ServiceMagic 2012 Annual Report Download - page 6

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and Senior Executive, owned 5,789,499 shares of Class B common stock (the "Diller Shares") representing 100% of IAC's outstanding Class B
common stock and approximately 42.5% of the outstanding total voting power of IAC.
Pursuant to an agreement between Mr. Diller and IAC, certain transfer restrictions apply to 1.5 million of the Diller Shares, including a
requirement that, until December 1, 2015 and except for transfers to certain permitted transferees, the Diller Shares must first be converted into
common stock in order to be transferred. In addition, pursuant to an amended and restated governance agreement between IAC and Mr. Diller,
for so long as Mr. Diller serves as IAC's Chairman and Senior Executive, he generally has the right to consent to limited matters in the event that
IAC's ratio of total debt to EBITDA (as defined in the governance agreement) equals or exceeds four to one over a continuous twelve-month
period.
As a result of Mr. Diller's ownership interest, voting power and the contractual rights described above, Mr. Diller is currently in a position to
influence, subject to our organizational documents and Delaware law, the composition of IAC's Board of Directors and the outcome of corporate
actions requiring shareholder approval, such as mergers, business combinations and dispositions of assets, among other corporate transactions.
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