<PAGE> 1
As filed with the Securities and Exchange Commission on May 18, 2000.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
USA NETWORKS, INC.
(Exact name of registrant as specified in its charter)
Delaware 59-2712887
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
152 West 57th Street, New York, New York 10019
(Address of Principal Executive Offices) (Zip Code)
USA NETWORKS, INC
2000 STOCK AND ANNUAL INCENTIVE PLAN
(Full title of the plan)
THOMAS KUHN, ESQ.
USA NETWORKS, INC.
152 WEST 57TH STREET
NEW YORK, NEW YORK 10019
(Name and address of agent for service)
(212) 314-7300
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE PRICE FEE
<S> <C> <C> <C> <C>
Common Stock, 20,000,000 $22.625 (2) $452,500,000 (2) $119,460 (2)
par value shares
$.01 per share
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) The average of the high and low reported prices of the Registrant's
Common Stock on May 15, 2000 has been used for the purpose of
calculating the registration fee pursuant to Rule 457(c).
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
INTRODUCTORY STATEMENT
This Registration Statement on Form S-8 (the "Registration Statement")
of USA Networks, Inc., a Delaware corporation (the "Company" or the
"Registrant"), relates to up to 20,000,000 shares of the Registrant's common
stock, par value $.01 per share (the "Common Stock"), issuable in connection
with the USA Networks, Inc. 2000 Stock and Annual Incentive Plan (the "Plan").
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed below are incorporated by reference in this
Registration Statement. All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), subsequent to the date of the filing of this Registration
Statement and prior to the filing of a post-effective amendment that indicates
that all securities registered hereunder have been sold, or that deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of the filing of such documents.
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999;
(b) The description of the Common Stock is contained in the
Company's Proxy Statement on Schedule 14A, dated November 20, 1996.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Restated Certificate of Incorporation limits, to the
maximum extent permitted by Delaware law, the personal liability of directors
for monetary damages for breach of their fiduciary duties as directors. The
Registrant's Bylaws provide that the directors, officers and certain other
persons will be indemnified to the fullest extent permitted by Delaware law
with respect to third-party actions or suits, provided such person has met the
applicable standard of conduct which permits indemnification under Delaware
law. The Registrant's Bylaws further provide that directors, officers and
certain other persons will be indemnified with respect
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to actions or suits initiated by such person, provided that such proceeding was
authorized by the Board of Directors. The Registrant's Bylaws allow the
Registrant to pay all expenses incurred by a director, officer, employee or
agent in defending any proceeding within the scope of the indemnification
provisions as such expenses are incurred in advance of its final disposition,
subject to repayment if it is ultimately determined that such party was not
entitled to indemnity by the Registrant. From time to time, officers and
directors may be provided with indemnification agreements that are consistent
with the foregoing provisions. The Registrant believes that these agreements
are necessary to attract and retain qualified persons as directors and
officers.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify a director, officer, employee or agent made a party
to an action by reason of the fact that he was a director, officer or agent of
the corporation or was serving at the request of the corporation against
expenses actually and reasonably incurred by him in connection with such action
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, had no reasonable cause to believe his conduct was unlawful.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be permitted to
directors, officers or persons controlling the Registrant pursuant to the
foregoing provisions, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
ITEM 8. EXHIBITS.
The exhibits incorporated by reference or filed as part of this
Registration Statement are listed in the Index of Exhibits that begins on page
9.
ITEM 9. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) 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, as amended (the "Securities Act");
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(ii) to reflect in the prospectus any facts or events arising after the
effective date of the 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 the Registration Statement;
and (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 clauses (i) and (ii) do not apply if the information required to
be included in a post-effective amendment by those clauses is contained in
periodic reports filed with or furnished to the Securities and Exchange
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement;
(2) That, for the purpose of determining any liability
under the Securities 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; and
(3) 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.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 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.
C. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under Item 6
above or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities 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
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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 whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing this Registration Statement 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 New York, State of New
York, on the 26th day of April, 2000.
USA NETWORKS, INC.
By: /s/ Barry Diller
---------------------
Name: Barry Diller
Title: Chairman of the
Board and Chief
Executive Officer
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Thomas J. Kuhn his attorney-in-fact,
each with the power of substitution, for him or her in any and all capacities,
to sign any amendments to this Registration Statement and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-8 has been signed by the following persons in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Barry Diller Chairman of the April 26, 2000
- -------------------- Board and Chief
Barry Diller Executive Officer
/s/ Barry Baker
- -------------------- Director and April 26, 2000
Barry Baker Chief Operating
Officer
/s/ Michael P. Durney
- -------------------- Vice President April 26, 2000
Michael P. Durney and Controller
(Principal
Accounting Officer)
/s/ Victor A. Kaufman
- -------------------- Director and April 26, 2000
Victor A. Kaufman Vice Chairman
/s/ Michael Sileck
- -------------------- Senior VP, Chief April 26, 2000
Michael Sileck Financial Officer
(Principal Financial
Officer)
/s/ Paul Allen
- -------------------- Director April 26, 2000
Paul Allen
</TABLE>
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<TABLE>
<S> <C> <C>
/s/ Edgar Bronfman
- ------------------------- Director April 26, 2000
Edgar Bronfman, Jr.
/s/ Anne Busquet
- ------------------------- Director April 25, 2000
Anne M. Busquet
/s/ Donald Keough
- ------------------------- Director April 25, 2000
Donald Keough
/s/ Robert Matschullat
- ------------------------- Director April 25, 2000
Robert W. Matschullat
/s/ Samuel Minzberg
- ------------------------- Director April 26, 2000
Samuel Minzberg
/s/ Brian Mulligan
- ------------------------- Director April 26, 2000
Brian Mulligan
/s/ William D. Savoy
- ------------------------- Director April 26, 2000
William D. Savoy
/s/ H. Norman Schwarzkopf
- ------------------------- Director April 27, 2000
H. Norman Schwarzkopf
/s/ Diane Von Furstenberg
- ------------------------- Director April 25, 2000
Diane Von Furstenberg
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
<S> <C>
5.01 Opinion of Thomas J. Kuhn, Esq. as to the
legality of the shares to be registered.
23.01 Consent of Thomas J. Kuhn, Esq.(included in
Opinion filed as Exhibit 5.01)
23.02 Consent of Ernst & Young LLP
24.01 Power of Attorney (included on Pages 7 and 8 of
this Registration Statement)
99.01 2000 Stock and Annual Incentive Plan
</TABLE>
9
<PAGE> 1
EXHIBIT 5.01
May 4, 2000
Board of Directors
USA Networks, Inc.
152 West 57th Street
New York, New York 10019
Re: Registration Statement on Form S-8 of USA Networks, Inc.
Dear Sirs:
I am Senior Vice President, General Counsel and Secretary of USA Networks,
Inc., a Delaware corporation (the "Company"). This opinion is being delivered
in connection with the filing with the Securities and Exchange Commission of
the above-captioned Registration Statement on Form S-8 (the "Registration
Statement") with respect to the registration under the Securities Act of 1933,
as amended, of 20,000,000 shares of the Company's common stock, par value $.01
per share (the "Common Stock"), that are issuable pursuant to the Company's
2000 Stock and Annual Incentive Plan (the "Plan").
In connection with this opinion, I have reviewed the Registration Statement and
the exhibits thereto, and I have examined originals or copies, certified or
otherwise identified to my satisfaction, of such corporate records, agreements,
certificates of public officials, the Plan and other instruments, and such
matters of law and fact as I have deemed necessary to render the opinion
contained herein. I have assumed the authenticity of all documents submitted to
me as originals and the conformity to authentic original documents of all
documents submitted to me as certified, conformed or reproduction copies. I
have further assumed that there will be no changes in applicable law between
the date of this opinion and the date shares of Common Stock are issued or sold
pursuant to the Plan and the Registration Statement.
Based upon and subject to the foregoing, I am of the opinion that the shares of
Common Stock available under the Plan, when issued, delivered and paid for in
accordance with the terms and conditions of the Plan, will be validly issued,
fully paid and non-assessable.
I hereby consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In giving the foregoing
consent, I do not hereby admit that I am in the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
/s/ Thomas J. Kuhn
- -----------------------------
Thomas J. Kuhn, Esq.
Senior Vice President, General Counsel
and Secretary
<PAGE> 1
Exhibit 23.02
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) for an aggregate of 20,000,000 shares of Common Stock, $.01 par
value, pertaining to the 2000 Stock and Annual Incentive Plan, of our report
dated February 3, 2000 with respect to the consolidated financial statements
and schedule of USA Networks, Inc. and subsidiaries included in its Annual
Report (Form 10-K) for the year ended December 31, 1999, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
New York, New York
May 15, 2000
<PAGE> 1
Exhibit 99.1
USA NETWORKS, INC.
2000 STOCK AND ANNUAL INCENTIVE PLAN
SECTION 1. Purpose; Definitions
The purpose of the Plan is to give the Corporation a competitive
advantage in attracting, retaining and motivating officers and employees and to
provide the Corporation and its subsidiaries with a stock plan providing
incentives more directly linked to the profitability of the Corporation and
increases in shareholder value.
For purposes of the Plan, the following terms are defined as set forth
below:
(a) "Affiliate" means a corporation or other entity controlling,
controlled by or under common control with the Corporation.
(b) "Award" means a Stock Appreciation Right, Stock Option, Restricted
Stock, Performance Unit or Bonus Award.
(c) "Award Cycle" shall mean a period of consecutive fiscal years or
portion thereof designated by the Committee over which Performance Units are to
be earned.
(d) "Board" means the Board of Directors of the Corporation.
(e) "Bonus Award" means an annual bonus award made pursuant to Section
10.
(f) "Cause" means, except as otherwise determined by the Committee
pursuant to an Award agreement, the willful and continued failure on the part of
a participant substantially to perform his employment duties in any material
respect, or such other events as shall be determined by the Committee; provided,
that "Cause" includes, without limitation: (i) the plea of guilty or nolo
contendere to, or conviction for, the commission of a felony offense by a
participant; (ii) a material breach by a participant of a fiduciary duty owed to
the Corporation or any of its subsidiaries; (iii) a material breach by a
participant of any nondisclosure, non-solicitation or non-competition obligation
owed to the Corporation or any of its subsidiaries; and (iv) the willful or
gross neglect by a participant of his employment duties. The Committee shall
have the sole discretion to determine whether "Cause" exists, and its
determination shall be final.
(g) "Change in Control" and "Change in Control Price" have the meanings
set forth in Sections 11(b) and (c), respectively.
(h) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
(i) "Commission" means the Securities and Exchange Commission or any
successor agency.
(j) "Committee" means the Committee referred to in Section 2.
(k) "Common Stock" means common stock, par value $.01 per share, of the
Corporation.
(l) "Corporation" means USA Networks, Inc., a Delaware corporation.
(m) "Covered Employee" means a participant designated prior to the
grant of shares of Restricted Stock, Performance Units or Bonus Awards by the
Committee who is or may be a "covered employee"
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within the meaning of Section 162(m)(3) of the Code in the year in which
Restricted Stock or Performance Units are expected to be taxable to such
participant.
(n) "Disability" means, except as otherwise determined by the Committee
in an Award Agreement, permanent and total disability as determined under
procedures established by the Committee for purposes of the Plan.
(o) "Early Retirement" means retirement from active employment with the
Corporation, a subsidiary or Affiliate pursuant to the early retirement
provisions of the applicable pension plan of such employer.
(p) "EBITDA" means for any period, the consolidated earnings (losses)
of the Corporation before extraordinary items and the cumulative effect of
accounting changes, as determined by the Corporation in accordance with GAAP,
and before interest (expenses or income), taxes, depreciation, amortization,
non-cash gains and losses from sales of assets other than in the ordinary course
of business and non-cash expense charged against earnings resulting from the
application of accounting for business combinations in accordance with
Accounting Principles Board Opinion No. 16 ("APB No. 16").
(q) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
(r) "Fair Market Value" means, as of any given date, the last reported
sales price of the Common Stock in the over-the-counter market, as reported by
NASDAQ (or, if the Common Stock is listed on a national securities exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national security exchange on which the
Common Stock is listed or admitted to trading) on the last preceding date or, if
there are no reported sales on that date, on the last day prior to that date on
which there are such reported sales.
(s) "Incentive Stock Option" means any Stock Option designated as, and
qualified as, an "incentive stock option" within the meaning of Section 422 of
the Code.
(t) "Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(u) "Normal Retirement" means retirement from active employment with
the Corporation, a subsidiary or Affiliate at or after age 65.
(v) "Performance Goals" means the performance goals established by the
Committee in connection with the grant of Restricted Stock, Performance Units or
Bonus Awards. In the case of Qualified-Performance Based Awards, (i) such goals
shall be based on the attainment of one or any combination of the following:
specified levels of earnings per share from continuing operations, EBITDA,
operating income, revenues, return on operating assets, return on equity,
profits, total shareholder return (measured in terms of stock price appreciation
and/or dividend growth), and/or stock price, with respect to the Corporation or
such subsidiary, division or department of the Corporation for or within which
the participant performs services and that are intended to qualify under Section
162(m)(4)(c) of the Code and (ii) such Performance Goals shall be set by the
Committee within the time period prescribed by Section 162(m) of the Code and
related regulations. Such Performance Goals also may be based upon the attaining
of specified levels of Corporation performance under one or more of the measures
described above relative to the performance of other corporations.
(w) "Performance Units" means an award made pursuant to Section 8.
(x) "Plan" means the USA Networks, Inc. 2000 Stock and Annual Incentive
Plan, as set forth herein and as hereinafter amended from time to time.
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(y) "Plan Year" means the calendar year or, with respect to Bonus
Awards, the Corporation's fiscal year if different.
(z) "Qualified Performance-Based Award" means an Award designated as
such by the Committee at the time of grant, based upon a determination that (i)
the recipient is or may be a "covered employee" within the meaning of Section
162(m)(3) of the Code in the year in which the Company would expect to be able
to claim a tax deduction with respect to such Awards and (ii) the Committee
wishes such Award to qualify for the Section 162(m) Exemption.
(aa) "Restricted Stock" means an award granted under Section 7.
(bb) "Retirement" means Normal or Early Retirement.
(cc) "Section 162(m) Exemption" means the exemption from the
limitation on deductibility imposed by Section 162(m) of the Code that is set
forth in Section 162(m)(4)(C) of the Code.
(dd) "Stock Appreciation Right" means a right granted under Section
6.
(ee) "Stock Option" means an option granted under Section 5.
(ff) "Termination of Employment" means the termination of the
participant's employment with the Corporation and any subsidiary or Affiliate. A
participant employed by a subsidiary or an Affiliate shall also be deemed to
incur a Termination of Employment if the subsidiary or Affiliate ceases to be
such a subsidiary or an Affiliate, as the case may be, and the participant does
not immediately thereafter become an employee of the Corporation or another
subsidiary or Affiliate. Temporary absences from employment because of illness,
vacation or leave of absence and transfers among the Corporation and its
subsidiaries and Affiliates shall not be considered Terminations of Employment.
In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.
SECTION 2. Administration
The Plan shall be administered by the Compensation/Benefits Committee
or such other committee of two or more directors as the Board may from time to
time designate (the "Committee"), which shall be appointed by and serve at the
pleasure of the Board.
The Committee shall have plenary authority to grant Awards pursuant to
the terms of the Plan to officers and employees of the Corporation and its
subsidiaries and Affiliates.
Among other things, the Committee shall have the authority, subject to
the terms of the Plan:
(a) To select the officers and employees, to whom Awards may from time
to time be granted;
(b) Determine whether and to what extent Incentive Stock Options,
Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Units and Bonus Awards or any combination thereof are to be granted
hereunder;
(c) Determine the number of shares of Common Stock to be covered by
each Award granted hereunder;
(d) Determine the terms and conditions of any Award granted hereunder
(including, but not limited to, the option price (subject to Section 5(a)), any
vesting condition, restriction or limitation (which may be related to the
performance of the participant, the Corporation or any subsidiary or Affiliate)
and any
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<PAGE> 4
vesting acceleration or forfeiture waiver regarding any Award and the shares of
Common Stock relating thereto, based on such factors as the Committee shall
determine;
(e) Modify, amend or adjust the terms and conditions of any Award, at
any time or from time to time, including but not limited to Performance Goals;
provided, however, that the Committee may not adjust upwards the amount payable
to a designated Covered Employee with respect to a particular award upon the
satisfaction of applicable Performance Goals;
(f) Determine to what extent and under what circumstances Common Stock
and other amounts payable with respect to an Award shall be deferred; and
(g) Determine under what circumstances an Award may be settled in cash
or Common Stock under Sections 5(j), 8(b)(i), 10(b), and 11(a)(iii).
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then in office,
except that the members thereof may (i) delegate to an officer of the
Corporation the authority to make decisions pursuant to paragraphs (c), (f),
(g), (h) and (i) of Section 5 (provided that without approval by the Board no
such delegation may be made that would cause Awards or other transactions under
the Plan to cease to be exempt from Section 16(b) of the Exchange Act) and (ii)
authorize any one or more of their number or any officer of the Corporation to
execute and deliver documents on behalf of the Committee. Any action permitted
to be taken by the Committee under the Plan may be taken by the full Board in
its discretion, and in such case the Board shall be treated as the Committee
hereunder.
Any determination made by the Committee or pursuant to delegated
authority pursuant to the provisions of the Plan with respect to any Award shall
be made in the sole discretion of the Committee or such delegate at the time of
the grant of the Award or, unless in contravention of any express term of the
Plan, at any time thereafter. All decisions made by the Committee or any
appropriately delegated officer pursuant to the provisions of the Plan shall be
final and binding on all persons, including the Corporation and Plan
participants.
SECTION 3. Common Stock Subject To Plan
The total number of shares of Common Stock reserved and available for
grant under the Plan shall be 20,000,000. No participant may be granted Awards
pursuant to the Plan covering in excess of 16,000,000 shares of Common Stock
over the life of the Plan. Shares subject to an Award under the Plan may be
authorized and unissued shares or may be treasury shares.
If any shares of Restricted Stock are forfeited for which the
participant did not receive any benefits of ownership (as such phrase is
construed by the Commission or its staff), or if any Stock Option (and related
Stock Appreciation Right, if any) terminates without being exercised, or if any
Stock Appreciation Right is exercised for cash, shares subject to such Awards
shall again be available for distribution in connection with Awards under the
Plan.
In the event of any change in corporate capitalization (including, but
not limited to, a change in the number of shares of Common Stock outstanding),
such as a stock split or a corporate transaction, such as any merger,
consolidation, separation, including a Spin-off, or other distribution of stock
or property of the Corporation, any reorganization (whether or not such
reorganization comes within the definition of such term in Section 368 of the
Code) or any partial or complete liquidation of the Corporation, the Committee
or Board may make such substitution or adjustments in the aggregate number and
kind of shares reserved for issuance under the Plan and the maximum limitation
upon Awards to be granted to any participant, in
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the number, kind and option price of shares subject to outstanding Stock Options
and Stock Appreciation Rights, in the number and kind of shares subject to other
outstanding Awards granted under the Plan and/or such other equitable
substitution or adjustments as it may determine to be appropriate in its sole
discretion; provided, however, that the number of shares subject to any Award
shall always be a whole number. In the event of a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation, the Board shall be authorized to cause the Corporation to issue or
assume stock options, whether or not in a transaction to which Section 424(a) of
the Code applies, by means of substitution of new stock options for previously
issued stock options or an assumption of previously issued stock options. In
such event, the aggregate number of shares of the Stock available for issuance
under Awards under Section 3 will be increased to reflect such substitution or
assumption.
SECTION 4. Eligibility
Persons who serve or agree to serve as officers, employees, directors
or consultants of the Corporation (including prospective officers or employees),
its subsidiaries and Affiliates who are responsible for or contribute to the
management, growth and profitability of the business of the Corporation, its
subsidiaries and Affiliates are eligible to be granted Awards under the Plan.
SECTION 5. Stock Options
Stock Options may be granted alone or in addition to other Awards
granted under the Plan and may be of two types: Incentive Stock Options and
Nonqualified Stock Options. Any Stock Option granted under the Plan shall be in
such form as the Committee may from time to time approve.
The Committee shall have the authority to grant any participant
Incentive Stock Options, Nonqualified Stock Options or both types of Stock
Options (in each case with or without Stock Appreciation Rights); provided,
however, that grants hereunder are subject to the aggregate limit on grants to
individual participants set forth in Section 3. Incentive Stock Options may be
granted only to employees of the Corporation and its "subsidiaries" and
"parent", if any (within the meaning of Section 424(f) of the Code). To the
extent that any Stock Option is not designated as an Incentive Stock Option or
even if so designated does not qualify as an Incentive Stock Option, it shall
constitute a Nonqualified Stock Option.
Stock Options shall be evidenced by option agreements, the terms and
provisions of which may differ. An option agreement shall indicate on its face
whether it is intended to be an agreement for an Incentive Stock Option or a
Nonqualified Stock Option. The grant of a Stock Option shall occur on the date
the Committee by resolution selects an individual to be a participant in any
grant of a Stock Option, determines the number of shares of Common Stock to be
subject to such Stock Option to be granted to such individual and specifies the
terms and provisions of the Stock Option. The Corporation shall notify a
participant of any grant of a StockOption, and a written option agreement or
agreements shall be duly executed and delivered by the Corporation to the
participant. Such grant shall become effective upon the date of grant (subject
to conditions set forth therein), and the execution of the option agreements(s)
may occur following the grant of the Stock Option.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Committee shall deem desirable:
(a) Option Price. The option price per share of Common Stock
purchasable under a Stock Option shall be determined by the Committee and set
forth in the option agreement, and shall not be less than the Fair Market Value
of the Common Stock subject to the Stock Option on the date of grant.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than 10 years
after the date the Incentive Stock Option is granted.
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(c) Exercisability. Except as otherwise provided herein, Stock Options
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part, based
on such factors as the Committee may determine. In addition, the Committee may
at any time accelerate the exercisability of any Stock Option.
(d) Method of Exercise. Subject to the provisions of this Section 5,
Stock Options may be exercised, in whole or in part, at any time during the
option term by giving written notice of exercise to the Corporation specifying
the number of shares of Common Stock subject to the Stock Option to be
purchased.
Such notice shall be accompanied by payment in full of the purchase
price by certified or bank check or such other instrument as the Corporation may
accept. If approved by the Committee, payment, in full or in part, may also be
made in the form of unrestricted Common Stock already owned by the optionee of
the same class as the Common Stock subject to the Stock Option (based on the
Fair Market Value of the Common Stock on the date the Stock Option is
exercised); provided, however, that, in the case of an Incentive Stock Option
the right to make a payment in the form of already owned shares of Common Stock
of the same class as the Common Stock subject to the Stock Option may be
authorized only at the time the Stock Option is granted.
In the discretion of the Committee, payment for any shares subject to a
Stock Option may also be made by delivering a properly executed exercise notice
to the Corporation, together with a copy of irrevocable instructions to a broker
to deliver promptly to the Corporation the amount of sale or loan proceeds from
shares of Common Stock owned by the optionee necessary to pay the purchase
price, and, if requested, to pay the amount of any federal, state, local or
foreign withholding taxes. To facilitate the foregoing, the Corporation may
enter into agreements for coordinated procedures with one or more brokerage
firms.
In addition, in the discretion of the Committee, payment for any shares
subject to a Stock Option may also be made by instructing the Committee to
withhold a number of such shares having a Fair Market Value on the date of
exercise equal to the aggregate exercise price of such Stock Option.
No shares of Common Stock shall be issued until full payment therefor
has been made. An optionee shall have all of the rights of a shareholder of the
Corporation holding the class or series of Common Stock that is subject to such
Stock Option (including, if applicable, the right to vote the shares and the
right to receive dividends), when the optionee has given written notice of
exercise, has paid in full for such shares and, if requested, has given the
representation described in Section 14(a).
(e) Nontransferability of Stock Options. No Stock Option shall be
transferable by the optionee other than (i) by will or by the laws of descent
and distribution; or (ii) in the case of a Nonqualified Stock Option, pursuant
to (a) a qualified domestic relations order (as defined in the Code, or the
regulations thereunder), (b) a gift to such optionee's immediate family or other
specified individuals or entities, whether directly or indirectly or by means of
a trust, partnership, limited liability corporation or otherwise, if expressly
permitted under the applicable option agreement or (c) a gift to a charitable
organization, if expressly permitted under the applicable option agreement. All
Stock Options shall be exercisable, subject to the terms of this Plan, during
the optionee's lifetime, only by the optionee or any person to whom the Stock
Option is transferred by will or the laws of descent and distribution or, in the
case of a Nonqualified Stock Option, pursuant to a qualified domestic relations
order or a gift permitted under the applicable option agreement. For purposes of
this Section 5(e), "immediate family" shall mean, except as otherwise defined by
the Committee, the optionee's spouse, children, siblings, stepchildren,
grandchildren, parents, stepparents, grandparents, in-laws and persons related
by legal adoption. Such transferees may transfer a Stock Option only by will or
the laws of descent and distribution.
(f) Termination by Death. Unless otherwise determined by the Committee
(in the option agreement or otherwise), if an optionee's Termination of
Employment is by reason of death, any Stock
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Option held by such optionee may thereafter be exercised, to the extent then
exercisable, or on such accelerated basis as the Committee may determine, for a
period of one year (or such other period as the Committee may specify in the
option agreement) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
(g) Termination by Reason of Disability. Unless otherwise determined by
the Committee (in the option agreement or otherwise), if an optionee's
Termination of Employment is by reason of Disability, any Stock Option held by
such optionee may thereafter be exercised by the optionee, to the extent it was
exercisable at the time of termination, or on such accelerated basis as the
Committee may determine, for a period of 3 years from the date of such
Termination of Employment or until the expiration of the stated term of such
Stock Option, whichever period is the shorter; provided, however, that if the
optionee dies within such period, any unexercised Stock Option held by such
optionee shall, notwithstanding the expiration of such period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In the event
of Termination of Employment by reason of Disability, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
(h) Termination by Reason of Retirement. Unless otherwise determined by
the Committee (in the option agreement or otherwise), if an optionee's
Termination of Employment is by reason of Retirement, any Stock Option held by
such optionee may thereafter be exercised by the optionee, to the extent it was
exercisable at the time of such Retirement, or on such accelerated basis as the
Committee may determine, for a period of 5 years from the date of such
termination of employment or until the expiration of the stated term of such
Stock Option, whichever period is the shorter; provided, however, that if the
optionee dies within such period any unexercised Stock Option held by such
optionee shall, notwithstanding the expiration of such period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In the event
of Termination of Employment by reason of Retirement, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
(i) Other Termination. Unless otherwise determined by the Committee (in
the option agreement or otherwise): (A) if an optionee incurs a Termination of
Employment for Cause, all Stock Options held by such optionee shall thereupon
terminate; and (B) if an optionee incurs a Termination of Employment for any
reason other than death, Disability, Retirement or Cause, any Stock Option held
by such optionee, to the extent then exercisable, or on such accelerated basis
as the Committee may determine, may be exercised for the lesser of 3 months from
the date of such Termination of Employment or the balance of such Stock Option's
term; provided, however, that if the optionee dies within such three-month
period, any unexercised Stock Option held by such optionee shall,
notwithstanding the expiration of such 3-month period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
Notwithstanding the foregoing, unless otherwise determined by the Committee (in
the option agreement or otherwise), if an optionee incurs a Termination of
Employment at or after a Change in Control (as defined Section 11(b)), other
than by reason of death, Disability or Retirement, any Stock Option held by such
optionee shall be exercisable for the lesser of (1) 6 months and one day from
the date following such Termination of Employment, and (2) the balance of such
Stock Option's term. In the event of Termination of Employment, if an Incentive
Stock Option is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, such Stock Option will thereafter
be treated as a Nonqualified Stock Option.
(j) Cashing Out of Stock Option. On receipt of written notice of
exercise, the Committee may elect to cash out all or part of the portion of the
shares of Common Stock for which a Stock Option is being exercised by paying the
optionee an amount, in cash or Common Stock, equal to the excess of the Fair
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Market Value of the Common Stock over the option price times the number of
shares of Common Stock for which the Option is being exercised on the effective
date of such cash-out.
(k) Change in Control Cash-Out. Notwithstanding any other provision of
the Plan, during the 60-day period from and after a Change in Control (the
"Exercise Period"), unless the Committee shall determine otherwise at the time
of grant, an optionee shall have the right, whether or not the Stock Option is
fully exercisable and in lieu of the payment of the exercise price for the
shares of Common Stock being purchased under the Stock Option and by giving
notice to the Corporation, to elect (within the Exercise Period) to surrender
all or part of the Stock Option to the Corporation and to receive cash, within
10 days of such notice, in an amount equal to the amount by which the Change in
Control Price per share of Common Stock on the date of such election shall
exceed the exercise price per share of Common Stock under the Stock Option (the
"Spread") multiplied by the number of shares of Common Stock granted under the
Stock Option as to which the right granted under this Section 5(k) shall have
been exercised. Notwithstanding the foregoing, if the exercise of any right
granted pursuant to this Section 5(k) would make a Change in Control transaction
ineligible for pooling of interests accounting under APB No. 16 that but for
this Section 5(k) would otherwise be eligible for such accounting treatment, the
Committee shall have the ability to substitute the cash payable pursuant to this
Section 5(k) with Common Stock (or shares of common stock of the entity
surviving the Change in Control transaction, or its parent corporation, if
applicable) with a Fair Market Value equal to the cash that would otherwise be
payable hereunder.
SECTION 6. Stock Appreciation Rights
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Nonqualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option.
A Stock Appreciation Right may be exercised by an optionee in
accordance with Section 6(b) by surrendering the applicable portion of the
related Stock Option in accordance with procedures established by the Committee.
Upon such exercise and surrender, the optionee shall be entitled to receive an
amount determined in the manner prescribed in Section 6(b). Stock Options which
have been so surrendered shall no longer be exercisable to the extent the
related Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined by the Committee, including the
following:
(i) Stock Appreciation Rights shall be exercisable only at such
time or times and to the extent that the Stock Options to which they
relate are exercisable in accordance with the provisions of Section 5
and this Section 6.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee
shall be entitled to receive an amount in cash, shares of Common Stock
or both, in value equal to the excess of the Fair Market Value of one
share of Common Stock over the option price per share specified in the
related Stock Option multiplied by the number of shares in respect of
which the Stock Appreciation Right shall have been exercised, with the
Committee having the right to determine the form of payment.
(iii) Stock Appreciation Rights shall be transferable only to
permitted transferees of the underlying Stock Option in accordance with
Section 5(e).
(iv) Upon the exercise of a Stock Appreciation Right, the Stock
Option or part thereof to which such Stock Appreciation Right is
related shall be deemed to have been exercised for the purpose of the
limitation set forth in Section 3 on the number of shares of Common
Stock to be
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issued under the Plan, but only to the extent of the number of shares
in respect of which the Stock Appreciation Right has been exercised.
SECTION 7. Restricted Stock
(a) Administration. Shares of Restricted Stock may be awarded either
alone or in addition to other Awards granted under the Plan. The Committee shall
determine the officers and employees to whom and the time or times at which
grants of Restricted Stock will be awarded, the number of shares to be awarded
to any participant (subject to the aggregate limit on grants to individual
participants set forth in Section 3), the conditions for vesting, the time or
times within which such Awards may be subject to forfeiture and any other terms
and conditions of the Awards, in addition to those contained in Section 7(c).
The Committee may, prior to grant, condition the vesting of Restricted
Stock upon the attainment of Performance Goals. The Committee may, in addition
to or instead of requiring satisfaction of Performance Goals, condition vesting
upon the continued service of the participant. The provisions of Restricted
Stock Awards (including the applicable Performance Goals) need not be the same
with respect to each recipient.
(b) Awards and Certificates. Shares of Restricted Stock shall be
evidenced in such manner as the Committee may deem appropriate, including
book-entry registration or issuance of one or more stock certificates. Any
certificate issued in respect of shares of Restricted Stock shall be registered
in the name of such participant and shall bear an appropriate legend referring
to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) of the USA Networks, Inc. 2000 Stock and
Annual Incentive Plan and a Restricted Stock Agreement. Copies of
such Plan and Agreement are on file at the offices of USA Networks,
Inc."
The Committee may require that the certificates evidencing such shares be held
in custody by the Corporation until the restrictions thereon shall have lapsed
and that, as a condition of any Award of Restricted Stock, the participant shall
have delivered a stock power, endorsed in blank, relating to the Common Stock
covered by such Award.
(c) Terms and Conditions. Shares of Restricted Stock shall be subject
to the following terms and conditions:
(i) Subject to the provisions of the Plan and the Restricted Stock
Agreement referred to in Section 7(c)(vi), during the period, if any,
set by the Committee, commencing with the date of such Award for which
such participant's continued service is required (the "Restriction
Period"), and until the later of (i) the expiration of the Restriction
Period and (ii) the date the applicable Performance Goals (if any) are
satisfied, the participant shall not be permitted to sell, assign,
transfer, pledge or otherwise encumber shares of Restricted Stock;
provided, that the foregoing shall not prevent a participant from
pledging Restricted Stock as security for a loan, the sole purpose of
which is to provide funds to pay the option price for Stock Options.
Within these limits, the Committee may provide for the lapse of
restrictions based upon period of service in installments or otherwise
and may accelerate or waive, in whole or in part, restrictions based
upon period of service or upon performance; provided, however, that in
the case of Restricted Stock subject to Performance Goals granted to a
participant who is a Covered Employee, the applicable Performance Goals
have been satisfied.
(ii) Except as provided in this paragraph (ii) and Section 7(c)(i)
and the Restricted Stock Agreement, the participant shall have, with
respect to the shares of Restricted Stock, all of the
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rights of a stockholder of the Corporation holding the class or series
of Common Stock that is the subject of the Restricted Stock, including,
if applicable, the right to vote the shares and the right to receive
any cash dividends. If so determined by the Committee in the applicable
Restricted Stock Agreement and subject to Section 14(e) of the Plan,
(1) cash dividends on the class or series of Common Stock that is the
subject of the Restricted Stock Award shall be automatically deferred
and reinvested in additional Restricted Stock, held subject to the
vesting of the underlying Restricted Stock, or held subject to meeting
Performance Goals applicable only to dividends, (2) dividends payable
in Common Stock shall be paid in the form of Restricted Stock of the
same class as the Common Stock with which such dividend was paid, held
subject to the vesting of the underlying Restricted Stock, or held
subject to meeting Performance Goals applicable only to dividends and
(3) dividends payable in shares of a subsidiary of the Corporation upon
a Spin-off transaction shall be held as restricted shares subject to
the vesting provisions of the underlying Restricted Stock.
(iii) Except to the extent otherwise provided in the applicable
Restricted Stock Agreement and Sections 7(c)(i), 7(c)(iv) and
11(a)(ii), upon a participant's Termination of Employment for any
reason during the Restriction Period or before the applicable
Performance Goals are satisfied, all shares still subject to
restriction shall be forfeited by the participant.
(iv) In the event of a participant's Retirement or a participant's
involuntary Termination of Employment (other than for Cause), the
Committee shall have the discretion to waive, in whole or in part, any
or all remaining restrictions (other than, in the case of Restricted
Stock with respect to which a participant is a Covered Employee,
satisfaction of the applicable Performance Goals unless the
participant's employment is terminated by reason of death or
Disability) with respect to any or all of such participant's shares of
Restricted Stock.
(v) If and when any applicable Performance Goals are satisfied
and the Restriction Period expires without a prior forfeiture of the
Restricted Stock, unlegended certificates for such shares shall be
delivered to the participant upon surrender of the legended
certificates.
(vi) Each Award shall be confirmed by, and be subject to, the
terms of a Restricted Stock Agreement.
SECTION 8. Performance Units
(a) Performance Units may be awarded either alone or in addition to
other Awards granted under the Plan. The Committee shall determine the officers
and employees to whom and the time or times at which Performance Units shall be
awarded, the number of Performance Units to be awarded to any participant
(subject to the aggregate limit on grants to individual participants set forth
in Section 3), the duration of the Award Cycle and any other terms and
conditions of the Award, in addition to those contained in Section 8(b).
The Committee may condition the settlement of Performance Units upon
the continued service of the participant, the attainment of Performance Goals,
or both. The provisions of such Awards (including the applicable Performance
Goals) need not be the same with respect to each recipient.
(b) Terms and Conditions. Performance Units Awards shall be subject to
the following terms and conditions:
(i) Subject to the provisions of the Plan and the Performance
Units Agreement referred to in Section 8(b)(vi), Performance Units may
not be sold, assigned, transferred, pledged or otherwise encumbered
during the Award Cycle. At the expiration of the Award Cycle, the
Committee shall evaluate the Corporation's performance in light of the
Performance Goals for such Award to the extent applicable, and shall
determine the number of Performance Units granted to the participant
which have been earned, and the Committee may then elect to deliver (1)
a
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number of shares of Common Stock equal to the number of Performance
Units determined by the Committee to have been earned, or (2) cash
equal to the Fair Market Value of such number of shares of Common Stock
to the participant.
(ii) Except to the extent otherwise provided in the applicable
Performance Unit Agreement and Sections 8(b)(iii) and 11(a)(iii), upon
a participant's Termination of Employment for any reason during the
Award Cycle or before any applicable Performance Goals are satisfied,
the rights to the shares still covered by the Performance Units Award
shall be forfeited by the participant.
(iii) Except to the extent otherwise provided in Section
11(a)(iii), upon a participant's Termination of Employment (other than
for Cause), or in the event of a participant's Retirement, the
Committee shall have the discretion to waive, in whole or in part, any
or all remaining payment limitations (other than, in the case of
Performance Units with respect to which a participant is a Covered
Employee, satisfaction of any applicable Performance Goals unless the
participant's Termination of Employment is by reason of death or
Disability) with respect to any or all of such participant's
Performance Units.
(iv) A participant may elect to further defer receipt of the
Performance Units payable under an Award (or an installment of an
Award) for a specified period or until a specified event, subject in
each case to the Committee's approval and to such terms as are
determined by the Committee (the "Elective Deferral Period"). Subject
to any exceptions adopted by the Committee, such election must
generally be made prior to commencement of the Award Cycle for the
Award (or for such installment of an Award).
(v) If and when any applicable Performance Goals are satisfied
and the Elective Deferral Period expires without a prior forfeiture of
the Performance Units, payment in accordance with Section 8(b)(i)
hereof shall be made to the participant.
(vi) Each Award shall be confirmed by, and be subject to, the
terms of a Performance Unit Agreement.
SECTION 9. Tax Offset Bonuses
At the time an Award is made hereunder or at any time thereafter, the
Committee may grant to the participant receiving such Award the right to receive
a cash payment in an amount specified by the Committee, to be paid at such time
or times (if ever) as the Award results in compensation income to the
participant, for the purpose of assisting the participant to pay the resulting
taxes, all as determined by the Committee and on such other terms and conditions
as the Committee shall determine.
SECTION 10. Bonus Awards
(a) Determination of Awards. The Committee shall determine the total
amount of Bonus Awards for each Plan Year. Prior to the beginning of the Plan
Year (or such later date as may be prescribed by the Internal Revenue Service
under Section 162(m) of the Code), the Committee shall establish Performance
Goals for Bonus Awards for the Plan Year; provided, that such Performance Goals
may be established at a later date for participants who are not Covered
Employees. Bonus amounts payable to any individual participant with respect to a
Plan Year will be limited to a maximum of $10 million. To the extent provided by
the Committee, a participant may elect to defer receipt of amounts payable under
a Bonus Award for a specified period, or until a specified event, subject in
each case to the Committee's approval and to such terms as are determined by the
Committee.
(b) Payment of Awards. Bonus Awards under the Plan shall be paid in
cash or in shares of Common Stock (valued at Fair Market Value as of the date of
payment) as determined by the Committee, as soon as practicable following the
close of the Plan Year, but in any event within 90 days
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following the close of the Plan Year. The Bonus Award for any Plan Year to any
participant may be reduced or eliminated by the Committee in its discretion.
(c) Termination of Employment. A participant shall not be entitled to
receive payment of a Bonus Award, unless the annual Performance Goals for the
Plan Year are satisfied or as otherwise set forth in Section 11, if at any time
prior to the end of the Plan Year the participant has a Termination of
Employment for any reason other than death or Disability.
SECTION 11. Change In Control Provisions
(a) Impact of Event. Notwithstanding any other provision of the Plan to
the contrary, upon a Change in Control:
(i) Any Stock Options and Stock Appreciation Rights outstanding
as of the date of such Change in Control, and which are not then
exercisable and vested, shall become immediately fully exercisable and
vested.
(ii) The restrictions and deferral limitations applicable to any
Restricted Stock shall immediately lapse, and such Restricted Stock
shall become free of all restrictions and become fully vested and
transferable to the full extent of the original grant.
(iii) All Performance Units shall be considered to be immediately
earned and payable in full, and any deferral or other restriction shall
lapse and such Performance Units shall be settled in cash or shares of
Common Stock, as determined by the Committee, as promptly as is
practicable.
(iv) To the extent determined by the Committee, Bonus Awards may
be paid in whole or in part to participants notwithstanding the
attainment of Performance Goals.
(b) Definition of Change in Control. For purposes of the Plan, unless
otherwise provided in an option agreement or other agreement relating to an
Award, a "Change in Control" shall mean the happening of any of the following
events:
(i) The acquisition by any individual entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other
than Barry Diller, Liberty Media Corporation, Universal Studios, Inc.
and their respective Affiliates (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of equity securities of the Corporation representing more than 50% of
the voting power of the then outstanding equity securities of the
Corporation entitled to vote generally in the election of directors
(the "Outstanding Corporation Voting Securities"); provided, however,
that for purposes of this subsection (i), the following acquisitions
shall not constitute a Change of Control: (A) any acquisition by the
Corporation, (B) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Corporation or any
corporation controlled by the Corporation, or (C) any acquisition by
any corporation pursuant to a transaction which complies with clauses
(A), (B) and (C) of subsection (iii); or
(ii) Individuals who, as of February 22, 2000, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to February 22, 2000, whose election, or
nomination for election by the Corporation's shareholders, was approved
by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
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(iii) Approval by the stockholders of the Corporation of a
reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Corporation or the
purchase of assets or stock of another entity (a "Business
Combination"), in each case, unless immediately following such Business
Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Corporation
Voting Securities immediately prior to such Business Combination will
beneficially own, directly or indirectly, more than 50% of the then
outstanding combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of
the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction
owns the Corporation or all or substantially all of the Corporation's
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Corporation
Voting Securities, (B) no Person (excluding Barry Diller, Liberty Media
Corporation, Universal Studios, Inc. and their Affiliates, any employee
benefit plan (or related trust) of the Corporation or such corporation
resulting from such Business Combination) will beneficially own,
directly or indirectly, more than a majority of the combined voting
power of the then outstanding voting securities of such corporation
except to the extent that such ownership of the Corporation existed
prior to the Business Combination and (C) at least a majority of the
members of the board of directors of the Corporation resulting from
such Business Combination will have been members of the Incumbent Board
at the time of the initial agreement, or action of the Board, providing
for such Business Combination; or
(iv) Approval by the stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation.
(c) Change in Control Price. For purposes of the Plan, "Change in
Control Price" means the higher of (i) the highest reported sales price, regular
way, of a share of Common Stock in any transaction reported on the New York
Stock Exchange Composite Tape or other national exchange on which such shares
are listed or on NASDAQ during the 60-day period prior to and including the date
of a Change in Control or (ii) if the Change in Control is the result of a
tender or exchange offer or a Business Combination, the highest price per share
of Common Stock paid in such tender or exchange offer or Business Combination;
provided, however, that in the case of Incentive Stock Options and Stock
Appreciation Rights relating to Incentive Stock Options, the Change in Control
Price shall be in all cases the Fair Market Value of the Common Stock on the
date the right set forth in Section 5(k) is exercised. To the extent that the
consideration paid in any such transaction described above consists all or in
part of securities or other noncash consideration, the value of such securities
or other noncash consideration shall be determined in the sole discretion of the
Board.
SECTION 12. Term, Amendment And Termination
The Plan will terminate 10 years after the effective date of the Plan;
provided, that the Plan Awards outstanding as of such date shall not be affected
or impaired by the termination of the Plan.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the rights of an
optionee under a Stock Option or a recipient of a Stock Appreciation Right,
Restricted Stock Award, Performance Unit Award or Bonus Award theretofore
granted without the optionee's or recipient's consent. In addition, no such
amendment shall be made without the approval of the Corporation's stockholders
to the extent such approval is required by law or agreement.
The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment shall
impair the rights of any holder of such Award without the holder's consent.
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Subject to the above provisions, the Board shall have authority to
amend the Plan to take into account changes in law and tax and accounting rules
as well as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.
SECTION 13. Unfunded Status Of Plan
It is presently intended that the Plan constitute an "unfunded" plan
for incentive and deferred compensation. The Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Common Stock or make payments; provided, however, that
unless the Committee otherwise determines, the existence of such trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan.
SECTION 14. General Provisions
(a) The Committee may require each person purchasing or receiving
shares pursuant to an Award to represent to and agree with the Corporation in
writing that such person is acquiring the shares without a view to the
distribution thereof. The certificates for such shares may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer.
Notwithstanding any other provision of the Plan or agreements made
pursuant thereto, the Corporation shall not be required to issue or deliver any
certificate or certificates for shares of Common Stock under the Plan prior to
fulfillment of all of the following conditions:
(1) Listing or approval for listing upon notice of issuance, of
such shares on NASDAQ or on the New York Stock Exchange, Inc., or such
other securities exchange as may at the time be the principal market
for the Common Stock;
(2) Any registration or other qualification of such shares of the
Corporation under any state or federal law or regulation or the
maintaining in effect of any such registration or other qualification
which the Committee shall, in its absolute discretion upon the advice
of counsel, deem necessary or advisable; and
(3) Obtaining any other consent, approval, or permit from any state
or federal governmental agency which the Committee shall, in its
absolute discretion after receiving the advice of counsel, determine to
be necessary or advisable.
(b) Nothing contained in the Plan shall prevent the Corporation or any
subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.
(c) Adoption of the Plan shall not confer upon any employee any right
to continued employment, nor shall it interfere in any way with the right of the
Corporation or any subsidiary or Affiliate to terminate the employment of any
employee at any time.
(d) No later than the date as of which an amount first becomes
includible in the gross income of the participant for federal income tax
purposes with respect to any Award under the Plan, the participant shall pay to
the Corporation, or make arrangements satisfactory to the Corporation regarding
the payment of, any federal, state, local or foreign taxes of any kind required
by law to be withheld with respect to such amount. Unless otherwise determined
by the Corporation, withholding obligations may be settled with Common Stock,
including Common Stock that is part of the Award that gives rise to the
withholding requirement. The obligations of the Corporation under the Plan shall
be conditional on such payment or arrangements, and the Corporation and its
Affiliates shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment otherwise due to the participant. The Committee may
establish such procedures as it deems appropriate, including making irrevocable
elections, for the settlement of withholding obligations with Common Stock.
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(e) Reinvestment of dividends in additional Restricted Stock at the
time of any dividend payment with respect to Restricted Stock shall only be
permissible if sufficient shares of Common Stock are available under Section 3
for such reinvestment (taking into account then outstanding Stock Options and
other Awards).
(f) The Committee shall establish such procedures as it deems
appropriate for a participant to designate a beneficiary to whom any amounts
payable in the event of the participant's death are to be paid or by whom any
rights of the participant, after the participant's death, may be exercised.
(g) In the case of a grant of an Award to any employee of a subsidiary
or other Affiliate of the Corporation, the Corporation may, if the Committee so
directs, issue or transfer the shares of Common Stock, if any, covered by the
Award to the subsidiary or such other Affiliate, for such lawful consideration
as the Committee may specify, upon the condition or understanding that the
subsidiary will transfer the shares of Common Stock to the employee in
accordance with the terms of the Award specified by the Committee pursuant to
the provisions of the Plan.
(h) The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware,
without reference to principles of conflict of laws.
SECTION 15. Effective Date Of Plan
The Plan shall be effective as of February 22, 2000, the date it was
approved by the Board, subject to later approval by the Corporation's
stockholders; provided, however, that no Awards may be exercised or paid out
prior to receipt of such stockholder approval.
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