Home Shopping Network 2008 Annual Report Download - page 70

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HSN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
67
Acquisition Restrictions
The Liberty Parties have agreed not to acquire beneficial ownership of any equity securities of HSNi (with
specified exceptions) unless:
• the acquisition was approved by a majority of the Qualified Directors;
• the acquisition is permitted under the provisions described in “Competing Offers” below; or
• after giving effect to the acquisition, Liberty’s ownership percentage of the equity securities of HSNi,
based on voting power, would not exceed the Applicable Percentage.
The “Applicable Percentage” is Liberty’s ownership percentage upon the spin-off of HSNi, based on voting
power (approximately 30%), plus 5%, but in no event more than 35%. Following the spin-off, the Applicable
Percentage for the Spinco will be reduced for specified transfers of equity securities of the Spinco by the Liberty
Parties. During the first two years following the spin-off, acquisitions by the Liberty Parties are further limited to
specified extraordinary transactions and, otherwise, to acquisitions representing no more than one-third of HSNi
Common Stock received by the Liberty Parties in the spin-off.
Standstill Restrictions
Until the second anniversary of the spin-off, unless a majority of the Qualified Directors consent or to the
extent permitted by the provisions described under “Acquisition Restrictions” or “Competing Offers” or in certain
other limited circumstances, no Liberty Party may:
• offer to acquire beneficial ownership of any equity securities of such Spinco;
• initiate or propose any stockholder proposal or seek or propose to influence, advise, change or control
the management, Board of Directors, governing instruments or policies or affairs of HSNi;
• offer, seek or propose, collaborate on or encourage any merger or other extraordinary transaction;
• subject any equity securities of HSNi to a voting agreement;
• make a request to amend any of the provisions described under “Acquisition Restrictions”, “Standstill
Restrictions” or “Competing Offers”;
• make any public disclosure, or take any action which could reasonably be expected to require HSNi to
make any public disclosure, with respect to any of the provisions described under “Standstill
Restrictions”; or
• enter into any discussions, negotiations, arrangements or understandings with any third party with
respect to any of the provisions described under “Standstill Restrictions”.
Transfer Restrictions
Unless a majority of the Qualified Directors consent, the Spinco Agreement prohibits transfers by the
Liberty Parties of any equity securities of HSNi to any person except for certain transfers, including:
• transfers under Rule 144 under the Securities Act (or, if Rule 144 is not applicable, in “broker
transactions”);
• transfers pursuant to a third party tender or exchange offer or in connection with any merger or other
business combination, which merger or business combination has been approved by HSNi;