-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, G/GskzBM7+sKBii0HxH4JoBEwgubm39tcZcAT+0mYRiCIbFot0yT6Q6BMcqYlqK4 6QKHPCpaG7z2HXAnGO6o4g== 0000950144-94-000748.txt : 19940330 0000950144-94-000748.hdr.sgml : 19940330 ACCESSION NUMBER: 0000950144-94-000748 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19940329 19940417 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOME SHOPPING NETWORK INC CENTRAL INDEX KEY: 0000791024 STANDARD INDUSTRIAL CLASSIFICATION: 5961 IRS NUMBER: 592649518 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 33 SEC FILE NUMBER: 033-52869 FILM NUMBER: 94518801 BUSINESS ADDRESS: STREET 1: 11831 30TH COURT NORTH CITY: ST PETERSBURG STATE: FL ZIP: 33716 BUSINESS PHONE: 8135728585 S-8 1 HOME SHOPPING NETWORK S-8 1 As filed with the Securities and Exchange Commission on March 29, 1994. 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.) 11831 30th Court North St. Petersburg, Florida 33716 (Address, including zip code, of registrant's principal executive offices) ____________________ STOCK OPTION AGREEMENT BETWEEN HOME SHOPPING NETWORK, INC. AND FRANCIS SANTANGELO STOCK OPTION AGREEMENT BETWEEN HOME SHOPPING NETWORK, INC. AND VERNON J. TROUPE EMPLOYMENT AGREEMENT BETWEEN HOME SHOPPING NETWORK, INC. AND GERALD F. HOGAN (Full title of the Plans) ____________________ H. Steven Holtzman, Esq. Senior Counsel 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)
- -------------------------------------------------------------------------------------------------------- Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of to be Registered Registered Offering Price Aggregate Registration Fee Per Share Offering Price Common Stock 1,104,876 (1) $13.3125(2) $14,708,662 $5,072 Shares - --------------------------------------------------------------------------------------------------------
2 (1) Includes 984,876 shares underlying stock appreciation rights ("SARs"). The exact number of shares of Home Shopping Network, Inc. common stock, $.01 par value ("Common Stock") to be issued upon exercise cannot be presently determined, but is expected to be fewer than the amount registered hereunder. (2) The average of the high and low reported sale prices of the Common Stock on March 25, 1994 has been used for the purpose of calculating the registration fee pursuant to Rule 457(c). 2 3 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 as of their respective dates in this Registration Statement by reference: 1. Annual Report on Form 10-K for the year ended December 31, 1993. 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, 1993. 3. The description of the Company's Common Stock contained in the Company's registration statement filed 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. 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. Item 4. Description of Securities The authorized capital stock of the Company consists of 150,000,000 shares of Common Stock; 24,159,456 shares of Class B common stock, par value $.01 ("Class B Common Stock"); and 500,000 shares of Preferred Stock, $.01 par value. On March 18, 1994, a total of 73,920,285 shares of Common Stock (net of shares held in treasury), and 20,000,000 shares of Class B Common Stock were outstanding and are fully paid and non-assessable and have no preemptive rights. Common Stock The holders of both classes of Common Stock are entitled to receive such dividends, if any, as may be declared by the Board of 3 4 Directors out of funds legally available for the payment of dividends. The current policy of the Board of Directors, however, is to retain earnings for the growth of the Company. In the event of the liquidation, dissolution or winding up of the Company, the holders of both classes of Common Stock are entitled to share ratably in all assets of the Company remaining after provision for payment of liabilities. Shares of Class B Common Stock are convertible at the option of the holder into shares of Common Stock of the Company on a share for share basis. Upon conversion of the Class B Common Stock, the shares of Class B Common Stock so converted will be retired and are not subject to reissue. Each outstanding share of Class B Common Stock is entitled to ten votes per share and the holders of Class B Common Stock vote together with the holders of Common Stock on all matters submitted to stockholders except for the election of 25% of the Board of Directors. Holders of Common Stock have the right to elect, and the holder of Class B Common Stock has no vote with respect to, 25% of the entire Board of Directors, rounded upward to the nearest whole number of directors. As to the election of the remaining directors, the holder of Class B Common Stock is entitled to ten votes for each share of Class B Common Stock, and the holders of the Common Stock are entitled to one vote per share. There are no cumulative voting rights. By reason of its ownership of all of the outstanding shares of Class B Common Stock, Liberty HSN, Inc. ("LHSNI"), a Wyoming corporation and a wholly owned subsidiary of Liberty Media Corporation, a Delaware corporation, may elect the directors of the Company other than the 25% of the Board which is reserved for election by the holders of Common Stock. The difference in voting rights described above also would enable LHSNI to be able to block any takeover attempt directed at the Company. Preferred Stock No Preferred Stock is presently outstanding and none will be issued as a result of this offering. Preferred Stock may be issued from time to time in one or more series. The Board of Directors is authorized to determine the relative rights, preferences and restrictions granted to and imposed upon any unissued series of the Preferred Stock and the designation of such series. Preferred Stock may be issued with rights, preferences and restrictions designed to prevent a takeover of the Company. Stock Appreciation Rights Effective as of February 23, 1993, Gerald F. Hogan, President and Chief Executive Officer of the Company, entered into a four-year employment agreement with the Company which is automatically renewable for successive one year terms unless either party provides 180 days written notice to the other party. Pursuant to 4 5 the agreement, Mr. Hogan received SARs with respect to 984,876 shares of the Company's Common Stock at an exercise price of $8.25 per share. The SARs vest over a four year period with one-fourth of the SARs vesting on each anniversary of the effective date commencing with February 23, 1994. The SARs are exercisable in whole or in part until February 23, 2003 unless terminated earlier. The SARs will vest upon termination of employment other than for cause and will be exercisable for up to one year following the termination of employment. In the event of a change in control, whether or not Mr. Hogan has elected to terminate his employment, all unvested SARs will vest immediately prior to the change in control so that all SARs may be exercised no later than the time at which the change in control becomes effective. In the event Mr. Hogan's employment is terminated following a change in control, the vested SARs shall remain exercisable for a one year period following such termination. Upon exercise of a vested SAR, Mr. Hogan could receive cash in an amount equal to the excess of the fair market value of each share of Common Stock over $8.25. As long as the Company is a public company, Mr. Hogan may elect to receive stock in lieu of the cash exercise value of SARs. In the event the Company ceases to be a public company, SARs may not be exercised on more than three separate occasions and may not be exercised more than once in any fiscal year of the Company during the period in which the Company is not a public company. The SARs also will vest in the event of death or disability and shall remain exercisable for a one-year period. In the event of a stock dividend, recapitalization, reorganization, split-up, spin-off, combination, exchange of shares, warrants or rights offering to purchase Common Stock or other similar corporate event, appropriate adjustments will be made to the number and kind of shares subject to SARs and to the strike price of the SARs. SARs may be exercised by delivery to the Company of a written notice specifying the whole number of shares of Common Stock as to which SARs are being exercised. A change in control will be deemed to occur if Liberty ceases to be the sole beneficial owner of the Company's voting securities having a majority of the outstanding voting power of the Company or if Liberty experiences a change in control. Transfer Agent and Registrar The transfer agent and registrar for the Company's Common Stock is Bank of New York. New York Stock Exchange Listing The Company's Common Stock is listed on the New York Stock Exchange. Item 5. Interests of Named Experts and Counsel (Not Applicable) 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 5 6 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 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. 6 7 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 7. Exemption from Registration Claimed. (Not Applicable) Item 8. Exhibits 4.1 Stock Option Agreement Between Home Shopping Network, Inc. and Francis Santangelo 4.2 Stock Option Agreement between Home Shopping Network, Inc. and Vernon J. Troupe 4.3 Employment Agreement between Home Shopping Network, Inc. and Gerald F. Hogan 5 Opinion of Baker & McKenzie 23.1 Consent of KPMG Peat Marwick 23.2 Consent of Deloitte & Touche 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 1933 Act; (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, 7 8 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 Securities Exchange Act of 1934 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 Securities Act of 1933, 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 Securities Exchange Act of 1934; 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. 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 8 9 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. 9 10 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 29th day of March, 1994. 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. /s/ Gerald F. Hogan President, Chief March 29, 1994 - ------------------- Executive Officer and --------------------- Gerald F. Hogan Director (Principal Executive Officer) /s/ Kevin J. McKeon Senior Vice President March 29, 1994 - ------------------- of Accounting & Finance --------------------- Kevin J. McKeon (Principal Financial and Accounting Officer)
10 11 /s/ Robert R. Bennett Director March 4, 1994 - --------------------- ------------------ Robert R. Bennett /s/ John M. Draper Director March 4, 1994 - ---------------------- ------------------ John M. Draper /s/ J. Anthony Forstmann Director March 4, 1994 - ------------------------ ------------------ J. Anthony Forstmann /s/ Leo J. Hindery, Jr. Director March 4, 1994 - ----------------------- ------------------ Leo J. Hindery, Jr. /s/ George C. McNamee Director March 4, 1994 - --------------------- ------------------ George C. McNamee
11 12 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION OF DOCUMENT PAGE ------- ----------------------- ---- 4.1 Stock Option Agreement between 14 Home Shopping Network, Inc. and Francis Santangelo 4.2 Stock Option Agreement between 18 Home Shopping Network, Inc. and Vernon J. Troupe 4.3 Employment Agreement between Home 20 Shopping Network, Inc. and Gerald F. Hogan 5 Opinion of Baker & McKenzie 39 23.1 Consent of KPMG Peat Marwick 41 23.2 Consent of Deloitte & Touche 43 24 Powers of Attorney (set forth on Signature page). 12 EX-4.1 2 STOCK OPTION AGREEMENT 1 EXHIBIT 4.1 STOCK OPTION AGREEMENT AGREEMENT between HOME SHOPPING NETWORK, INC., a Delaware corporation (the "Company"), and FRANCIS SANTANGELO, a consultant to the Company (the "Santangelo"). WHEREAS, on September 25, 1990, the Board of Directors of the Company granted to Santangelo certain stock options as a consultant to the Company; WHEREAS, subsequent actions of the Board of Directors and the Compensation/Benefits Committee of the Board of Directors amended certain terms of the option; WHEREAS, the Company and Santangelo desire to enter into an agreement setting forth the terms of the option, as amended through the date hereof; NOW, THEREFORE, the Company and Santangelo agree as follows: 1. STOCK OPTION GRANT. This Agreement evidences the grant of an option (the "Option") to purchase shares of Common Stock of the Company subject to the terms and conditions of this Agreement. 2. DATE OF GRANT. The grant of the Option is effective as of September 25, 1990 and the Option shall be exercisable as provided in this Agreement. 3. NUMBER AND PRICE OF SHARES. The number of shares subject to the Option is One Hundred Thousand (100,000). The purchase price per share of Common Stock is $4.405 as of the date of this Agreement. 4. OPTION PERIOD AND TIME OF EXERCISE. The number of shares specified in paragraph three above are divided into five parts which may be exercisable within the option period as follows:
Date On and Date Before After Which Which Part Number Part is Must be Part of Shares Exercisable Exercised ---- --------- ----------- --------- 1 20,000 September 25, 1991 September 25, 1996 2 20,000 September 25, 1992 September 25, 1997 3 20,000 September 25, 1993 September 25, 1998 4 20,000 September 25, 1994 September 25, 1999 5 20,000 September 25, 1995 September 25, 2000
(i) Subject to subparagraph (ii) below, upon the termination of the consulting arrangement for any reason, options granted hereunder shall be canceled only to the extent that such options were not exercisable as of the date of such termination. 2 (ii) Following both (a) a change in control of the Company after March 17, 1992 and (b) the termination of Santangelo's consulting arrangement with the Company at any time subsequent to March 17, 1992 for reasons other than "just cause", as defined below, such Option shall immediately become exercisable and fully vested with respect to all of the shares of Common Stock subject to such Option and such fully-vested option shall be exercisable for a five year period. The exercise period for any previously vested option shall not be extended by this paragraph. A change in control shall be deemed to have occurred if (i) the Company is merged or consolidated with another entity (the "Merger Partner") and as a result of such merger or consolidation less than 15% of the outstanding voting securities of the surviving or resulting entity shall be owned in the aggregate by the former control shareholder of the Company, or (ii) in the event that any person, other than an owner of Class B Common Stock of the Company on June 16, 1992, becomes the beneficial owner, either directly or indirectly, of more than 50% of the total votes of issued and outstanding shares of Common Stock and Class B Common Stock, if any, of the Company, when computed together. Termination for "just cause" shall be limited to a termination resulting from an act or acts of dishonesty constituting gross malfeasance, common law fraud or a felony and which act or acts result, or are intended to result directly or indirectly, in the gain or personal enrichment of the option holder at the expense of the Company. The burden of proof to establish just cause shall be on the Company. Any dispute concerning whether a termination has been for just cause shall be settled by arbitration in Tampa, Florida pursuant to the commercial arbitration rules of the American Arbitration Association. If any action in any arbitration proceeding or any court is necessary to enforce or interpret the terms of this paragraph, the prevailing party shall be entitled to actual attorneys' fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. (iii) In no event shall the option be exercisable after the expiration date of the option period. 5. MANNER OF EXERCISE. Subject to the conditions and restrictions contained in paragraph 6 below, the Option shall be exercised by delivering written notice of exercise to the Secretary of the Company. Such notice is irrevocable and must be accompanied by payment in cash or such other form as the Company may approve. 6. NON-TRANSFERABILITY. This Agreement and the option granted may not be assigned or transferred by Santangelo. 7. ADJUSTMENT IN THE EVENT OF CHANGE IN STOCK. In the event of any change in the outstanding Common Stock of the Company due to stock dividends, recapitalizations, reorganizations, mergers, consolidations, split-ups, combinations or exchanges of shares, the number and kind of shares under the Option and the purchase price per share will be appropriately adjusted consistent with such 3 change. The determination of the Company regarding any adjustment will be final and conclusive. 8. AMENDMENT. Neither this Agreement nor the Option may be amended or modified or revoked except by agreement in writing and signed by the Company and Santangelo. 9. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement between the Company and Santangelo with respect to the Option and supersedes all other agreements heretofore entered into. IN WITNESS WHEREOF, the Company and Santangelo have executed this Agreement as of the 29th day of July, 1993. HOME SHOPPING NETWORK, INC. By: /s/ Gerald F. Hogan ------------------------------------ /s/ Francis R. Santangelo ------------------------------------ Francis Santangelo EX-4.2 3 STOCK OPTION AGREEMENT - VERNON J. TROUPE 1 EXHIBIT 4.2 STOCK OPTION AGREEMENT AGREEMENT between HOME SHOPPING NETWORK, INC., a Delaware corporation (the "Company"), and VERNON J. TROUPE, a consultant to the Company (the "Troupe"). WHEREAS, in connection with the spin-off of the Company's subsidiary, Precision Systems, Inc., on July 31, 1992, the Company agreed to retain the services of Vernon J. Troupe as a consultant to the Company; WHEREAS, in connection with the consulting arrangement, the Company agreed to grant to Troupe certain stock options; WHEREAS, the Company and Troupe desire to enter into an agreement setting forth the terms of the option as of the date hereof; NOW, THEREFORE, the Company and Troupe agree as follows: 1. STOCK OPTION GRANT. This Agreement evidences the grant of an option (the "Option") to purchase shares of Common Stock of the Company subject to the terms and conditions of this Agreement. 2. DATE OF GRANT. The grant of the Option is effective as of December 15, 1992 and the Option shall be exercisable as provided in this Agreement. 3. NUMBER AND PRICE OF SHARES. The number of shares subject to the Option is Twenty Thousand (20,000). The purchase price per share of Common Stock is $5.448 as of the date of this Agreement. 4. OPTION PERIOD AND TIME OF EXERCISE. The number of shares specified in paragraph three above may be exercisable on or after December 15, 1992 and before December 15, 1997. In no event shall the option be exercisable after the expiration date of the option period. 5. MANNER OF EXERCISE. Subject to the conditions and restrictions contained in paragraph 6 below, the Option shall be exercised by delivering written notice of exercise to the Secretary of the Company. Such notice is irrevocable and must be accompanied by payment in cash or such other form as the Company may approve. 6. NON-TRANSFERABILITY. This Agreement and the option granted may not be assigned or transferred by Troupe. 7. ADJUSTMENT IN THE EVENT OF CHANGE IN STOCK. In the event of any change in the outstanding Common Stock of the Company due to stock dividends, recapitalizations, reorganizations, mergers, consolidations, split-ups, combinations or exchanges of shares, the 2 number and kind of shares under the Option and the purchase price per share will be appropriately adjusted consistent with such change. The determination of the Company regarding any adjustment will be final and conclusive. 8. AMENDMENT. Neither this Agreement nor the Option may be amended or modified or revoked except by agreement in writing and signed by the Company and Troupe. 9. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement between the Company and Troupe with respect to the Option and supersedes all other agreements heretofore entered into. IN WITNESS WHEREOF, the Company and Troupe have executed this Agreement this _____day of September, 1993. HOME SHOPPING NETWORK, INC. By: /s/ Gerald F. Hogan ------------------------------------ Gerald F. Hogan, President and Chief Executive Officer /s/ Vernon J. Troupe ------------------------------------ Vernon J. Troupe EX-4.3 4 EMPLOYMENT AGREEMENT - GERALD F. HOGAN 1 EXHIBIT 4.3 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT dated as of February 23, 1993 between HOME SHOPPING NETWORK, INC., a Delaware corporation (the "Company"), and GERALD F. HOGAN ("Executive"). This Agreement sets forth the terms and conditions of Executive's employment by the Company as the Company's President and Chief Executive Officer. In consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, do hereby agree as follows: 1. Term and Termination. (a) Term. The term of Executive's employment under this Agreement (the "Employment Term") shall commence on the date hereof (the "Effective Date") and end on the fourth anniversary of such date. The Employment Term shall be automatically extended beyond the original four year term for successive one year terms unless at least one hundred eighty (180) days prior to the expiration of the original Employment Term or any subsequent renewal thereof, either party notifies the other party in writing that it is electing to terminate this Agreement at the expiration of the then current term. During the Employment Term, the Company agrees to employ Executive and Executive agrees to serve the Company upon and subject to the terms and conditions set forth in this Agreement. (b) Termination by the Company. Executive's employment by the Company may be terminated by the Company only as provided in clauses (i), (ii), (iii) and (iv) below. (i) Upon the death of Executive. (ii) Upon six (6) months' prior written notice from the Company to Executive (the "Notice Period"), in the event of an illness or other disability which has incapacitated Executive from performing his duties hereunder, as determined in good faith by the Board of Directors of the Company, for an aggregate of one hundred eighty (180) consecutive days during the twelve calendar months preceding the month in which such notice is given; provided, however, that in the event that prior to the end of the Notice Period, Executive recovers from such illness or other disability to an extent permitting him to perform his duties hereunder, the notice of termination pursuant to this clause (ii) shall be of no further force and effect. 2 (iii) At any time upon giving written notice of such termination to Executive and by paying Executive in a lump sum upon such termination an amount equal to (x) Annual Base Salary (as hereinafter defined) that would have been payable to Executive had his employment by the Company continued until the expiration of the Employment Agreement plus (y) the amount of Annual Bonus (as hereinafter defined) that Executive would have been entitled to receive had his employment by the Company continued until the end of the fiscal year in which such termination occurred (such amount of Annual Bonus is hereinafter referred to as the "Remainder Bonus"). (iv) At any time for "Cause", which for purposes of this Agreement shall be deemed to have occurred only on the happening of any of the following: (A) the plea of guilty to, or conviction for, the commission of a felony offense by Executive; provided, however, that after indictment, the Company may suspend Executive from the rendition of services, but without limiting or modifying in any other way the Company's obligations under this Agreement, (B) a material breach by Executive of a material fiduciary duty owed to the Company; (C) a material breach by Executive of any of the covenants made by him in Sections 6 and 7 hereof; or (D) the willful and gross neglect by Executive of the material duties specifically and expressly required by this Agreement; provided, however, that any claim that "Cause", within the meaning of clauses (B), (C) or (D) above, exists for the termination of Executive's employment may be asserted on behalf of the Company only by a resolution duly adopted by two-thirds of the total number of members of the Board of Directors of the Company, and on]y after 15 days prior written notice to Executive during which period he may cure the breach or neglect that is the basis of any such claim, if curable; provided, further, that no state of facts that, with or without notice to Executive or the passage of time or both, would give rise to the right of the Company to terminate Executive's employment pursuant to clause (ii) of this Section 1(b) may, directly or indirectly, in whole or in part, be the basis for a claim that Cause, within the meaning of clause (D) above, exists for the termination of Executive's employment; provided, further, that during the period of twelve (12) months following a Change in Control (as hereinafter defined), Cause shall be deemed to have occurred only upon the happening of an event referred to in clause (A) above; and provided, further, that the term "material" as used in clauses (B), (C) and (D) above and in Section 10 hereof shall be construed by reference to the effect of the relevant action or omission on the Company and its subsidiaries taken as a whole. 2 3 (c) Effect of Termination by the Company. If Executive's employment is terminated by the Company pursuant to Section 1 (b) hereof, all Annual Base Salary and Annual Bonus (to the extent not otherwise included in Remainder Bonus) that has accrued in favor of Executive as of the date of such termination, to the extent unpaid or delivered, shall be paid or delivered to Executive on the date of termination. If Executive dies while employed by the Company or during the period that he is receiving payments pursuant to the immediately succeeding sentence and, in either case, prior to the expiration of the Employment Term, the Company shall, as promptly as practicable following Executive's death, pay to Executive's designated beneficiary or beneficiaries in a lump sum an amount equal to the Annual Base Salary that would have been payable to Executive had his employment by the Company continued until the expiration of the Employment Term plus the Remainder Bonus. If Executive's employment is terminated pursuant to Section 1(b)(ii) of this Agreement, the Company shall (i) continue to pay to Executive his Annual Base Salary as and when the same would otherwise be due in accordance with Section 4 of this Agreement until the first to occur of the expiration of the Employment Term or the date of Executive's death and (ii) pay the Remainder Bonus to Executive on the date of such termination. The amounts payable by the Company pursuant to the foregoing two sentences shall be reduced by the amount of any long term disability benefits paid directly to Executive pursuant to any benefit or welfare plans maintained by the Company for Executive's benefit. The phrase "designated beneficiary or beneficiaries" shall mean the person or persons named from time to time by Executive in a signed instrument filed for this purpose with the Company. If the designation made in any such signed instrument shall for any reason be ineffective, the phrase "designated beneficiary or beneficiaries" shall mean Executive's estate. With respect to the payment of Annual Base Salary in respect of time periods subsequent to the date of termination of Executive's employment with the Company, such amount shall be calculated at the annual rate of Executive's Annual Base Salary in effect at the time of termination and the calculation of the remaining Employment Term shall be made without consideration of any renewal thereof, unless at the time of such termination such renewal would otherwise be automatic. With respect to the payment of the Remainder Bonus, such amount shall be the amount which would have been payable to Executive as his Annual Bonus in accordance with the applicable Company plan or program had Executive's employment continued until the end of the fiscal year of the Company in which such termination occurred, but without regard to any requirement in such plan that Executive be employed by the Company at any time following the conclusion of such succeeding fiscal year in order to receive his Annual Bonus; provided however, that in the event Executive's employment is terminated as a result of his death or disability, the amount of the Remainder Bonus shall be not less than the amount paid or payable to Executive in respect of the immediately preceding fiscal year of the Company. (d) Termination by Executive. The Executive's employment may be terminated during the Employment Term by the Executive (i) for Good Reason or (ii) without any reason during the twelve (12) month period immediately following a Change in Control. For purposes of this Agreement, "Good Reason" shall mean (i) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting 3 4 requirements), authority, duties or responsibilities as contemplated by Section 2 of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (ii) any material breach of this Agreement by the Company which is not remedied by the Company promptly after receipt of notice thereof given by the Executive; (iii) any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; (iv) any failure by the Company to comply with and satisfy Section 13 of this Agreement; or (v) failure to reelect Executive as a member of the Board of Directors or the removal of Executive as a member of such Board. For purposes of this subsection (d), a determination of "Good Reason" by the Executive which is reasonable and is made in good faith shall be conclusive. (c) Effect of Termination by the Executive. If Executive terminates his employment with the Company pursuant to Section 1(d) of this Agreement, or if the Company terminates the Executive's employment under this Agreement in any way that is breach of this Agreement by the Company, the Company shall pay to Executive in a lump sum upon such termination an amount in cash equal to (i) all Annual Base Salary that has accrued in favor of Executive as of the date of termination, to the extent unpaid or delivered, (ii) the Annual Base Salary that would have been payable to Executive had his employment by the Company continued until the expiration of the Employment Term and (iii) the Remainder Bonus. (f) Survival. Upon termination of Executive's employment and payment of the amounts due Executive pursuant to Section 1 of this Agreement, the obligations of the Company and the Executive under this Agreement shall terminate, except that the Company's obligations with respect to the payment of amounts upon the death or disability of Executive set forth in the second and third sentences of Section 1(c) (if and to the extent applicable), Section 1(h) (Continuation of Benefits), Section 4(e) (Indemnification), Section 5 (Reimbursement of Expenses) (as it relates to the expenses incurred prior to such termination, including, without limitation, relocation expense incurred pursuant to Section 5(c) and Schedule 5(c)), Section 12 (SARs) and Section 13 (Successors), and the Executive's obligations under Sections 6 (Noncompetition), 7 (Confidentiality), 8 (Delivery of Materials) and 9 (Noninterference), will survive (in accordance with the terms and conditions thereof) any such termination. (g) Change of Control. For purposes of this Agreement, a "Change of Control" shall be deemed to have occurred as of the date upon which either (x) Liberty Media Corporation 4 5 ("Liberty", which term shall include any successor corporation, partnership or other entity formed as a result of or in connection with any pro rata distribution of securities or the right to acquire securities to the holders of securities of Liberty, provided that the condition of clause (y) of this Section 1(g) hereof continues to be satisfied) ceases to be the sole "beneficial owner" (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of Voting Securities (as hereinafter defined) having a majority of the outstanding Voting Power (as hereinafter defined) of the Company or (y) the individuals and entities beneficially own Voting Securities of Liberty on the date of this Agreement cease to beneficially own Voting Securities having a majority of the outstanding Voting Power of Liberty. As used herein, the following terms shall have the following meanings: (i) "Voting Securities" shall mean any securities of the Company or Liberty, as the case may be, entitled, or which may be entitled, to vote on matters submitted to stockholders generally (whether or not entitled to vote generally in the election of directors), or securities which are convertible into, or exercisable or exchangeable for such Voting Securities, whether or not subject to the passage of time or any contingency; and (ii) "Voting Power" shall mean the number of votes available to be cast (determined by reference to the maximum number of votes entitled to be cast by the holders of such Voting Securities (or by the holders of any other Voting Securities into which such Voting Securities may be convertible, exercisable or exchangeable for, whichever yields the highest number of votes) upon any matter submitted to stockholders where the holders of all Voting Securities vote together as a single class) by the holders of Voting Securities. (h) Continuation of Certain Benefits. In the event Executive's employment is terminated for any reason other than for Cause, then for the remainder of the Employment Term the Company shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with this Agreement if the Executive's employment had not been terminated, in accordance with the most favorable plans, practices, programs or policies of the Company as in effect and applicable generally to other executives and their families; provided, however, that the Company may terminate such benefits if the Executive becomes reemployed with another employer and is eligible to receive similar benefits under such subsequent employer's benefit plans. For purposes of determining eligibility of the Executive for retiree benefits pursuant to the Company's plans, practices, programs and policies, the Executive shall be considered to have remained employed until the end of the Employment Term and to have retired on the last day of such period. (2) Services to be Rendered by Executive. the Company and Executive agree that Executive will serve the Company as its President and Chief Executive Officer and shall have the rights, powers, duties and obligations relating to such offices as is specified in the By-laws of the Company as in effect on the date of this Agreement. In such capacity, Executive shall perform all reasonable acts customarily associated with such positions, or necessary or desirable to protect and advance the best interests of the Company. Executive shall perform such acts and carry out such duties, and shall in all other respects serve the Company faithfully and to the best of his ability. 5 6 3. Time to be Devoted by Executive. Executive agrees to devote substantially all of his business time, attention, efforts and abilities to the business of the Company and to use his best efforts to promote the interests of the Company. During the Employment Term it shall not be a violation of this Agreement for the Executive to (i) serve on corporate, civic or charitable boards or committees, (ii) fulfill speaking engagement and (iii) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Company in accordance with this Agreement. 4. Compensation. (a) Salary. During the Employment Term, the Executive shall receive an annual base salary of not less than $500,000 ("Annual Base Salary"), which shall be paid on a semi-monthly basis. (b) Annual Bonus. In addition to Annual Base Salary, if the Compensation Committee of the Board of Directors of the Company adopts an annual bonus program for its executive employees generally, the Executive shall be entitled to participate in such program and be paid on an annual basis such bonus amount ("Annual Bonus") as determined by such Committee. (c) Benefits. During the Employment Term, the Executive (including, where applicable, Executive's family) shall be entitled to benefits in accordance with the welfare benefit and incentive plans, practices, programs and policies of the Company (including, but not limited to, retirement, savings, incentive and stock compensation plans, employee stock purchase plans, medical, death and disability, and life and other insurance plans and policies). (d) Vacation. During the Employment Term, the Executive shall be entitled to four weeks of paid vacation per year or such longer period as may be provided by the Company in accordance with the plans, policies, programs and practices of the Company applicable to executives of the Company generally. (e) Indemnification. (i) In addition to any separate agreements between Executive and the Company relating to indemnification, the Company will indemnify and hold harmless Executive, to the fullest extent permitted by applicable law, in respect of any liability, damage, cost or expense (including reasonable counsel fees) incurred in connection with the defense of any claim, action, suit or proceeding to which he is a party, or threat thereof, by reason of his being or having been an officer or director of the Company or any subsidiary or affiliate of the Company, or his serving or having served at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, business organization, enterprise or other entity, including service with respect to employee benefit plans. Without limiting the generality of the foregoing, the Company will pay the expenses (including reasonable counsel fees) of 6 7 defending any such claim, action, suit or proceeding in advance of its final disposition, upon receipt of an undertaking by Executive to repay all amounts advanced if it should ultimately be determined that Executive is not entitled to be indemnified under this Section. (ii) In addition to the foregoing, the Company agrees to pay promptly as incurred, to the full extent permitted by law, all legal fees and expenses incurred by Executive in connection with the defense (including in connection with the defense of counterclaims or cross-claims) of any claim, action, suit or proceeding relating to the enforcement by the Company (including claims, actions, suits or proceedings brought in the right of the Company) of the provisions of Sections 6, 7, 8 or 9 of this Agreement; provided, however, that in the event that the Company (or any person asserting the Company's right) is the prevailing party in such enforcement action (as determined by a court of competent jurisdiction in a final adjudication not subject to appeal), the Executive shall reimburse the Company for all payments made by it pursuant to this Section 4(e)(ii). (iii) Except as otherwise provided in Section 4(e)(ii) above, the Company agrees to pay promptly as incurred, to the full extent permitted by law, all legal fees and expenses which Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, Executive or of the validity or enforceability of, or liability under any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code (as hereinafter defined). (f) Certain Reduction of Payments by the Company. (i) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any reduction required under this Section 4(f) (a "Payment") would be nondeductible by the Company for Federal income tax purposes because of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), then the aggregate present value of all Payments shall be reduced (but not below zero) such that such aggregate present value of Payments equals the Reduced Amount. The "Reduced Amount" shall be an amount expressed in present value which maximizes the aggregate present value of Payments without causing any Payment to be nondeductible by the Company because of Section 280G of the Code. For purposes of this Section 4(f), present value shall be determined in accordance with Section 280G(d)(4) of the Code. (ii) All determinations required to be made under this Section 4(f) shall be made by the Company's regular independent accounting and auditing firm (the 7 8 "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the Date of Termination. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). Any such determination by the Accounting Firm shall be binding upon the Company and the Executive. All fees and expenses of the Accounting Firm shall be borne by the Company. The Executive shall determine which and how much of the Payments shall be eliminated or reduced consistent with the requirements of this Section 4(f), provided that, if the Executive does not make such determination within ten business days of the receipt of the calculations made by the Accounting Firm, the Company shall elect which and how much of the Payments shall be eliminated or reduced consistent with the requirements of this Section 4(f) and shall notify the Executive promptly of such election. Within Five business days thereafter, the Company shall pay to or distribute to or for the benefit of the Executive such Payments as are then due to the Executive and shall promptly pay to or distribute to or for the benefit of the Executive such Payments as become due to the Executive. (iii) As a result of the uncertainty in the application of Section 280G of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Payments will have been made by the Company which should have not been made ("Overpayment") or that additional Payments which will have not been made by the Company could have been made ("Underpayment"), in each case, consistent with the calculations required to be made hereunder. In the event that the Accounting Firm determines that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to the Executive which the Executive shall repay to the Company together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no amount shall be payable by the Executive to the Company (or if paid by the Executive to the Company shall be returned to the Executive) if an to the extent such payment would not reduce the amount which is subject to taxation under Section 4999 of the Code. In the event that the Accounting Firm determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive together with interest at the applicable Federal rate provided for in section 7872(f)(2) of the Code. 5. Expenses; Relocation Expenses. (a) During the Employment Term, the Executive shall be entitled to receive prompt reimbursement for all reasonable expense incurred by the Executive in accordance with the policies, practices and procedures of the Company. (b) In addition, the Company shall reimburse Executive for the costs and expenses relating to the temporary and permanent relocation of Executive and his family to the 8 9 Tampa, Florida area, including, but not limited to, reimbursement of Executive for all reasonable temporary housing expenses for Executive and his family during the period of their temporary relocation. (c) The Company shall provide Executive with the benefits (financial and otherwise) of the Company's relocation policy (a description of which is set forth in Schedule 5(c) to this Agreement) with respect to the sale of Executive's principle residence occupied prior to his relocation to the Tampa, Florida area. 6. Noncompetition. Executive agrees that while in the employ of the Company and, if Executive terminates his employment with the Company prior to the expiration of the Employment Term in breach of his obligations hereunder, for the period beginning on the date Executive terminates his employment and ending on the date the Employment Term was otherwise schedule to expire (the "Subject Period"), Executive will not, directly or indirectly, as principal or agent, or in any other capacity, own, manage, operate, participate in or be employed by or otherwise be interested in, or connected in any manner with, any person, firm, corporation or other enterprise which directly competes in a material respect with the business of the Company or any of its majority-owned subsidiaries as it is conducted while Executive is employed by the Company, except as provided in Schedule 6 hereto. Nothing herein contained shall be construed as denying Executive the right to own securities of any such corporation which is listed on a national securities exchange or quoted in the National Association of Security Dealers, Inc. Automated Quotation System (the "NASDAQ System") to the extent of an aggregate of 5% of the amount of such securities outstanding. 7. Confidentiality. Executive agrees that while in the employ of the Company (otherwise than in the performance of his duties hereunder) and during the period of two years following the scheduled expiration of the Employment Term, he shall not, directly or indirectly, make use of, or divulge to any person, firm, corporation, entity or business organization, and shall use his best efforts to prevent the publication or disclosure of, any Confidential Information (as hereinafter defined) concerning the Company, but this Section 7 shall not prevent Executive from responding to any subpoena, court order or threat of other legal duress, provided Executive notifies the Company thereof with reasonable promptness so that the Company may seek a protective order or other appropriate relief. The term "Confidential Information" shall mean information disclosed to Executive by the Company in connection with his employment relating to the business of the Company, including its accounts and finances, customers and customer lists, and its future plans and proposals, to the extent that the foregoing matters are considered proprietary by the Company; provided, however, that the following shall not be deemed to be Confidential Information: (a) information which is or becomes publicly known other than as a result of a breach of this provision by Executive; (b) information lawfully in the possession of Executive prior to disclosure to him by the Company; 9 10 (c) information disclosed to Executive by any third party; or (d) information developed independently by Executive subsequent to Executive's employment by the Company. 8. Delivery of Materials. Executive agrees that upon the termination of his employment he will deliver to the Company all documents, papers, materials and other property of the Company relating to its affairs which may then be in his possession or under his control. 9. Noninterference. Executive agrees that he will not, while in the employ of the Company and, in the event Executive terminates his employment with the Company prior to the expiration of the Employment Term in breach of his obligations hereunder, during the Subject Period, solicit the employment of any employee of the Company on behalf of any other person, firm, corporation, entity or business organization, or otherwise interfere with the employment relationship between any employee or officer of the Company and the Company. 10. Remedies of the Company. Executive agrees that, in the event of a material breach by Executive of this Agreement, in addition to any other rights that the Company may have pursuant to this Agreement, the Company shall be entitled, if it so elects, to institute and prosecute proceedings at law or in equity to obtain damages with respect to such breach or to enforce the specific performance of this Agreement by Executive or to enjoin Executive from engaging in any activity in violation hereof. Executive agrees that because Executive's services to the Company are of such a unique and extraordinary character, a suit at law may be an inadequate remedy with respect to a breach by Executive of Sections 6, 7, 8 and 9 hereof, and that upon any such breach or threatened breach by him of such Sections the Company shall be entitled, in addition to any other lawful remedies that may be available to it, to injunctive relief. 11. Notices. all notices to be given hereunder shall be deemed duly given when delivered personally in writing or mailed, certified mail, return receipt requested, postage prepaid and addressed as follows: (a) If to be given to the Company: Home Shopping Network, Inc. 2501 118th Avenue North St. Petersburg, Florida 33716 Attention: Legal Department (b) If to be given to Executive: 1416 Brightwaters Boulevard., N.E. St. Petersburg, Florida 33704 10 11 With a separate copy to: Baker & Botts, L.L.P. 885 Third Avenue New York, New York 10020 Attention: Jerome H. Kern, Esq. or to such other address as a party may request by notice given in accordance with this Section 11. 12. Stock Appreciation Rights. (a) The Company hereby grants to Executive Stock Appreciation Rights ("SARs") with respect to 984,876 (the "Total Number of SARs") shares of the Company's common stock, par value $.01 per share (the "Common Stock", which term shall include the Common Stock of the Company as it exists on the date hereof and any class or series into which it may hereafter have been changed). The SARs granted hereunder shall vest over a four-year period as follows: one-fourth of the Total Number of SARs shall vest and become exercisable by Executive on each anniversary of the Effective Date, commencing with February 23, 1994, such that the Total Number of SARs will be fully vested on February 23, 1997, unless such vesting is accelerated pursuant to Section 12(c) hereof. The SARs granted to Executive hereunder are not granted under, and are not subject to the provisions of, any stock incentive, bonus or other plan of the Company. (b) SARs granted hereunder may be exercised, in whole or in part and at any time or from time to time, during the period commencing with the vesting of such SARs and ending on February 23, 2003, unless earlier terminated in accordance with Section 12(c) hereof. SARs may be exercised by delivery to the Company of a written notice specifying the whole number of shares of Common Stock as to which SARs are being exercised; provided, however, that in the event the Company ceases to be a Public Company (as hereinafter defined) Executive may not exercise SARs on more than three separate occasions, and SARs may not be exercised more than once in any fiscal year of the Company during the period in which the Company is not a Public Company. Upon the valid exercise of SARs, Executive shall be entitled to receive from the Company cash or, so long as the Company is a Public Company, shares of the Company's Common Stock (valued at the Fair Market Value (as hereinafter defined) thereof) equal to the excess of (i) the Fair Market Value of each share of Common Stock with respect to which such SARs have been exercised over (ii) $8.25 per share (the "Strike Price"). (c) Upon termination of Executive's employment hereunder, all SARs that have theretofore vested and not been exercised shall remain exercisable for a period of one year after the effective date of the termination of Executive's employment with the Company (the "Termination Date") and shall thereafter terminate to the extent not exercised. In the event of the termination of Executive's employment by the Company other than for Cause, or termination of Executive's employment by Executive for Good Reason, all unvested SARs shall vest 11 12 immediately upon such termination and shall remain exercisable for a period of one year following the Termination Date, and shall thereafter terminate to the extent not exercised. In the event of a Change in Control, whether or not Executive has elected to terminate his employment hereunder pursuant to Section 1 (d) hereof, all vested SARs shall vest immediately prior to such Change in Control, such that Executive may exercise all such SARs no later than the time at which the Change in Control becomes effective, and such SARs shall remain exercisable for a period of one year following termination of Executive's employment (provided that Executive terminates his employment within the twelve-month period referred to in Section 1(d)), and shall thereafter terminate to the extent not exercised. In the event Executive's employment is terminated as a result of his death or disability, all SARS that become vested upon such event or that have theretofore vested shall remain exercisable by Executive or his designated beneficiary or beneficiaries for a period of one year after the Termination Date and notice of such expiration to Executive, his designated beneficiary, if any, or his executor, as the case may be, and shall thereafter terminate to the extent not exercised. Notwithstanding anything contained in this subsection (c), no SAR shall be exercisable after February 23, 2003. (d) the Fair Market Value of a share of Common Stock shall be determined on the date of exercise of an SAR, and the date of exercise of such SAR shall mean the date on which the Company shall have received written notice from Executive of the exercise of such SAR; provided, however, that any such notice given by Executive by personal delivery or facsimile transmission shall be deemed received by the Company at the time of such delivery or transmission. The "Fair Market Value" of a share of Common Stock shall be either (x) if the Company is a Public Company on the date of exercise, the Reference Price (as hereinafter defined) of a share of Common Stock, determined for the trading day preceding such date, or (y) if the Company is not a Public Company on the date of exercise, the Per Share Value (as hereinafter defined) of a share of Common Stock as of the date of exercise. The "Reference Price" of a share of Common Stock shall be (i) the closing price of a share of Common Stock for such trading day on the principal exchange on which the Common Stock is listed, or (ii) if the Common Stock is not listed on any national securities exchange, the closing price (or if none, the average of the high and low bid prices) of a share of Common Stock on such trading day in the over-the-counter market, as reported by the NASDAQ system. The "Per Share Value" of a Share of Common Stock shall be determined as of the applicable Appraisal Date (as hereinafter defined) and shall equal the quotient of the Appraised Value (as hereinafter defined) of the Company divided by the sum of (x) the total number of shares of Common Stock outstanding on such Appraisal Date on a Fully Diluted Basis (as hereinafter defined) and (y) the total number of SARs. The Appraised Value of the Company shall be as agreed to by the Company and Executive prior to the 31st day following the applicable Appraisal Date. In the event that they have not reached agreement by such date notwithstanding their respective good faith efforts to do so (each being required to negotiate in good faith with the other at least for five (5) business days), then the Company and Executive shall each designate a Qualified Appraiser (as hereinafter defined) as promptly as practicable, but in no event more than ten (10) days thereafter, which Qualified Appraisers shall be retained by the Company to determine the Appraised Value of the 12 13 Company as of the applicable Appraisal Date. Each Qualified Appraiser shall submit its written determination of the Appraised Value of the Company to the Company and Executive within 45 days after the date of its retention. If the higher determination of the two Qualified Appraisers is not greater than 110% of the lower determination, the Appraised Value of the Company shall be the average of such two determinations. If the higher determination is greater than 110% of the lower determination, then such two Qualified Appraisers shall jointly select within ten (10) days after the date on which the later of such two determinations was delivered a third Qualified Appraiser to be retained by the Company. Such third Qualified Appraiser shall deliver its written determination of the Appraised Value of the Company as of the applicable Appraisal Date within 30 days after its retention, and the Appraised Value of the Company shall be the average of the two closest determinations or, if there are not two closest determinations, the average of all three determinations. The Company shall pay all fees and expenses relating to the determination of the Appraised Value, including the fees and expenses of all Qualified Appraisers (including the Qualified Appraiser selected by Executive). For purposes of this Section 12(d), the following terms shall have the following meanings. (i) "Appraisal Date": The date of exercise of the SARs. (ii) "Appraised Value": As of the applicable Appraisal Date, the fair market value of the Company on a going concern (whether as a sale of stock or assets) or liquidation basis (whichever method would yield the highest valuation). The fair market value of the Company on a going concern basis shall take into account such considerations (including but not limited to tax considerations which are specific to a sale of assets versus a sale of stock) as would customarily affect the price at which a willing seller would sell and a willing buyer would buy a comparable business as a going concerning in an arm's length transaction. The fair market value of the Company on a liquidation basis shall take into account tax liabilities that would be incurred on liquidation assuming the most tax efficient and practical plan of liquidation. (iii) "Fully Diluted Basis": All shares of Common Stock outstanding on the date of determination, together with shares of Common Stock issuable upon the conversion, exercise or exchange of securities of the Company which are convertible into, or exercisable or exchangeable for, Common Stock, without regard to whether such securities have vested or are then convertible, exercisable or exchangeable. (iv) "Public Company": The Company shall be deemed to be a Public Company for so long as (i) the Common Stock is registered under Section 12 of the Exchange Act and (ii) the Common Stock is regularly traded on a national securities exchange or quoted by the NASDAQ System. (v) "Qualified Appraiser": A nationally recognized investment banking firm with substantial experience as of the applicable Appraisal Date in valuing significant communications properties including cable television programming entities. 13 14 (e) In the event of a stock dividend, recapitalization, reorganization, split-up, spin-off, combination, exchange of shares, warrants or rights offering to purchase Common Stock, or other similar corporate event affecting the Common Stock such that an adjustment is required in order to preserve the benefits of this Section 12, an adjustment shall be made to increase or decrease any or all of (i) the number and kind of shares subject to the SARs granted hereunder and/or (ii) the Strike Price, in such manner as the Board of Directors may deem reasonable and appropriate, provided, however, that the number of shares subject to the SARs granted hereunder shall always be a whole number. (f) The grant of SARs hereunder shall not affect in any way the right or power of the Company to make reclassification, reorganizations or other changes of or to its capital or business structure or to merge, consolidate, liquidate, sell or otherwise dispose of all or any part of its business or assets. (g) The amount of cash payable at any time by the Company upon the valid exercise of SARs granted hereunder shall not in any way be reserved or held in trust by the Company. Executive shall not have any rights against the Company in respect of payment of such amount of cash other than the rights of an unsecured general creditor of the Company. The amount of cash payable upon the valid exercise of SARs hereunder shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and shall not in any manner be liable or subject to the debts, contracts, liabilities, engagements or torts of Executive or of any designated beneficiary or personal representative. (h) The SARs granted to Executive hereunder are not transferable, except to a designated beneficiary or beneficiaries upon Executive's death, and may only be exercised by Executive during his lifetime. Without limiting the generality of the foregoing and except as provided herein, the SARs granted hereunder may not be assigned, transferred, pledged or hypothecated in any way (whether by operation of law or otherwise) and are not subject to execution, attachment or similar process. Except as provided herein, any attempted assignment, transfer, pledge of hypothecation of, or levy, attachment or similar process upon, any SARs shall be null and void and without force or effect. 13. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. (c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially of the business and/or 14 15 assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. 14. Miscellaneous. (a) This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and replaces and supersedes as of the date hereof any and all prior agreements and understandings with respect to Executive's employment by the Company, whether oral or written, between the parties hereto. This Agreement may not be changed nor may any provision hereof be waived except by an instrument in writing duly signed by the party to be charged. This Agreement shall be interpreted, governed and controlled by the law of the State of Florida, without reference to principles of conflict of laws. (b) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (c) The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. (d) The Executive's or the Company's failure to insist upon strict compliance with any provision hereof or any other provision of this agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right 15 16 of the Executive to terminate employment for Good Reason pursuant to Section 1(d) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written.
ATTEST: HOME SHOPPING NETWORK, INC. - ---------------- By: /s/ VIVIAN J. CARR Name: ------------------ Title: Name: Vivian Carr Title: Secretary ---------------------- Gerald F. Hogan
16 17 of the Executive to terminate employment for Good Reason pursuant to Section 1(d) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written.
ATTEST: HOME SHOPPING NETWORK, INC. By: - ------------------- ------------------------ Name: Name: Title: Title: /s/ Gerald F. Hogan --------------------------- Gerald F. Hogan
16 18 Schedule 5(c) In accordance with the Home Shopping Network, Inc. ("HSN") policy and practice in such matters, the following will apply in the sale of Executive's home at 3801 Topside Road, Knoxville, Tennessee: 1. The Guaranteed Sales Price, based on appraised value, shall be $1,100,000.00. HSN will guarantee Executive this price. HSN reserves the right to review and approve/disapprove or modify any offers received by the realtor, Dean Smith Realty of Knoxville, TN. If HSN accepts or directs Executive to accept an offer which is less than the appraised value, HSN will reimburse Executive for the amount of the difference between the Guaranteed Sales Price and offer price, less the monies it has paid towards the amortization of Executive's mortgage. 2. Monthly mortgage payments = $7,465.00. HSN will remit these payments to the first mortgage holder by the fifth day of each month. Upon the sale of Executive's property, HSN will be reimbursed by Executive for any mortgage amortization occurring during the period that HSN made such payments. 3. Maintenance. It is recognized that the property must be properly maintained while for sale. HSN will reimburse Executive for this expense at the rate of $250.00 per month. 4. Insurance which provides appropriate protection against loss from fire, theft, vandalism, weather, etc. will be maintained in Executive's name, and HSN will reimburse Executive for such amounts during the period prior to sale. The annual cost of $2,836.00 will be paid by HSN. Executive will reimburse HSN for any insurance refunds made at the closing. 5. Mr. Edward Vaughn will serve as agent on behalf of HSN to receive and review with Executive all offers presented by Executive's realtors and, if appropriate, to adjust the asking price for the property. 6. The foregoing agreements shall remain in effect during the Employment Term and shall survive termination of the Agreement; provided, however, that in the event Executive terminated his employment other than in accordance with Section 1(d) of the Agreement, Executive shall be required to reimburse HSN for the amounts paid on Executive's behalf pursuant to Sections 2, 3 and 4 of this Schedule 5(c).
17 EX-5 5 OPINION OF BAKER & MCKENZIE 1 EXHIBIT 5 March 28, 1994 Home Shopping Network, Inc. 11831 30th Court North St. Petersburg, Florida 33716 RE: VALIDITY OF COMMON STOCK Ladies and Gentlemen: We are rendering this opinion in connection with the registration, pursuant to a registration statement on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), of 1,104,876 shares of common stock, par value $.01 per share (the "Common Stock"), of Home Shopping Network, Inc., a Delaware corporation (the "Company"), issuable to certain individuals pursuant to two stock option agreements and an employment agreement (the "Agreements"). In connection with the preparation of this opinion, we have examined the minute books and stock records as presented to us by the Company, the Restated Certificate of Incorporation and Restated By-Laws of the Company, the Registration Statement, copies of resolutions duly adopted by the Board of Directors of the Company relating to the authorization and proposed issuance of the Common Stock, and certain documents relating to the Agreements. In addition, we have reviewed such other documents and instruments and have conferred with various officers and directors of the Company and have ascertained or verified to our satisfaction such additional facts with respect to the Company as we have deemed necessary or appropriate for the purposes of this opinion. We have assumed for purposes of this opinion that all applicable laws, rules and regulations in effect at the time of the issuance of the Common Stock pursuant to the Agreements will be the 2 Home Shopping Network, Inc. March 28, 1994 Page 19 same as such laws, rules and regulations in effect as of the date hereof. Based on the foregoing, we are of the opinion that, subject to the effectiveness of the Registration Statement and compliance with applicable state securities laws, the Common Stock, when issued and paid for pursuant to the terms of the Agreements, will constitute duly authorized, validly issued, fully paid and nonassessable shares of Common Stock of the Company. We hereby consent to all references to our firm in the Registration Statement and to the filing of this opinion by the Company as an exhibit to the Registration Statement. This consent is not to be construed as an admission that we are a person whose consent is required to be filed with the Registration Statement under the Securities Act. Very truly yours, /s/ Baker & McKenzie Baker & McKenzie EX-23.1 6 CONSENT OF COUNSEL 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors Home Shopping Network, Inc. We consent to incorporation by reference herein of our reports dated February 15, 1994, relating to (1) the consolidated balance sheets of Home Shopping Network, Inc. and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of operations, stockholders' equity, and cash flows for the year ended December 31, 1993 and the four months ended December 31, 1992 and (2) the related financial statement schedules. The report on the consolidated financial statements appears in the 1993 Annual Report to stockholders of Home Shopping Network, Inc. and has been incorporated by reference in the 1993 annual report on Form 10-K. The report on the related financial statement schedules appears in the 1993 annual report on Form 10-K of Home Shopping Network, Inc. KPMG PEAT MARWICK St. Petersburg, Florida March 29, 1994 EX-23.2 7 CONSENT OF EXPERTS 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, 1994 as to Note H 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, 1993. DELOITTE & TOUCHE Tampa, Florida March 29, 1994 -----END PRIVACY-ENHANCED MESSAGE-----