporation other than such Employer that is a
member of a controlled group of corporations, within the meaning of Section
414(b) of the Code, of which such Employer is a member; all other trades or
businesses (whether or not incorporated) under common control, within the
meaning of Section 414(c) of the Code, with such Employer; any service
organization other than such Employer that is a member of an affiliated service
group, within the meaning of Section 414(m) of the Code, of which such Employer
is a member; and any other organization that is required to be aggregated with
such Employer under Section 414(o) of the Code. For purposes of determining the
limitations on Annual Additions, the special rules of Section 415(h) of the Code
shall apply.
(e) "Annual Additions" shall mean, with respect to a
Limitation Year, the sum of:
1
<PAGE> 4
(1) the amount of Employer contributions (including
elective contributions) allocated to the Participant under any defined
contribution plan maintained by an Employer or an Affiliate;
(2) the amount of the Employee's contributions (other than
rollover contributions, if any) to any contributory defined contribution plan
maintained by an Employer or an Affiliate;
(3) any Forfeitures allocated to the Participant under any
defined contribution plan maintained by an Employer or an Affiliate; and
(4) amounts allocated to an individual medical account,
as defined in Section 415(l)(2) of the Code that is part of a pension or
annuity plan maintained by an Employer or an Affiliate, and amounts derived from
contributions that are attributable to post-retirement medical benefits
allocated to the separate account of a Key Employee (as defined in Section
419A(d)(3) of the Code) under a welfare benefit plan (as defined in Section
419(e) of the Code) maintained by an Employer or an Affiliate; provided,
however, the percentage limitation set forth in paragraph (e)(1) of Article VI
shall not apply to: (A) any contribution for medical benefits (within the
meaning of Section 419A(f)(2) of the Code) after separation from service which
is otherwise treated as an "Annual Addition," or (B) any amount otherwise
treated as an "Annual Addition" under Section 415(l)(1) of the Code.
(f) "Authorized Leave of Absence" shall mean an unpaid
temporary cessation from active employment with the Employer pursuant to a
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
(g) "Beneficiary" or "Beneficiaries" shall mean the person or
persons to whom the share of a deceased Participant is payable as provided in
paragraph (d)(2) of Article VIII.
(h) "Board of Directors" and "Board" shall mean the board of
directors of the Company or, when required by the context, the board of
directors of an Employer other than the Company.
(i) "Code" shall mean the Internal Revenue Code of 1986, as
amended, or any successor statute. Reference to a specific section of the Code
shall include a reference to any successor provision.
(j) "Company" shall mean Home Shopping Network, Inc., and its
successors.
(k) "Company Stock" means common stock issued by the Company (or by
a corporation which is a member of the controlled group of corporations of which
the Company is a member) which is readily tradeable on an established securities
market. If there is no common stock which meets the foregoing requirement, the
term "Company Stock"
2
<PAGE> 5
means common stock issued by the Company (or by a corporation which is a member
of the same controlled group) having a combination of voting power and
dividend rights equal to or in excess of: (A) that class of common stock of the
Company (or of any such corporation) having the greatest voting power, and (B)
that class of stock of the Company (or any other such corporation) having the
greatest dividend rights. Noncallable preferred stock shall be deemed to be
"Company Stock" if such stock is convertible at any time into stock which
constitutes "Company Stock" hereunder and if such conversion is at a conversion
price which (as of the date of the acquisition by the Trust) is reasonable. For
purposes, of the preceding sentence, pursuant to regulations, preferred stock
shall be treated as noncallable if after the call there will be a reasonable
opportunity for a conversion which meets the requirements of the preceding
sentence.
(l) "Company Stock Account" means the account of a Participant which
is credited with the shares of Company Stock purchased and paid for by the Trust
Fund or contributed to the Trust Fund pursuant to paragraph (a) of Article V.
(m) (1) "Compensation" shall mean the regular salaries and
wages, commissions, bonuses and overtime pay paid by an Employer (as
determined for federal income tax purposes and reported on IRS Form W-2)
and elective contributions under a Section 401(k) plan or a plan
described in Section 125 of the Code, but shall not include disability
payments, stock options, stock awards, relocation expense payments,
credits or benefits under this Plan, any amount contributed to any
pension, employee welfare, life insurance or health insurance plan or
arrangement, or any other fringe benefits, deferred compensation or
welfare benefits. Compensation shall be determined based on the Plan
Year.
(2) To the extent required by law, no Compensation in
excess of $150,000.00 (adjusted under such regulations as may be issued
by the Secretary of the Treasury) shall be taken into account for any
Employee. For purposes of determining whether Compensation exceeds
$150,000.00, if any Employee is a Family Member of a Highly Compensated
Employee who is (i) a 5% owner of an Employer, or (ii) one of the ten
Highly Compensated Employees paid the greatest amount of Compensation
during the Plan Year, then such Family Member shall not be considered as
a separate Employee and any Compensation paid to such Family Member
shall be treated as if it were paid to or on behalf of the related
Highly Compensated Employee.
(3) For purposes of making allocations of Company
contributions pursuant to Article VI with respect to any Plan Year, no
Compensation paid by an Employer with respect to an Employee prior to
the Employee's first day of participation shall be taken into account.
3
<PAGE> 6
(n) "Effective Date" shall mean December 31, 1994, except as may
otherwise be noted herein.
(o) "Eligible Person" is any Employee other than an Employee who has
been granted stock options under the Company's employee stock option plan or who
has been granted any stock appreciation rights by the Company. Any Employee who
became a Participant and thereafter is granted stock options pursuant to the
Company's stock option plan or is granted any stock appreciation rights shall
continue to vest in any shares allocated to his Account under this Plan but
shall not share in future allocations of Company stock as provided in Article
VI(b) and (e).
(p) "Eligible Participant" means a Participant who has worked at
least one thousand (1,000) Hours of Service with the Employer or an Affiliate
during a Plan Year and is in the employ of an Employer on the Allocation Date.
(q) "Entry Date" shall mean either June 30 or December 31.
(r) "Employee" shall mean any person employed by an Employer or an
Affiliate other than:
(1) a member of a collective bargaining unit if retirement
benefits were a subject of good faith bargaining between such unit and
an Employer, and
(2) a non-resident alien who does not receive earned income
from sources within the United States.
The term "Employee" shall also include any individual required
to be treated as an Employee by reason of Section 414(n) or Section
414(o) of the Code (but only for the purposes specified in such
Sections).
(s) "Employer" shall mean the Company and any Affiliate that
adopts this Plan with the consent of the Company.
(t) "Employment Commencement Date" means the date on which
an Employee performs his first Hour of Service for an Employer.
(u) "Family Member" of a Highly Compensated Employee shall mean such
Employee's spouse, lineal descendant or ascendant, or the spouse of his lineal
descendant or ascendant; provided, however, that for purposes of determining the
limit on a Highly Compensated Employee's Compensation under Section 401(a)(17)
of the Code, the term "Family Member" shall include only the Employee's spouse
and his lineal descendants who have not attained age 19 before the close of the
Plan Year.
(v) "Forfeiture" or "Forfeitures" means that portion of a
Participant's Company Stock Account that is not vested, and which is reallocated
(under paragraph (e) of Article VI) on the dates specified in paragraph (c)(3)
and (4) of Article VIII. Restoration
4
<PAGE> 7
of forfeited amounts shall occur pursuant to paragraph (c)(4)(C) of Article
VIII.
(w) (1) "Highly Compensated Employee" shall mean any Employee
during the Plan Year or the immediately preceding Plan Year (or calendar year,
if elected by the Employer in accordance with Treasury regulations)
(A) who was a 5% owner of an Employer;
(B) whose Section 415 Compensation was more than
$75,000.00 (adjusted under such regulations as may be issued by
the Secretary of the Treasury);
(C) whose Section 415 Compensation was more than
$50,000.00 (adjusted under such regulations as may be issued by
the Secretary of the Treasury), and who was a member of the "top
paid group"; provided, that as used herein, "top paid group"
shall mean all Employees who are in the top 20% of the
Employer's work force on the basis of Section 415 Compensation
paid during the year; provided, further, that for purposes of
determining the number of Employees in the top paid group,
Employees described in Section 414(q)(8) of the Code shall be
excluded; or
(D) who was an officer of an Employer and received
compensation in excess of 50% of the amount in effect under
Section 415(b)(1)(A) of the Code for any such Plan Year.
(i) The number of officers shall be limited
to the lesser of (a) 50 Employees; or (b) the greater of
three (3) Employees or 10% of all Employees. For
purposes of determining the number of officers,
Employees described in Section 414(q)(8) of the Code
shall be excluded, but such Employees shall still be
considered for the purpose of identifying particular
Employees who are officers.
(ii) If an Employer does not have at least
one officer whose Section 415 Compensation is in excess
of 50% of the amount in effect in Section 415(b)(1)(A)
of the Code, then the highest paid officer of the
Employer will be treated as a Highly Compensated
Employee.
(2) In determining who is a Highly Compensated Employee,
Employees who are nonresident aliens and who receive no earned income
(within the meaning of Section 911(d)(2) of the Code) from an Employer
constituting United States source income (within the meaning of Section
861(a)(3) of the Code) shall not be treated as Employees.
5
<PAGE> 8
(3) For purposes of determining who is a Highly Compensated
Employee, an Employer and any Affiliate shall be taken into account as a
single Employer.
(4) For purposes of this paragraph, the determination of
Section 415 Compensation shall be based only on Section 415 Compensation
that is actually paid and shall be made by including elective or salary
reduction contributions to a plan described in Section 125 of the Code,
a plan described in Section 401(k) of the Code, a simplified employee
pension described in Section 408(k) of the Code or a plan described in
Section 403(b) of the Code.
(5) The term "Highly Compensated Employee" shall also mean
any former Employee who separated from service (or was deemed to have
separated from service) prior to the Plan Year, performs no service for
an Employer during the Plan Year, and was an actively employed Highly
Compensated Employee in the separation year or any Plan Year ending on
or after the date the Employee attained age 55.
(6) For purposes of determining whether a Participant is a
Highly Compensated Employee, if any Employee is a Family Member of a
Highly Compensated Employee who is (A) a 5% owner of an Employer, or (B)
one of the ten Highly Compensated Employees paid the greatest amount of
Compensation during the Plan Year, then such Family Member shall not be
considered as a separate Employee and any Compensation paid to such
Family Member (and any applicable benefit or contribution on behalf of
such Family Member) shall be treated as if it were paid to or on behalf
of the related Highly Compensated Employee.
(x) "Key Employee" shall mean any Employee or former Employee who is
at any time during the Plan Year (or was at any time during the four preceding
Plan Years) (1) an officer of an Employer (within the meaning of Section
416(i)(1) of the Code) having an aggregate annual compensation from the Employer
and its Affiliates in excess of 50% of the amount in effect under Section
415(b)(1)(A) of the Code for any Plan Year, (2) one of the ten Employees owning
(or considered as owning) the largest interests in an Employer, owning more than
a 1/2% interest in the Employer, and having an aggregate annual compensation
from the Employer and its Affiliates of more than the limitation in effect under
Section 415(c)(1)(A) of the Code for the calendar year that includes the last
day of the Plan Year (if two Employees have equal interests in an Employer, the
Employees having the greater annual compensation from the Employer shall be
deemed to have a larger interest), (3) a 5% owner of an Employer (within the
meaning of Section 416(i)(1)(B) of the Code) or (4) a 1% owner of an Employer
(within the meaning of Section 416(i)(1)(B) of the Code) having an aggregate
annual compensation from the Employer and its Affiliates of more than
$150,000.00. For purposes of this paragraph the term "compensation" shall mean
an Employee's Section 415 Compensation. The determination of Section 415
Compensation shall be based only on Section 415 Compensation that is actually
paid
6
<PAGE> 9
and shall be made by including elective or salary reduction contributions to a
plan described in Section 125 of the Code, a plan described in Section 401(k)
of the Code, a simplified employee pension described in Section 408(k) of the
Code or a plan described in Section 403(b) of the Code.
(y) "Limitation Year" shall mean the Plan Year.
(z) "Non-Key Employee" shall mean, with respect to any Plan Year, an
Employee or former Employee who is not a Key Employee (including any such
Employee who formerly was a Key Employee).
(aa) "Normal Retirement Date" shall mean the date on which a
Participant attains the age of 65 years.
(ab) "Participant" shall mean any Eligible Person who participates in
the Plan as provided in Article IV and shall include any former employee of an
Employer who was participating in the Plan and who still has a balance in his
Account under the Plan.
(ac) "Plan" shall mean the Home Shopping Network, Inc. Employee
Equity Participation Plan as herein set forth, as it may be amended from time to
time.
(ad) "Plan Administrator" shall mean the Company.
(ae) "Plan Year" shall mean the 12-month period ending on December
31.
(af) "Section 415 Compensation" shall mean wages, salaries, and fees
for professional services and other amounts received (without regard to whether
or not an amount is paid in cash) for personal services actually rendered in the
course of employment with the Employer to the extent that the amounts are
includable in gross income (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a nonaccountable plan (as
described in Section 1.62-2(c) of the Income Tax Regulations), and excluding the
following:
(1) Employer contributions to a plan of deferred
compensation which are not includable in the Employee's gross income for
the taxable year in which contributed, or Employer contributions under a
simplified employee pension plan to the extent such contributions are
deductible by the Employee, or any distributions from a plan of deferred
compensation;
(2) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
7
<PAGE> 10
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired from an Employer under a qualified stock
option plan; and
(4) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Section 403(b) of the Code (whether or not the
contributions are actually excludable from the gross income of the
Employee).
(ag) "Service" means:
(1) "Hour of Service" is defined as:
(A) Any hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These Hours
will be credited to the Employee for the computation period in which the
duties are performed; and
(B) Any hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty or
leave of absence; provided, however, that no more than 501 Hours of
Service shall be credited under this paragraph (1)(B) to an Employee on
account of any single continuous period during which the Employee
performs no duties (whether or not such period occurs in a single
computation period), and no credit shall be awarded for any payment
required by applicable worker's compensation, unemployment compensation
or disability insurance laws or for payments which solely reimburse an
Employee for medical or medical-related expenses. Hours under this
paragraph will be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which is incorporated
herein by this reference.
Notwithstanding anything herein to the contrary, any Employee who is
paid on an hourly basis or who is required to account for his hours of work
shall be credited with Hours of Service based upon his actual hours of work as
reflected by the Employer's books and records. Payments made to Employees for
periods during which no services are performed are to be converted into Hours of
Service as provided by Labor Department Regulations 29 C.F.R. Section
2530.200b-2(b) and (c). Any other Employee required by paragraph (A) or (B)
above to be credited with at least one Hour of Service during his regular
payroll period shall be credited with Hours of Service for that period
determined by the following schedule:
8
<PAGE> 11
<TABLE>
<CAPTION>
Pay Period Hours of Service
---------- ----------------
<S> <C>
Weekly 45
Bi-Weekly 90
Semi-Monthly 95
Monthly 190
</TABLE>
Any award or agreement providing back pay, irrespective of any
mitigation of damages, shall be credited as Hours of Service for the period for
which it is allowed provided that it does not result in duplication of hours
credited under paragraphs (1)(A) and (B) above.
Hours of Service will be credited for employment with other members of
an affiliated service group (under Code Section 414(m)), a controlled group of
corporations (under Code Section 414(b)), or a group of trades or businesses
under common control (under Code Section 414(c)) of which the Employer is a
member, and any other entity required to be aggregated with the Employer
pursuant to Code Section 414(o) and the Regulations thereunder. Hours of
Service will also be credited for any Leased Employee or other shared employee
considered to be an Employee for purposes of this Plan by application of Section
414(n) or Section 414(o) of the Code and the Regulations thereunder and for
service with a predecessor employer if the Employer maintains a plan of the
predecessor Employer.
Solely for purposes of determining whether a Break in Service, as
defined in paragraph (3) below, has occurred in a Plan Year for participation
and vesting purposes, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such absence, or, in any
case in which such hours cannot be determined, eight (8) Hours of Service per
day of such absence. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (A) by reason of the pregnancy
of the individual, (B) by reason of a birth of a child of the individual, (C) by
reason of the placement of a child with the individual in connection with the
adoption of such child by such individual, or (D) for purposes of caring for
such child for a period beginning immediately following such birth or
placement. The Hours of Service credited under this paragraph shall be
credited (A) in the Plan Year in which the absence begins if the crediting is
necessary to prevent a Break in Service in that Year, or (B) in all other
cases, in the following Plan Year.
(2) "Year of Service" A Year of Service is defined as the
twelve (12) consecutive month computation period during which the
Employee completes at least one thousand (1,000) Hours of Service:
(A) For purposes of determining a Year of Service
for an Employee's eligibility to participate in the Plan
pursuant to Article IV(a)(2), the initial eligibility
computation period is the twelve (12) consecutive month period
commencing with the Employee's Employment
9
<PAGE> 12
Commencement Date (or the date an Employee performs his first
Hour of Service following a Break in Service, whichever is
later) during which the Employee completes at least one thousand
(1,000) Hours of Service. All succeeding eligibility
computation periods shall be the Plan Year;
(B) For purposes of measuring Years of Service for
vesting and benefit accrual purposes pursuant to Article
VIII(c), after an Employee's satisfaction of the eligibility
requirements set forth in Article IV, herein, the computation
period shall be the Plan Years beginning with the Plan Year
which includes the Employee's Employment Commencement Date.
Initial Participants, as defined in Article IV(a)(1), will only
be credited with one (1) Year of Service at December 31, 1994,
for purposes of Article VIII(c)(2).
(C) For purposes of determining a Year of Service for
allocating additional shares of Company Stock pursuant to
Article VI(a)(1), the computation period shall be the calendar
year and shall exclude the calendar year which includes the
Employee's Employment Commencement Date.
For vesting purposes no credit shall be given for any Service prior to
January 1, 1994.
(3) "Break in Service" is defined as any twelve (12)
consecutive month computation period during which a Participant fails to
complete more than five hundred (500) Hours of Service with the Employer
or an Affiliate. However, for purposes of determining Breaks in Service
for eligibility, vesting and benefit accrual purposes, the computation
periods shall be the same respective consecutive twelve (12) month
periods used to determine Years of Service pursuant to paragraph (2)
above. Notwithstanding anything herein to the contrary, a Break in
Service shall not commence if the Participant is on an Authorized Leave
of Absence, as defined in paragraph (e) above.
(4) "Separation from Service" is defined as the date on
which an Employee quits, retires, is discharged or dies.
(ah) "Top Heavy Year" means any Plan Year in which the Top Heavy
Tests under Article VII are met.
(ai) "Trust" shall mean the trust established by the Trust Agreement.
(aj) "Trust Agreement" shall mean the agreement providing for the
Trust Fund, as it may be amended from time to time.
(ak) "Trustee" shall mean the individual, individuals or corporation
designated as trustee under the Trust Agreement.
10
<PAGE> 13
(al) "Trust Fund" shall mean the trust fund established under the
Trust Agreement from which the amounts of supplementary compensation provided
for by the Plan are to be paid or are to be funded.
(am) "Valuation Date" shall mean the date specified in paragraph
(a) of Article XI on which the net worth of the assets comprising the Trust
Fund is determined.
ARTICLE II
Name and Purpose of the Plan and the Trust
(a) Name of Plan. The name of the Plan is the Home Shopping
Network, Inc. Employee Equity Participation Plan. The Plan is an employee
stock ownership plan which is intended to satisfy the requirements of Code
Section 4975(e)(7) and Regulation Section 54.4975-11.
(b) Exclusive Benefit. This Plan is created for the sole purpose
of providing benefits to the Participants and enabling them to share in the
growth of their Company. Except as otherwise permitted by law, in no event
shall any part of the principal or income of the Trust be paid to or reinvested
in any Employer or be used for or diverted to any purpose whatsoever other than
for the exclusive benefit of the Participants and their Beneficiaries.
(c) Mistake of Fact. Notwithstanding the foregoing provisions of
paragraph (b), any contribution made by an Employer to this Plan by a mistake
of fact may be returned to the Employer within one year after the payment of
the contribution; and any contribution made by an Employer that is conditioned
upon the deductibility of the contribution under Section 404 of the Code (each
contribution shall be presumed to be so conditioned unless the Employer
specifies otherwise) may be returned to the Employer if the deduction is
disallowed and the contribution is returned (to the extent disallowed) within
one year after the disallowance of the deduction.
(d) Participant's Rights. The establishment of this Plan shall not
be considered as giving any Employee, or any other person, any legal or
equitable right against any Employer, any Affiliate, the Plan Administrator,
the Trustee or the principal or the income of the Trust, except to the extent
otherwise provided by law. The establishment of this Plan shall not be
considered as giving any Employee, or any other person, the right to be
retained in the employ of any Employer or any Affiliate.
(e) Qualified Plan. This Plan and the Trust are intended to
qualify under the Code as a tax-free employees' plan and trust, and the
provisions of this Plan and the Trust should be interpreted accordingly.
11
<PAGE> 14
ARTICLE III
Plan Administrator
(a) Administration of the Plan. The Plan Administrator shall
control and manage the operation and administration of the Plan, except with
respect to investments. The Administrator shall have no duty with respect to
the investments to be made of the funds in the Trust except as may be expressly
assigned to it by the terms of the Trust Agreement.
(b) Powers and Duties. The Administrator shall have complete
control over the administration of the Plan herein embodied, with all powers
necessary to enable it to carry out its duties in that respect. Not in
limitation, but in amplification of the foregoing, the Administrator shall have
the power and discretion to interpret or construe this Plan and to determine
all questions that may arise as to the status and rights of the Participants
and others hereunder.
(c) Direction of Trustee. It shall be the duty of the
Administrator to direct the Trustee with regard to the allocation and the
distribution of the benefits to the Participants and others hereunder.
(d) Summary Plan Description. The Administrator shall prepare or
cause to be prepared a summary plan description (if required by law) and such
periodic and annual reports as are required by law.
(e) Disclosure. At least once each year, the Administrator shall
furnish to each Participant a statement containing the value of his interest in
the Trust Fund and such other information as may be required by law.
(f) Conflict In Terms. The Administrator shall notify each
Employee, in writing, as to the existence of the Plan and Trust and the basic
provisions thereof. In the event of any conflict between the terms of this
Plan and Trust as set forth in this Plan and Trust Agreement and as set forth
in any explanatory booklet or other description, this Plan and Trust Agreement
shall control.
(g) Nondiscrimination. The Administrator shall not take any action
or direct the Trustee to take any action whatsoever that would result in
unfairly benefiting one Participant or group of Participants at the expense of
another or in improperly discriminating between Participants similarly situated
or in the application of different rules to substantially similar sets of
facts.
(h) Records. The Administrator shall keep a complete record of all
its proceedings as such Administrator and all data necessary for the
administration of the Plan. All of the foregoing records and data shall be
located at the principal office of the Administrator.
12
<PAGE> 15
(i) Final Authority. Except to the extent otherwise required by
law, the decision of the Administrator in matters within its jurisdiction shall
be final, binding and conclusive upon each Employer and each Employee, member
and Beneficiary and every other interested or concerned person or party.
(j) Claims.
(1) Claims for benefits under the Plan may be made by a
Participant or a Beneficiary of a Participant on forms supplied by the
Plan Administrator. Written notice of the disposition of a claim shall
be furnished to the claimant by the Administrator within ninety (90)
days after the application is filed with the Administrator, unless
special circumstances require an extension of time for processing, in
which event action shall be taken as soon as possible, but not later
than one hundred eighty (180) days after the application is filed with
the Administrator; and, in the event that no action has been taken
within such ninety (90) or one hundred eighty (180) day period, the
claim shall be deemed to be denied for the purposes of paragraph (2).
In the event that the claim is denied, the denial shall be written in a
manner calculated to be understood by the claimant and shall include
the specific reasons for the denial, specific references to pertinent
Plan provisions on which the denial is based, a description of the
material information, if any, necessary for the claimant to perfect the
claim, an explanation of why such material information is necessary and
an explanation of the claim review procedure.
(2) If a claim is denied (either in the form of a written
denial or by the failure of the Plan Administrator, within the required
time period, to notify the claimant of the action taken), a claimant or
his duly authorized representative shall have sixty (60) days after the
receipt of such denial to petition the Plan Administrator in writing
for a full and fair review of the denial, during which time the
claimant or his duly authorized representative shall have the right to
review pertinent documents and to submit issues and comments in
writing. The Plan Administrator shall promptly review the claim and
shall make a decision not later than sixty (60) days after receipt of
the request for review, unless special circumstances require an
extension of time for processing, in which event a decision shall be
rendered as soon as possible, but not later than one hundred twenty
(120) days after the receipt of the request for review. If such an
extension is required because of special circumstances, written notice
of the extension shall be furnished to the claimant prior to the
commencement of the extension. The decision of the review shall be in
writing and shall include specific reasons for the decision, written in
a manner calculated to be understood by the claimant, with specific
references to the Plan provisions on which the decision is based.
13
<PAGE> 16
(k) Appointment of Advisors. The Administrator may appoint such
accountants, counsel (who may be counsel for an Employer), specialists and
other persons that it deems necessary and desirable in connection with the
administration of this Plan. The Administrator, by action of its Board of
Directors, may designate one or more of its employees to perform the duties
required of the Administrator hereunder.
ARTICLE IV
Eligibility and Participation
(a) Current Employees.
(1) Initial Participants. Any Eligible Person employed
before January 1, 1994 who completes at least one thousand (1,000)
Hours of Service during the calendar year 1994 and attained age 21
shall be eligible to participate on the Effective Date of the Plan.
(2) Future Participants. Any Eligible Person who has not
satisfied the requirements specified in paragraph (1) above, shall
become eligible to participate in the Plan upon completing a Year of
Service and attaining the age of 21. Any such Eligible Person shall
enter the Plan as a Participant, if he is still an employee of an
Employer, on the first Entry Date concurring therewith or next
following his satisfaction of the eligibility requirements.
(b) Former Employees.
(1) An Employee who ceases to be a Participant and who
subsequently reenters the employ of an Employer shall be eligible again
to become a Participant on the date of his reemployment.
(2) An Employee who satisfies the eligibility requirements
set forth above and who terminates employment with an Employer prior to
becoming a Participant will become a Participant on the later of the
Entry Date on which he would have entered the Plan had he not
terminated employment or the date of his reemployment.
ARTICLE V
Contributions to the Trust
(a) Company's Contribution. The Company shall contribute stock or
cash as needed to fulfill the requirements of Article VI paragraphs (a)(1) and
(d) and may contribute Company Stock or cash in such amounts, if any, that the
Company's Board of Directors, in
14
<PAGE> 17
its sole discretion, may authorize and direct to be paid and allocated
as provided in Article VI paragraphs (a)(2) and (b).
(b) Payment. The Company's total annual contribution may be made,
in one or more installments, not later than the due date (including extensions
thereof) for filing the federal income tax return of the Company for its fiscal
year ending with or during the Plan Year for which the contribution is made.
Company Stock shall be valued at its then fair market value.
(c) Maximum Amount of Employer Contributions. The aggregate amount
of contributions made by the Employer shall not exceed the maximum amount
allowable as a deduction for federal income tax purposes for the year of
contribution nor shall the Employer contribute an amount for any Participant
which exceeds the maximum amount allowable under Code Section 415(c).
(d) Employee Contributions. Participants shall not be permitted to
make any contributions to this Plan.
(e) No Duty to Inquire. The Trustee shall have no right or duty to
inquire into the amount of any contribution made by the Company or the method
used in determining the amount of any such contribution, or to collect the
same, but the Trustee shall be accountable only for funds actually received by
it.
ARTICLE VI
Participants' Account and Allocation of Contributions
(a) Initial Allocation.
(1) Initial Participants. The Plan Administrator shall allocate
to the Company Stock Account of each Participant on the Effective Date of the
Plan 100 shares of Company Stock plus 10 shares for each Year of Service of the
Plan Participant in excess of 1. For years before 1988, a calendar year during
which the Participant was continuously employed shall be treated as a Year of
Service regardless of the number of hours worked.
(2) Future Participants. It is intended that each person who
becomes a Participant after the Effective Date receive an initial allocation
equal to the lesser of: (A) 100 shares of Company Stock or (B) shares of
Company Stock which have a value equal to $1,000, with such shares rounded down
to the nearest whole number of shares. If the Company makes discretionary
contributions in addition to the Initial Allocation to Initial Participants of
paragraph (a)(1), such contributions shall first be allocated pro rata to such
Future Participants based on their Entry Dates, with the earliest Entry Date
receiving the first allocation, until such Future Participants shall have been
allocated the whole number of shares of Company Stock originally calculated as
of the Allocation Date contemporaneous with or
15
<PAGE> 18
next following their Entry Date. If such contributions are
made during the Plan Year, which includes the Future Participant's
Entry Date, such Participant need not be employed on the Allocation
Date to share in the allocation provided by this paragraph. If such
contributions are made during any Plan Year subsequent to the Plan Year
which includes the Future Participant's Entry Date, such Participant
must be employed on the Allocation Date to share in the allocation
provided by this paragraph. Any discretionary contributions in excess
of those required to make the allocations provided herein shall be
allocated as provided in paragraph (b) below.
(b) Additional Allocations. If the Company makes discretionary
contributions in addition to the Initial Allocation of paragraph (a), every
Eligible Participant employed on the Allocation Date shall share in the
contribution in proportion to his Compensation relative to the Compensation of
all Eligible Participants employed on that Allocation Date.
(c) Limitation on Allocation of Contributions.
(1) Notwithstanding anything contained in this Plan to the
contrary, the aggregate Annual Additions to a Participant's Account
under this Plan and under any other defined contribution plans
maintained by an Employer or an Affiliate for any Limitation Year shall
not exceed the lesser of $30,000.00 (or, if greater, one quarter of the
dollar limitation in effect under Section 415(b)(1)(A) of the Code) or
25% of the Participant's Section 415 Compensation for such Plan Year.
(2) In the event that the Annual Additions, under the
normal administration of the Plan, would otherwise exceed the limits
set forth above for any Participant, or in the event that any
Participant participates in both a defined benefit plan and a defined
contribution plan maintained by any Employer or any Affiliate and the
aggregate Annual Additions to and projected benefits under all of such
plans, under the normal administration of such plans, would otherwise
exceed the limits provided by law, then the Plan Administrator shall
take such actions, applied in a uniform and nondiscriminatory manner,
as will keep the Annual Additions and projected benefits for such
Participant from exceeding the applicable limits provided by law.
Excess Annual Additions shall be disposed of as provided in paragraph
(3) below. Adjustments shall be made to this Plan, if necessary to
comply with such limits, before any adjustments may be made to any
other Plan.
(3) If as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's Section 415
Compensation, a reasonable error in determining the amount of Employer
contributions that may be made with respect to any Participant under
the limits of Section 415 of the Code, or other circumstances permitted
under Section 415 of the Code, the Annual Additions attributable to
Employer contributions for
16
<PAGE> 19
a particular Participant would cause the limitations
set forth in this paragraph (c) to be exceeded, the excess
amount shall be used to reduce Employer contributions for the
next Plan Year (and succeeding Plan Years, as necessary) for
that Participant if that Participant is covered by the Plan as
of the end of the Plan Year. If the Participant is not covered
by the Plan as of the end of the Plan Year, such excess amount
shall be held unallocated in a suspense account for the Plan
Year and reallocated among the Participants as of the end of
the next Plan Year to all of the Participants in the Plan in
the same manner as an Employer contribution under the terms of
paragraphs (a) and (b) of this Article VI before any further
Employer contributions are allocated to the Accounts of the
Participants, and such allocations shall be treated as Annual
Additions to the Accounts of the Participants. In the event
that the limits on Annual Additions for any Participant would
be exceeded before all of the amounts in the suspense account
are allocated among the Participants, then such excess amounts
shall be retained in the suspense account to be reallocated as
of the end of the next Plan Year and any succeeding Plan Years
until all amounts in the suspense account are exhausted.
(d) Make-Up Allocation. Any Participant who is prevented
from receiving all or any portion of the Initial Allocation of Company
Stock provided by paragraph (a) because of the limitations of paragraph
(c) shall be entitled to an allocation of Company Stock in each
succeeding year in which he is employed on the Allocation Date up to
the limit provided by paragraph (c) until he has received the number of
shares of Company Stock he would have received pursuant to paragraph
(a) but for the limitations of paragraph (c). This paragraph shall not
apply to discretionary allocations pursuant to paragraph (b) above.
(e) Allocation of Forfeitures. Forfeitures arising during
the Plan Year shall be allocated in the following order:
(1) first to Participants who are entitled to
restoration of amounts previously forfeited pursuant to Article
VIII paragraph (c)(4)(C);
(2) second to Participants who are entitled to a
Make-Up Allocation pursuant to Article VI paragraph (d) above;
(3) third to Future Participants who had Entry
Dates in prior Plan Years and were not allocated the full
amount of their Initial Allocation specified in Article VI
paragraph (a)(2), above, and in the same order specified in
that paragraph;
(4) fourth, pursuant to paragraph (a)(2), above,
to any Employees who became Participants during the Plan Year;
and
17
<PAGE> 20
(5) the balance of any Forfeitures shall be
allocated in the same manner as the Company's contribution
under paragraph (b), above.
(f) Allocation of Earnings and Losses. As of each
Allocation Date, the Plan Administrator shall credit or charge each
Participant's Company Stock Account with its own earnings or losses for
the year.
(g) Allocation of Cash Dividends. Cash dividends paid on
Company Stock allocated to a Participant's Company Stock Account shall
be credited to that Participant's Company Stock Account.
ARTICLE VII
Top Heavy Plan
(a) Minimum Allocation of Employer Contribution for Top
Heavy Plan Year. Notwithstanding the foregoing, if the Plan is a Top
Heavy Plan or an Extra Top Heavy Plan for any Plan Year (as determined
by the tests set forth in paragraphs (e)(1) and (e)(2) of this Article
VII), then a participating Non-Key Employee who is in the employ of the
Employer on the last day of the Plan Year shall be entitled to a
minimum contribution in accordance with the following paragraphs:
(1) Only Defined Contribution Plans. If a
Participant participates only in defined contribution plans
maintained by the Employer or any Affiliate, and the
Participant did not receive a contribution under this Plan,
and/or any other defined contribution plan maintained by the
Employer or any Affiliate equal to the lesser of: (i) three
(3%) of the Participant's Section 415 Compensation for the
year, or (ii) the percentage of the Section 415 Compensation
for the Year which is equal to that of the Key Employee for
whom the percentage is the highest, then the aggregate
contribution for the year made by the Employer on behalf of
each Participant and any Forfeitures allocated to his Account
pursuant to this Plan shall be equal to the difference
between:
(A) the lesser of: (1) three percent (3%)
of the Participant's Section 415 Compensation for the
year from the Employer or any Affiliate, or (2) the
percentage of such Section 415 Compensation which is
equal to that of the Key Employee for whom the
percentage is the highest, and
(B) the contribution otherwise provided by
this Plan and all other defined contribution plans
maintained by the Employer or any Affiliate.
(2) Both Defined Benefit and Defined Contribution
Plans. If a Participant is also a participant in a defined
benefit plan maintained by the Employer or any Affiliate, the
minimum benefit
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<PAGE> 21
to which a Participant is entitled shall be provided by, and in
accordance with, the terms of the defined benefit plan.
However, if the defined benefit plan does not provide the
Participant with a minimum accrued benefit equal to three percent (3%)
of the Participant's average annual Section 415 Compensation from the
Employer or any Affiliate for each Top Heavy Year or two percent (2%)
of a Participant's average annual Section 415 Compensation from the
Employer or any Affiliate for each Extra Top Heavy Year, multiplied by
the number of Top Heavy Years or Extra Top Heavy Years (not in excess
of ten (10) Years) during which he was a Participant in both Plans, and
the Participant did not receive a contribution under this Plan and/or
any other defined contribution plan maintained by the Employer or any
Affiliate of at least seven and one-half percent (7 1/2%) of his
Section 415 Compensation from the Employer or any Affiliate for a Top
Heavy Year or five percent (5%) of such Section 415 Compensation for an
Extra Top Heavy Year, the Participant shall be entitled to a minimum
contribution for the year under this Plan. The Participant's minimum
contribution under this Plan shall be a contribution equal to the
difference between:
(A) seven and one-half percent (7 1/2%) of his
Section 415 Compensation from the Employer or any Affiliate for
each Top Heavy Year or five percent (5%) of such Section 415
Compensation for each Extra Top Heavy Year in which he was a
Participant in both Plans, and
(B) the contribution otherwise provided by this
Plan and all other defined contribution plans maintained by the
Employer or any Affiliate.
(3) Rules of Application. The minimum benefit or minimum
contribution shall not be offset by any OASDI benefits received by the
Participant, and any Top Heavy minimum benefits shall be provided by
this Plan only after minimum benefits have been provided by all other
Plans.
(b) Top Heavy Tests.
(1) Top Heavy. The Plan will be Top Heavy during the Plan
Year if the aggregate accounts of the participating Key Employees
determined as of the Determination Date, as provided in paragraph (b)
below, equals or exceeds sixty percent (60%) of the aggregate accounts
of all Participants included within the aggregation group. In any Top
Heavy Year the applicable provisions of paragraph (a) of this Article
VII shall apply and the provisions of this Article VII will supersede
any conflicting provisions of the Plan.
(2) Extra Top Heavy. If the sum of the accounts of the
participating Key Employees equals or exceeds ninety percent (90%) of
the sum of the aggregate accounts of all Participants
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<PAGE> 22
included within an aggregation group of plans, this Plan shall be
considered Extra Top Heavy. If the Plan is Extra Top Heavy, then
paragraph (a) of this Article VII shall apply. In addition,
paragraph (c)(2) of Article VI shall also apply together with the
adjustments required under Section 416(h)(1) of the Code.
(c) Determination Date. The Determination Date for any Plan Year
shall be the last day of the preceding Plan Year, or in the case of the first
Plan Year to which this Article applies, the last day of the first Plan Year.
(d) Aggregation Groups. Each plan maintained by the Employer or
any Affiliate in which a Key Employee participates and any other plan
maintained by those businesses which enables any plan in which a Key Employee
participates to meet the requirements of Code Sections 401(a)(4) or 410, will
be considered a part of the aggregation group. Other plans maintained by the
businesses which are not required to be included in the aggregation group may be
included if the requirements of Code Sections 401(a)(4) and 410 are satisfied
when those plans are considered together with the plans of the required
aggregation group. In the event that two or more Plans within the aggregation
group have different Determination Dates, the present value of all accrued
benefits shall be determined separately at each Plan's Determination Date and
the accrued benefits for each Plan shall then be aggregated based upon the
Determination Dates for each Plan which fall within the same calendar year.
(e) Definitions.
(1) Accrued Benefits. For purposes of this Article the
Accrued Benefits of a Participant, former Participant or Beneficiary
shall include the value of:
(A) the Participant's retirement benefits
provided by his employer as of the most recent Valuation Date
occurring within a twelve (12) month period ending on the
Determination Date, and (i), in the case of any defined
contribution plan maintained by the Employer or any Affiliate,
adjusted to include contributions made by (in the case of any
profit sharing plan) or due from (in the case of any pension
plan) the Employer as of the Determination Date, or (ii), in
the case of any defined benefit plan maintained by the
Employer or any Affiliate, determined as if the Participant
terminated service as of the Determination Date in the first
Plan Year or as if the Participant terminated service on the
Valuation Date for all subsequent Plan Years. The present
value of a Participant's retirement benefits attributable to
any defined benefit plan shall be determined using the
actuarial assumptions set forth with the provisions of such
plan; and
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<PAGE> 23
(B) all distributions made to a Participant
within the Plan Year which includes the Determination Date or
within the four (4) preceding Plan Years, but only to the
extent that the distribution is not included in the value of
the Participant's Account on the Valuation Date.
Distributions of benefits received by a Participant from this
Plan and rollover into another plan maintained the by
Employer or any Affiliate shall not be counted as an accrued
benefit under this Plan. This paragraph (e)(1)(B) shall
include distributions under a terminated plan which if it had
not been terminated would have been required to be included
in the aggregation group as defined in paragraph (c) above.
Notwithstanding anything to the contrary, if any
Employee has not performed services for the Employer or any
Affiliate during the 5-year period ending on any
Determination Date, the accrued benefit of such Employee
shall not be taken into consideration for purposes of
determining whether the Plan is Top-Heavy with respect to the
Plan Year to which the Determination Date applies.
(2) Key Employee Accrued Benefits. The value of the Key
Employee Accrued Benefits shall equal the sum of the aggregate values
of the accrued benefits of all Key Employees and all Beneficiaries of
Key Employees.
(3) Non-Key Employee Accrued Benefit. Solely for
purposes of determining whether the Plan is Top-Heavy, the accrued
benefit of any Non-Key Employee shall be determined (A) under the
method, if any, that uniformly applies for accrual purposes under all
plans of the Employer or any Affiliate, or (B) if there is no such
method, as if such benefit accrued no more rapidly than the lowest
accrual rate permitted under the Fractional Accrual Rule of Section
411(b)(1)(C) of the Code.
(4) Total Accrued Benefits. The value of the Total
Accrued Benefits shall equal the sum of the aggregate value of the
Key Employee Accrued Benefits described above plus the aggregate
value of the accrued benefits of all other Participants, former
Participants and Beneficiaries of plans included within the
aggregation group of plans. The Total Accrued Benefits shall not,
however, include the Account of any Participant, or Beneficiary of a
Participant who was at any time a Key Employee but who is no longer a
Key Employee.
(5) Compensation. For any Plan Year in which the Plan
is Top-Heavy, annual Compensation for purposes of this Article VII
shall mean Section 415 Compensation.
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<PAGE> 24
ARTICLE VIII
Benefits Under the Plan
(a) Retirement Benefit.
(1) A Participant shall be entitled to retire from the
employ of his Employer upon such Participant's Normal Retirement Date.
Until a Participant actually retires from the employ of his Employer,
he shall continue to be treated in all respects as a Participant.
(2) Upon the retirement of a Participant as provided in
paragraph (1), such Participant shall be entitled to a retirement
benefit in an amount equal to 100% of the balance in his Company
Stock Account as of the date of distribution of his benefit.
(b) Disability Benefit.
(1) In the event a Participant's employment with his
Employer is terminated by reason of his total and permanent
disability, such Participant shall be entitled to a disability
benefit in an amount equal to 100% of the balance in his Company
Stock Account as of the date of distribution of his benefit.
(2) Total and permanent disability shall mean the total
incapacity of a Participant to perform the usual duties of his
employment with his Employer and will be deemed to have occurred only
when certified by a physician who is acceptable to the Plan
Administrator and only if such proof is received by the Administrator
within sixty (60) days after the date of the termination of such
Participant's employment.
(c) Termination of Employment Benefit.
(1) In the event a Participant's employment with his
Employer is terminated for reasons other than retirement, total and
permanent disability or death, such Participant shall be entitled to
a termination of employment benefit in an amount equal to his vested
interest in the balance in his Company Stock Account as of the date
of distribution of his benefit.
(2) A Participant's vested interest in his Company Stock
Account shall be a percentage of the balance of such Account as of
the applicable Valuation Date, based upon such Participant's Years of
Service as of the date of the termination of his employment, as
follows:
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<PAGE> 25
TOTAL NUMBER OF VESTED
YEARS OF SERVICE INTEREST
---------------- --------
Less than 1 Year of Service -0-
1 year, but less than 2 years 20%
2 years, but less than 3 years 40%
3 years, but less than 4 years 60%
4 years, but less than 5 years 80%
5 years or more 100%
(3) (A) If the termination of employment results in five
consecutive Breaks in Service, then upon the occurrence of such five
consecutive Breaks in Service, the non-vested interest of the
Participant in his Company Stock Account as of the Valuation Date
concurring with or next following the date of his termination of
employment shall be deemed to be forfeited and such forfeited amount
shall be allocated as provided in paragraph (e) of Article VI. If the
Participant is later reemployed by the Company or an Affiliate, the
unforfeited balance, if any, in his Company Stock Account that has not
been distributed to such Participant shall be set aside in a separate
account, and such Participant's Years of Service after any five
consecutive Breaks in Service resulting from such termination of
employment shall not be taken into account for the purpose of
determining the vested interest of such Participant in the balance of
his Company Stock Account that accrued before such five consecutive
Breaks in Service.
(B) Notwithstanding any other provision of this paragraph
(c), if a Participant is reemployed by the Company or an Affiliate and,
as a result, no five consecutive Breaks in Service occur, the
Participant shall not be entitled to any termination of employment
benefit as a result of such termination of employment.
(4) (A) Notwithstanding any other provision of this paragraph
(c), if at any time a Participant is less than 100% vested in his
Company Stock Account and, as a result of his termination of
employment, he receives his entire vested termination of employment
benefit pursuant to the provisions of Article IX, and the distribution
of such benefit is made not later than the close of the fifth Plan
Year following the Plan Year in which such termination occurs (or such
longer period as may be permitted by the Secretary of the Treasury,
through regulations or otherwise), then upon the occurrence of such
distribution, the non-vested interest of the Participant in his
Company Stock Account shall be deemed to be forfeited. Forfeited
amounts shall be allocated as provided in paragraph (e) of Article VI.
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<PAGE> 26
(B) If a Participant is not vested as to any portion of
his Company Stock Account, he will be deemed to have received a
distribution immediately following his termination of employment. Upon
the occurrence of such deemed distribution, the non-vested interest of
the Participant in his Company Stock Account shall be deemed to be
forfeited. Forfeited amounts shall be allocated as provided in
paragraph (e) of Article VI.
(C) If a Participant whose interest is forfeited under this
paragraph (c)(4) resumes employment covered under the Plan, then such
Participant shall have the right to repay to the Trust, before the date
that is the earlier of: (i) five years after the Participant's
resumption of employment, or (ii) the close of a period of five
consecutive Breaks in Service following the date of his distribution,
the full amount of the termination of employment benefit previously
distributed to him. If the Participant elects to repay such amount to
the Trust within the time periods prescribed herein, or if a non-vested
Participant whose interest was forfeited under this paragraph (c)(4)
resumes employment covered under the Plan prior to the occurrence of
five consecutive Breaks in Service, the non-vested interest of the
Participant previously forfeited pursuant to the provisions of this
paragraph (c)(4) shall be restored to the Company Stock Account of the
Participant, such restoration to be made from Forfeitures of non-vested
interests and, if necessary, by contributions of the Company, so that
the aggregate of the amounts repaid by the Participant and restored by
the Company shall not be less than the account balance of the
Participant at the time of Forfeiture unadjusted by any subsequent
gains or losses.
(d) Death Benefit.
(1) In the event of the death of a Participant, his Beneficiary
shall be entitled to a death benefit in an amount equal to 100% of the balance
in his Company Stock Account as of the date of distribution of his benefit.
(2) At any time and from time to time, each Participant shall have
the unrestricted right to designate a Beneficiary to receive his death benefit
and to revoke any such designation. Each designation or revocation shall be
evidenced by written instrument filed with the Plan Administrator, signed by the
Participant and bearing the signature of a witness to his signature. In the
event that a Participant has not designated a Beneficiary or Beneficiaries, or
if for any reason such designation shall be legally ineffective, or if such
Beneficiary or Beneficiaries shall predecease the Participant, then the personal
representative of the estate of such Participant shall be deemed to be the
Beneficiary designated to receive such death benefit, or if no personal
representative is appointed for the
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<PAGE> 27
estate of such Participant, then his next of kin under the statute of
descent and distribution of the state of such Participant's domicile
at the date of his death shall be deemed to be the Beneficiary or
Beneficiaries to receive such death benefit.
(3) Notwithstanding the foregoing, if the Participant is
married as of the date of his death, the Participant's surviving
spouse shall be deemed to be his designated Beneficiary and shall
receive the full amount of the death benefit attributable to the
Participant unless the spouse consents or has consented to the
Participant's designation of another Beneficiary. Any such consent
to the designation of another Beneficiary must acknowledge the effect
of the consent, must be witnessed by a Plan representative or by a
notary public and shall be effective only with respect to that spouse.
A spouse's consent shall be a restricted consent (which may not be
changed as to the Beneficiary unless the spouse consents to such
change in the manner described herein). Notwithstanding the
preceding provisions of this paragraph (d)(3), a Participant shall not
be required to obtain spousal consent to his designation of another
Beneficiary if: (i) the Participant is legally separated or the
Participant has been abandoned, and the Participant provides the
Administrator with a court order to such effect, or (ii) the spouse
cannot be located.
(e) Withdrawals During Employment. Participants shall not be
entitled to receive an in-service withdrawal (including loans) under this Plan.
Distributions may only be made as provided for under this Article VIII.
ARTICLE IX
Payment of Benefits
(a) Time and Form of Payment of Benefits.
(1) Except as otherwise provided under this Article IX:
(A) The amount of the retirement, disability,
termination of employment or death benefit to which a
Participant is entitled under paragraphs (a), (b), (c) or (d)
of Article VIII shall be paid to him (or his Beneficiary or
Beneficiaries in the case of a death benefit), in a lump sum
as soon as practicable following the Participant's retirement,
disability, termination of employment or death, as the case
may be.
(2) (A) Notwithstanding the foregoing, no
distribution shall be made of the retirement, disability or
termination of employment benefit to which a Participant is
entitled under paragraph (a), (b) or (c) of Article VIII
prior to his Normal Retirement Date unless the value of his
benefit
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<PAGE> 28
attributable to Employer contributions, if any, determined as
of the time of distribution, does not exceed $3,500.00, or
unless the Participant consents to the distribution.
(B) In the event that a Participant does not
consent to a distribution of a benefit in excess of $3,500.00
to which he is entitled under paragraph (a), (b) or (c) of
Article VIII, the amount of his benefit shall be paid to the
Participant not later than sixty (60) days after the last day
of the Plan Year in which the Participant reaches his Normal
Retirement Date.
(3) (A) Notwithstanding anything contained herein to
the contrary, any distribution paid to a Participant (or, in
the case of a death benefit, to his Beneficiary or
Beneficiaries) pursuant to paragraph (a)(1) above shall
commence not later than the earlier of:
(i) the 60th day after the last day of
the Plan Year in which the Participant attains the
earlier of age 65 or the Normal Retirement Date; or
(ii) April 1 of the year immediately
following the calendar year in which he reaches age
70-1/2.
(4) In the case of a death benefit, payment to the
designated Beneficiary shall be made within one year following the
Participant's death (unless the designated Beneficiary is the
Participant's surviving spouse, in which case such benefit shall
begin no later than the date the Participant would have reached age
70-1/2).
(5) Notwithstanding the foregoing, payments under the
Plan shall satisfy the incidental death benefit requirements and all
other applicable provisions of Section 401(a)(9) of the Code, the
regulations issued thereunder (including Prop. Reg. Section 1.401(a)
(9)-2), and such other rules thereunder as may be prescribed by the
Commissioner).
(b) Distribution of Benefits. Distribution of a Participant's
benefit under the Plan will be made in whole shares of Company Stock or cash
if Company Stock is not available for that purpose. Fractional shares of
Company Stock shall be distributed in cash.
(c) Put Option.
(1) If the Company Stock becomes not readily tradeable
on an established securities market, then any Participant, who is
otherwise entitled to a distribution from the Plan, shall have the
right (the "Put Option") to require that the Company repurchase any
Company Stock under a fair valuation formula.
(2) The Put Option must be exercisable only by a
Participant, by the Participant's donees, or by a person
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<PAGE> 29
(including an estate or its distributees) to whom the Company Stock
passes by reason of a Participant's death (Under this paragraph (c)
(2), Participant or former Participant means a Participant or former
Participant and the Beneficiaries of the Participant or former
Participant under the Plan). The Put Option must permit a
Participant to put the Company Stock to the Company. Under no
circumstances may the Put Option bind the Plan. However, it shall
grant the Plan an option to assume the rights and obligations of the
Company at the time that the Put Option is exercised.
The Put Option shall commence as of the day following the
date the Company Stock is distributed to the Participant and end 60
days thereafter and, if not exercised within such 60-day period, an
additional 60-day option shall commence on the first day of the first
month of the Plan Year next following the date the stock was
distributed to the Participant (or such other 60-day period as
provided in regulations promulgated by the Secretary of the Treasury).
However, in the case of Company Stock that is publicly traded without
restrictions when distributed but ceases to be so traded within
either of the 60-day periods described herein after distribution, the
Company must notify each holder of such Company Stock in writing on
or before the tenth day after the date the Company Stock ceases to be
so traded that for the remainder of the applicable 60-day period the
Company Stock is subject to the Put Option. The number of days
between the tenth day and the date on which notice is actually given,
if later than the tenth day, must be added to the duration of the Put
Option. The notice must inform distributees of the term of the Put
Options that they are to have. The terms must satisfy the
requirements of this paragraph (c)(2).
The Put Option is exercised by the holder notifying the
Company in writing that the Put Option is being exercised; the notice
shall state the name and address of the holder and the number of
shares to be sold. The period during which a Put Option is
exercisable does not include any time when a distributee is unable to
exercise it because the party bound by the Put Option is prohibited
from honoring it by applicable federal or state law. The price at
which a Put Option must be exercisable is the value of the Company
Stock determined in accordance with paragraph (c) of Article XI of
the Plan. Payment upon exercise of the Put Option shall be made in
substantially equal installments over a period certain determined by
the payor beginning not later than thirty (30) days after exercise of
the option and not extending beyond five (5) years from the date of
exercise of the option. Any deferred payments must provide for
reasonable interest and adequate security. The payor shall have the
right to prepay the deferred payments, without penalty and with
interest to the date of payment, in its sole discretion. Payment for
Company Stock received other than as part of a "Total Distribution"
shall be made within thirty (30) days after exercise of the Put Option.
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<PAGE> 30
For purposes of this Section, "Total Distribution" means a
distribution to a Participant or his Beneficiary within one taxable
year of the Participant's entire Vested Interest in the Plan.
(3) An arrangement involving the Plan that creates a Put
Option must not provide for the issuance of Put Options other than as
provided under this paragraph (c). The Plan (and the Trust Fund)
must not otherwise obligate itself to acquire Company Stock from a
particular holder thereof at an indefinite time determined upon the
happening of an event such as the death of the holder.
(d) Location of Participant or Beneficiary Unknown. In the event
that all, or any portion of the distribution payable to a Participant or his
Beneficiary, hereunder shall remain unpaid after five (5) Plan Years solely
by reason of the inability of the Administrator, after sending a registered
letter, return receipt requested, to the last known address, and after further
diligent effort, to ascertain the whereabouts of such Participant or his
Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the provisions of Article VIII. In the event a Participant or
Beneficiary of such Participant is located subsequent to his benefit being
reallocated, such benefit shall be restored.
(e) Transfer to Other Qualified Plans. The Trustee, upon written
direction by the Plan Administrator, shall transfer some or all of the assets
held under the Trust to another plan or trust meeting the requirements of the
Code relating to qualified plans and trust, whether such transfer is made
pursuant to a merger or consolidation of this Plan with such other plan or
trust or for any other allowable purpose.
(f) Direct Rollovers.
(1) Notwithstanding any provisions of the Plan to the
contrary that would otherwise limit a distributee's (as defined below)
election under this paragraph, a distributee may elect, at the time
and in the manner prescribed by the Plan Administrator, to have any
portion of an eligible rollover distribution (as defined below) paid
directly to an eligible retirement plan (as defined below) specified
by the distributee in a direct rollover (as defined below).
(2) For purposes of this paragraph, the following terms
shall have the following meanings:
(A) An "eligible rollover distribution" is any
distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one
of a series of substantially equal periodic payments made not
less frequently than annually for the
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<PAGE> 31
life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated Beneficiary, or for a specified
period of ten years or more; any distribution to the extent
such distribution is required under Code Section 401(a)(9), and
the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities).
(B) An "eligible retirement plan" is an
individual retirement account described in Code Section
408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section
403(a), or a qualified trust described in Code Section
401(a), that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual
retirement annuity.
(C) A "distributee" includes an Employee or
former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in
Code Section 414(p), are distributees with regard to the
interest of the spouse or former spouse.
(D) A "direct rollover" is a payment by the Plan
to the eligible retirement plan specified by the distributee.
ARTICLE X
Voting and Exercising Other Rights of Securities
(a) Voting Company Stock. Each Participant (or, in the event of
his death, his Beneficiary) shall have the right to direct the Trustee as to
the manner in which whole and partial shares of Company Stock allocated to his
Company Stock Account as of the record date are to be voted on each matter
brought before an annual or special shareholders' meeting. Before each such
meeting of shareholders, the Trustee shall furnish to each Participant (or
Beneficiary) a copy of the proxy solicitation material, together with a form
requesting directions on how such shares of Company Stock allocated to such
Participant's Company Stock Account shall be voted on each such matter. Upon
timely receipt of such directions, the Trustee shall on each such matter vote
as directed the number of shares (including fractional shares) of Company
Stock allocated to such Participant's Company Stock Account, and the Trustee
shall have no discretion in such matter. The directions received by the
Trustee from Participants shall be held by the Trustee in confidence and shall
29
<PAGE> 32
not be divulged or released to any person, including officers or employees of
any Employer. The Trustee shall vote allocated shares for which it has not
received direction and unallocated shares of Company Stock in the same
proportion as directed shares are voted, and shall have no discretion in such
matter.
(b) Tender Offer. If a tender or exchange offer is commenced for
Company Stock:
(1) The Trustee shall distribute in a timely manner to
each Participant (or Beneficiary) such information as is distributed
to holders of Company Stock in connection with the tender or exchange
offer.
(2) All Company Stock held by the Trustee in Company
Stock Accounts shall be tendered or not tendered by the Trustee in
accordance with directions it receives from the Participants (or
Beneficiaries). Each Participant (or Beneficiary) shall be entitled
to direct the Trustee with respect to the tender of such Company
Stock allocated to his Account. The instructions received by the
Trustee from Participants (or Beneficiaries) shall be held by the
Trustee in confidence and shall not be divulged or released to any
person, including officers or employees of any Employer.
(3) The Trustee shall not tender Company Stock allocated
to Company Stock Accounts with respect to which directions by
Participants (or Beneficiaries) are not received or Company Stock
held by the Trustee that is not allocated to Company Stock Accounts.
(c) No Recommendations. The Trustee shall make no recommendations
regarding the manner of exercising any rights under this Article, including
whether or not such rights should be exercised.
ARTICLE XI
Valuations
(a) Valuation of Trust Fund. The Plan Administrator shall direct
the Trustee, as of each Allocation Date, and at such other date or dates
deemed necessary by the Plan Administrator, herein called "Valuation Date", to
determine the net worth of the assets comprising the Trust Fund as it exists
on the "Valuation Date" prior to taking into consideration any contribution to
be allocated for that Plan Year. In determining such net worth, the Trustee
shall value the assets comprising the Trust Fund at their fair market value as
of the "Valuation Date" and shall deduct all expenses for which the Trustee
has not yet obtained reimbursement from the Company or the Trust Fund.
(b) Methods of Valuation. Valuations must be made in good
faith and based on all relevant factors for determining the fair
30
<PAGE> 33
market value of securities. In the case of a transaction between a Plan and a
disqualified person, value must be determined as of the date of the
transaction. For all other Plan purposes, value must be determined as of the
most recent "Valuation Date" under the Plan. An independent appraisal will
not in itself be a good faith determination of value in the case of a
transaction between the Plan and a disqualified person. However, in other
cases, a determination of fair market value based on at least an annual
appraisal independently arrived at by a person who customarily makes such
appraisals and who is independent of any party to the transaction will be
deemed to be a good faith determination of value. If the Company Stock
becomes not readily tradeable on an established securities market, then any
valuation required under this Plan will be conducted by an independent
appraiser meeting the requirements similar to those prescribed under Code
Section 170(a)(1).
ARTICLE XII
Investment Funds
(a) Investment of Trust Fund. The Trustee shall invest the Trust
Fund primarily in Company Stock. The Trustee may also invest the Trust Fund
in cash, cash equivalents, certificates of deposit, money market funds,
guaranteed investment contracts, short term securities, bonds and similar
suitable investments.
(b) Diversification. Any Participant who has attained age 55 and
completed 10 years of Plan participation (the "Qualified Participant") shall
have the right to make an election to direct the Plan as to investment of his
Account. Such a Participant may elect within 90 days after the close of each
Plan Year in the qualified election period (as defined in Section 401(a)(28)
of the Code) to diversify 25% of his Account, less any amount to which a prior
election applies. In the case of the last year to which an election applies,
50% shall be substituted for 25%.
Notwithstanding the above, if the fair market value (determined at
the Plan Valuation Date immediately preceding the first day on which a
Qualified Participant is eligible to make an election) of Company Stock
acquired by or contributed to the Plan and allocated to a Qualified
Participant's Company Stock Account is $500.00 or less, then such Company
Stock shall not be subject to this paragraph (b). For purposes of determining
whether the fair market value exceeds $500.00, Company Stock held in accounts
of all employee stock ownership plans (as defined in Section 4975(e)(7) of the
Code) and tax credit employee stock ownership plans (as defined in Section
409(a) of the Code) maintained by the Employer or any Affiliate shall be
considered as held by the Plan.
The Plan may meet the requirements of Section 401(a)(28) of the Code
by either: (1) offering at least three (3) investment options, or (2)
distributing the portion of the Account covered by the
31
<PAGE> 34
election to the Participant within the 90 day period after the election is
made.
ARTICLE XIII
Trust Fund and Expenses of Administration
(a) Trustee. The Trust Fund shall be held by the Trustee, or by
a successor trustee or trustees, for use in accordance with the Plan under the
Trust Agreement. The Trust Agreement may from time to time be amended in the
manner therein provided. Similarly, the Trustee may be changed from time to
time in the manner provided in the Trust Agreement.
(b) Expenses of Administration.
(1) (A) Unless otherwise paid or provided by the
Company, the assets of the Trust Fund shall be used to pay
all expenses of the administration of the Plan and the Trust
Fund, including the Trustee's compensation, the compensation
of any investment manager, the expense incurred by the Plan
Administrator in discharging its duties, all income or other
taxes of any kind whatsoever that may be levied or assessed
under existing or future laws upon or in respect of the Trust
Fund, and any interest that may be payable on money borrowed
by the Trustee for the purpose of the Trust.
(B) The Company may pay the expenses of the Plan
and the Trust Fund. Any such payment by the Company shall
not be deemed a contribution to this Plan.
(2) Notwithstanding anything contained herein to the
contrary, no excise tax or other liability imposed upon the Trustee,
the Plan Administrator or any other person for failure to comply with
the provisions of any federal law shall be subject to payment or
reimbursement from the assets of the Trust.
(3) For its services, any corporate trustee shall be
entitled to receive reasonable compensation in accordance with its
rate schedule in effect from time to time for the handling of a
retirement trust. Any individual trustee shall be entitled to such
compensation as shall be arranged between the Company and the Trustee
by separate instrument; provided, however, that no person who is
already receiving full time pay from any Employer or any Affiliate
shall receive compensation from the Trust Fund (except for the
reimbursement of expenses properly and actually incurred).
32
<PAGE> 35
ARTICLE XIV
Amendment and Termination
(a) Restrictions on Amendment Termination of Plan. It is the
present intention of the Company to maintain the Plan set forth herein
indefinitely. Nevertheless, the Company specifically reserves to itself the
right at any time, and from time to time, to amend or terminate this Plan in
whole or in part; provided, however, that no such amendment:
(1) shall have the effect of vesting in any Employer,
directly or indirectly, any interest, ownership or control in any of
the present or subsequent funds held subject to the terms of the Trust;
(2) shall cause or permit any property held subject to
the terms of the Trust to be diverted to purposes other than the
exclusive benefit of the Participants and their Beneficiaries or for
the administrative expenses of the Plan Administrator and the Trust;
(3) shall (A) reduce any vested interest of a Participant
on the later of the date the amendment is adopted or the date the
amendment is effective, except as permitted by law, or (B) reduce or
restrict either directly or indirectly any benefit provided any
Participant prior to the date an amendment is adopted;
(4) shall reduce the Account of any Participant;
(5) shall amend any vesting schedule with respect to any
Participant who has at least three Years of Service at the end of the
election period described below, except as permitted by law, unless
each such Participant shall have the right to elect to have the
vesting schedule in effect prior to such amendment apply with respect
to him, such election, if any, to be made during the period beginning
not later than the date the amendment is adopted and ending no
earlier than sixty (60) days after the latest of the date the
amendment is adopted, the amendment becomes effective or the
Participant is issued written notice of the amendment by his Employer
or the Plan Administrator; or
(6) shall increase the duties or liabilities of the
Trustee without its written consent.
(b) Amendment of Plan. Subject to the limitations stated in
paragraph (a), the Company shall have the power to amend this Plan in any
manner that it deems desirable, and, not in limitation but in amplification of
the foregoing, it shall have the right to change or modify the method of
allocation of contributions hereunder, to change any provision relating to the
administration of this Plan and
33
<PAGE> 36
to change any provision relating to the distribution or payment, or both, of any
of the assets of the Trust.
(c) Termination of Plan. Any Employer, in its sole and absolute
discretion, may permanently discontinue making contributions under this Plan
or may terminate this Plan and the Trust, completely or partially, at any time
without any liability whatsoever for such permanent discontinuance or complete
or partial termination. In any of such events, the affected Participants,
notwithstanding any other provisions of this Plan, shall have fully vested
interests in the amounts credited to each of their respective accounts at the
time of such complete or partial termination of this Plan and the Trust or
permanent discontinuance of contributions. All such vested interests shall be
nonforfeitable.
(d) Discontinuance Procedure. In the event an Employer decides
to permanently discontinue making contributions, such decision shall be
evidenced by an appropriate resolution of its Board and a certified copy of such
resolution shall be delivered to the Plan Administrator and the Trustee. All
of the assets in the Trust Fund belonging to the affected Participants on the
date of discontinuance specified in such resolutions shall, aside from becoming
fully vested as provided in paragraph (c), be held, administered and
distributed by the Trustee in the manner provided under this Plan. In the
event of a permanent discontinuance of contributions without such formal
documentation, full vesting of the interests of the affected Participants in
the amounts credited to each of their respective accounts will occur on the
last day of the year in which a substantial contribution is made to the Trust.
(e) Termination Procedure. In the event an Employer decides to
terminate this Plan and the Trust, such decision shall be evidenced by an
appropriate resolution of its Board and a certified copy of such resolution
shall be delivered to the Plan Administrator and the Trustee. After payment
of all expenses and proportional adjustments of individual accounts to reflect
such expenses and other changes in the value of the Trust Fund as of the date of
termination, each affected Participant (or the Beneficiary of any such
Participant) shall be entitled to receive, provided that no successor plan has
been established, any amount then credited to his Account in accordance with the
provisions of Article IX.
ARTICLE XV
Miscellaneous
(a) Merger or Consolidation. This Plan and the Trust may not be
merged or consolidated with, and the assets or liabilities of this Plan and
the Trust may not be transferred to, any other plan or trust unless each
Participant would receive a benefit immediately after the merger,
consolidation or transfer, if the plan and trust then terminated, that is
equal to or greater than the benefit the Participant would have received
immediately before the merger,
34
<PAGE> 37
consolidation or transfer if this Plan and the Trust had then terminated.
(b) Alienation.
(1) Except as provided in paragraph (2), no Participant
or Beneficiary of a Participant shall have any right to assign,
transfer, appropriate, encumber, commute, anticipate or otherwise
alienate his interest in this Plan or the Trust or any payments to be
made thereunder; no benefits, payments, rights or interests of a
Participant or Beneficiary of a Participant of any kind or nature
shall be in any way subject to legal process to levy upon, garnish or
attach the same for payment of any claim against the Participant or
Beneficiary of a Participant; and no Participant or Beneficiary of a
Participant shall have any right of any kind whatsoever with respect
to the Trust, or any estate or interest therein, or with respect to
any other property or right, other than the right to receive such
distributions as are lawfully made out of the Trust, as and when the
same respectively are due and payable under the terms of this Plan
and the Trust.
(2) Notwithstanding the provisions of paragraph (b)(1),
the Plan Administrator shall direct the Trustee to make payments
pursuant to a Qualified Domestic Relations Order as defined in
Section 414(p) of the Code. The Plan Administrator shall establish
procedures consistent with Section 414(p) of the Code to determine if
any order received by the Plan Administrator, or any other fiduciary
of the Plan, is a Qualified Domestic Relations Order.
(c) Governing Law. This Plan shall be administered, construed
and enforced according to the laws of the State of Florida, except to the
extent such laws have been expressly preempted by federal law.
(d) Action by Employer. Whenever an Employer under the terms of
this Plan is permitted or required to do or perform any act, it shall be done
and performed by the Board of Directors of an Employer and shall be evidenced by
proper resolution of such Board of Directors certified by the Secretary or
Assistant Secretary of an Employer.
(e) Alternative Actions. In the event it becomes impossible for
the Company, the Plan Administrator or the Trustee to perform any act required
by this Plan, then the Company, the Plan Administrator or the Trustee, as the
case may be, may perform such alternative act that most nearly carries out the
intent and purpose of this Plan.
(f) Gender. Throughout this Plan, and whenever appropriate, the
masculine gender shall be deemed to include the feminine and neuter; the
singular, the plural; and vice versa.
35
<PAGE> 38
IN WITNESS WHEREOF, this Plan has been executed this 28th day of
December 2, 1994.
HOME SHOPPING NETWORK, INC.
By: /s/
--------------------------
Its Vice-President
"COMPANY"
36
<PAGE> 1
EXHIBIT 4.2
HOME SHOPPING NETWORK, INC. EMPLOYEE EQUITY PARTICIPATION PLAN
AGREEMENT AND DECLARATION OF TRUST
This Agreement and Declaration of Trust, made this 28th day of
December, 1994, by and between HOME SHOPPING NETWORK, INC., a Delaware
corporation, hereinafter referred to as the "Company", and PNC BANK KENTUCKY,
INC., hereinafter referred to as the "Trustee".
WHEREAS, the Company has heretofore adopted its Employee Stock
Ownership Plan (a copy of which is annexed hereto and is herein called the
"Plan") for the benefit of the Participants and their beneficiaries;
NOW, THEREFORE, the Company and the Trustee do hereby agree and declare
as follows:
ARTICLE I
Establishment of Trust Fund
The Company hereby establishes with the Trustee, pursuant to the Plan,
a trust which shall be comprised of an initial amount of $10.00, hereby
delivered to the Trustee, together with other sums of money and other property
acceptable to the Trustee, and the earnings and profits thereon. All such
money and property, all investments made therewith and proceeds thereof, and
all earnings and profits thereon, less the payments made by the Trustee, as
authorized herein, are referred to herein as the "Fund". The Fund shall be
held by the Trustee in trust and dealt with in accordance with the provisions
of this Agreement and Declaration of Trust. At no time shall any part of the
corpus or income of the Fund be used for or diverted to purposes other than for
the exclusive benefit of the Participants and their beneficiaries.
ARTICLE II
Duties of Trustee
2.1 Distributions. It shall be the duty of the Trustee to make
payments out of the Trust Fund from time to time on the written directions of
the Administrator provided in the Plan to such persons, in the manner and in
amounts as may be specified in the written directions of the Administrator,
including, when the Administrator shall so direct, payments to the Participants
or their beneficiaries under the Plan. Such directions need not specify the
purpose of the payment so ordered, and the Trustee shall not be responsible in
any way respecting the purpose of the payments, the applications of the
payments or for the adequacy of the Fund to meet and discharge any liabilities
under the Plan. In the event that more than one Administrator is appointed,
the responsibilities of each shall be as determined by the Board of Directors
and accepted in writing by the Administrators. In the event no delegation is
made by the Board of Directors, the Administrators may allocate the
responsibilities among themselves, in which event they shall notify the Trustee
and the Board of
<PAGE> 2
Directors in writing of their action. The Trustee thereafter
shall be entitled to accept and rely upon any document executed by the
appropriate Administrator unless the Board of Directors or the Administrators
shall file with the Trustee a written revocation of the designation.
2.2 Company Stock. The Plan is intended to invest primarily in
marketable securities of the Company and qualify as an employee stock ownership
plan within the meaning of section 4975(e)(7) of the Internal Revenue Code of
1986, as amended.
2.3 Investment of Trust Fund. Subject to Section 2.2, above, the
Trustee shall invest and reinvest the principal and income of the Fund and keep
the Fund invested, without distinction between principal and income, in any and
all common stocks, preferred stocks, bonds, treasury bills, mutual funds,
shares of open-end management type investment companies, notes, debentures,
mortgages, equipment trust certificates, ordinary life insurance, annuity and
other investment contracts, common trust or investment funds (including funds
which may be established by any bank or trust company which may be or become a
Trustee hereunder), and in other property, real or personal, investments and
securities of any kind, class or character as the Trustee may deem suitable for
the Fund, and may purchase, sell, write or otherwise deal with stock options,
both puts and calls, and futures contracts, provided that in selecting
investments the Trustee shall use the skill and diligence of a prudent man
acting in a like capacity in the conduct of an enterprise of a like character
and with like aims. The Trustee, in the Trustee's discretion, may keep a
portion of the Fund in cash or cash balance (including deposits with any bank
which may be or become a Trustee hereunder) as the Trustee may from time to
time deem to be in the best interests of the Fund.
2.4 Investment Managers. The Trustee may, with the written consent
of the Administrator, select one or more Investment Managers, as defined by the
Plan, to manage all or any portion of the Trust Fund, and the Trustee shall not
thereafter be responsible for any act or omission of the Investment Manager or
be under any obligation to invest or otherwise manage any asset of the Plan
subject to the control of the Investment Manager.
2.5 Valuation of Trust Fund. Within 60 days after the end of the
fiscal year of the Plan, the Trustee shall ascertain and certify to the
Administrator the fair market value, as of the last day of such fiscal year, of
all securities and other properties held in the Fund. The fair market values
may be determined either by the Trustee or by any other person or persons
believed by the Trustee to be competent to make the determination as the
Trustee may select. Any determination of value so made shall, for all purposes
of the Plan, conclusively establish such values.
2
<PAGE> 3
ARTICLE III
Powers of Trustee
3.1 Specific Powers. The Trustee is authorized and empowered:
(a) To buy, sell exchange, convey, transfer, or otherwise
acquire or dispose of any property held by the Trustee, by private contract or
at public auction, and no person dealing with the Trustee shall be bound to see
to the application of the purchase money or to inquire into the validity,
expediency, or propriety of the sale or other disposition;
(b) To buy, sell, write and otherwise deal with stock options
and the purchases and sales may be made on credit including the use of a
margin account;
(c) To vote any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without power
of substitution; to exercise any warrants, conversion privileges, subscription
rights, or other options and to make any payments incidental thereto; to
consent to or otherwise participate in corporate reorganizations or other
changes affecting corporate securities and to delegate discretionary powers and
to pay any assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks, bonds,
securities, or other property held in the Fund;
(d) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other instruments that
may be necessary or appropriate to carry out the powers herein granted;
(e) To register any investment held in the Fund in the
Trustee's own names or in the name of the nominee or nominees and to hold any
investment in bearer form, but the books and records of the Trustee shall at
all times show that the investments are part of the Fund;
(f) To manage, administer, operate, lease for any number of
years, develop, improve, repair, alter, demolish, mortgage, pledge, grant
options with respect to, or otherwise deal with any real property or interest
therein at any time held in trust;
(g) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation;
(h) To borrow or raise monies for the purposes of the Trust
and for any sum so borrowed to issue a promissory note as Trustee and to secure
the repayment thereof by pledging all or any part of the Fund, but nothing
herein contained shall obligate a Trustee to be liable individually for the
borrowing; and no person
3
<PAGE> 4
loaning money to the Trustee shall be bound to see to the application of the
money loaned or to inquire into the validity, expediency, or propriety of the
borrowing;
3.2 General Powers. Notwithstanding the provisions of Section 3.1,
the Trustee is authorized and empowered to perform all acts not specifically
mentioned herein as the Trustee may deem necessary to administer the Trust
Fund and to carry out the purposes of the Trust.
3.3 Defined Terms. Capitalized terms used in this Agreement but
not specifically defined herein shall have the meaning described to them in the
Plan.
ARTICLE IV
Trustee
4.1 Resignation or Removal of Trustee. Any Trustee may resign at
any time upon 60 days' notice in writing to the Company and the Administrator.
A Trustee may be removed by the Company at any time upon 60 days' notice in
writing to the Trustee and the Administrator. Upon the resignation or removal
of a Trustee, the Company shall appoint a successor Trustee who shall have the
same powers and duties as those conferred upon the former Trustee hereunder.
The former Trustee shall assign, transfer, and pay to the remaining Trustee or
the successor Trustee the Funds and properties then held by the former Trustee
and constituting a part of the Fund. The former Trustee is authorized,
however, to reserve a reasonable sum of money for payment of fees and expenses
in connection with the settlement of the trust accounts or otherwise, and any
balance of the reserve remaining after the payment of fees and expenses shall
be paid to the remaining or successor Trustee.
4.2 Accounting by Trustee. The Trustee shall keep accurate and
detailed accounts of all investments, receipts, disbursements, and other
transactions hereunder, and all accounts, books, and records relating thereto
shall be open to inspection and audit at all reasonable times by any person
designated by the Administrator. Within 60 days following the close of the
Plan's fiscal year, and within 90 days after the removal or resignation of
a Trustee as provided in paragraph 4.1 hereof, the Trustee shall file with the
Company a written account setting forth all investments, receipts,
disbursements and other transactions effected by the Trustee during the fiscal
year or during the period from the close of the last fiscal year to the date of
the removal or resignation, which account so filed shall be open to inspection
during business hours by the Administrator and by the Participants and their
beneficiaries for a period of 30 days immediately following the date on which
the account is filed with the Company. Upon the expiration of the 30-day
period, the Trustee shall be forever released and discharged from all liability
and accountability to anyone with respect to the propriety of the acts and
transactions
4
<PAGE> 5
shown in the account, except with respect to any act or
transaction as to which the Company, Participants, or beneficiaries shall have
filed written objections with the Trustee within the 30-day period.
4.3 Reliance by Trustee. Any action by the Board of Directors of
the Company pursuant to any of the provisions of this Agreement and Declaration
of Trust shall be evidenced by a resolution of the Board of Directors certified
to the Trustee over the signature of its secretary or any assistant secretary
under the corporate seal, and the Trustee shall be fully protected in acting
in accordance with the resolutions. All directions, requests, and instructions
of the Administrator to the Trustee shall be in writing, and the Trustee shall
act and shall be fully protected in acting in accordance with the directions,
requests and instructions. The Company shall furnish the Trustee from time to
time with certified copies of resolutions of its Board of Directors evidencing
the appointment and termination of office of Administrator.
4.4 Liability of Trustee. The Trustee from time to time may
consult with counsel, who may be counsel for the Company, and other advisers
and shall be fully protected in reasonably and prudently acting on the advice.
4.5 More than One Trustee. During any time when there shall be
more than one Trustee serving, action shall be taken by a majority vote
of the Trustee at a meeting or in writing without a meeting. The Trustee may
authorize and direct one Trustee to communicate the actions of the Trustee to
the Administrator or any other interested party. In that event the
Administrator shall be notified of the authorization and shall be entitled to
rely on the communication.
ARTICLE V
Termination and Amendment
5.1 Termination of Plan. The Company shall have the right at any
time to permanently discontinue its contributions hereunder and to terminate
or partially terminate its participation in this Plan and Trust by delivering
to the Trustee and the Administrator written notice of the discontinuance,
termination or partial termination, in which event the Fund shall be disposed
of by the Trustee in accordance with the written directions of the
Administrator.
5.2 Amendment of Trust. The Company reserves the right at any
time and from time to time, by action of its Board of Directors, to modify or
amend, in whole or in part, any or all of the provisions of this Agreement and
Declaration of Trust provided that no modification or amendment which affects
the rights, duties or responsibilities of the Trustee may be made without the
Trustee's consent in writing, and provided further, that no
5
<PAGE> 6
modification or amendment shall authorize or permit, at any time, any
part of the corpus or income of the Fund to be used for or diverted to
purposes other than for the exclusive benefit of Participants and their
beneficiaries under the Plan.
5.3 Adoption by Affiliates. Affiliates of the Company may, with
the consent of the Company, adopt this Plan for the benefit of their employees.
Any such Affiliate may also discontinue its participation in the Plan at any
time by giving appropriate notice to the Trustee, the Company and the Plan
Administrator.
ARTICLE VI
Miscellaneous Provision
6.1 Expenses and Taxes. All brokerage costs and transfer taxes
incurred in connection with the investment and reinvestment of the Fund, all
expenses (other than fees for legal services rendered to the Trustee) incurred
in connection with the acquisition or holding or real property, any interest
therein or mortgage thereon, and all income taxes or other taxes of any kind
whatsoever which may be levied or assessed under existing or future laws upon
or in respect of the Fund, and any interest which may be payable on money
borrowed by the Trustee for the purposes of the Trust, shall be paid from the
Fund, and until paid, shall constitute a charge upon the Fund. All other
administrative expenses actually incurred by the Trustee in the performance of
Trustee's duties hereunder, including fees for legal services rendered to the
Trustee and such compensation to any Trustee who is not also an employee of the
Company as may be agreed upon in writing from time to time between the Company
and the Trustee, shall be paid by the Company, but until paid shall constitute
a charge upon the Fund.
6.2 Applicable Law. The Plan and this Agreement and Declaration
of Trust shall be administered, construed and enforced according to the
Employee Retirement Income Security Act of 1974, as amended, and the laws of
the State of Florida, to the extent they are not inconsistent therewith.
IN WITNESS WHEREOF, this Agreement has been executed on the day and
year set forth in the first paragraph of page 1, above.
Attest: HOME SHOPPING NETWORK, INC.
By: /s/ By: /s/
------------------------- ------------------------
Asst. Secretary Vice-President
(Corporate Seal)
6
<PAGE> 7
TRUSTEE'S ACCEPTANCE
PNC BANK KENTUCKY, INC. hereby accepts the designation by the Board of
Directors of HOME SHOPPING NETWORK, INC., as Trustee under this Agreement and
Declaration of Trust.
In exercising the responsibilities hereunder, the Trustee understands
that he is the fiduciary of the Plan and will be held responsible for their
actions and failures to act in that capacity.
Brenda Higgins, VP Trust Officer
--------------------------------
"Trustee"
STATE OF FLORIDA
COUNTY OF PINELLAS
The foregoing instrument was acknowledged before me this 28th day of
December, 1994, by Kevin J. McKeon and H. Steven Holtzman as Vice President and
Secretary, respectively, of HOME SHOPPING NETWORK, INC., on behalf of the
Company, who is personally known to me or has produced ______________________
as identification.
Shirley S. Edwards
--------------------------------
NOTARY PUBLIC
Name:
---------------------------
My Commission Expires:
(SEAL)
STATE OF KENTUCKY
COUNTY OF JEFFERSON
The foregoing instrument was acknowledged before me this 29th day of
December, 1994, by Brenda Higgins, as Trustee, who is personally known to me
or who has produced ____________________ as identification.
Judy A. Franklin
--------------------------------
NOTARY PUBLIC
Name: Judy A. Franklin
---------------------------
My Commission Expires: 3/30/96
7
<PAGE> 1
Exhibit 23.1
The Board of Directors
Home Shopping Network, Inc.
We consent to incorporation by reference in the registration statement on Form
S-8 of Home Shopping Network, Inc. (filed on April 21, 1995) of our report
dated February 15, 1995, except as to the last paragraph of Note P which is as
of March 15, 1995, relating to the consolidated balance sheets of Home Shopping
Network, Inc. and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the years in the two-year period ended December 31, 1994 and
the four months ended December 31, 1992, which report appears in Home Shopping
Network, Inc.'s 1994 Annual Report, and is incorporated by reference into the
December 31, 1994 annual report on Form 10-K.
KPMG Peat Marwick LLP
April 21, 1995
St. Petersburg, Florida
<PAGE> 1
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Home Shopping Network, Inc. on Form S-8 of our reports dated October 15, 1992
(February 15, 1995 as to Note I to the consolidated financial statements)
appearing in and incorporated by reference in the Annual Report on Form 10-K of
Home Shopping Network, Inc. for the year ended December 31, 1994.
DELOITTE & TOUCHE LLP
Tampa, Florida
April 21, 1995
