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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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Filed by a Party other than the Registrant o

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

Liberty Interactive Corporation

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

ý

 

No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
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Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

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LOGO


12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5300

April 19, 2013

Dear Stockholder:

        You are cordially invited to attend our 2013 annual meeting of stockholders to be held at 10:00 a.m., local time, on June 4, 2013, at the corporate offices of Starz, 8900 Liberty Circle, Englewood, CO 80112.

        At the annual meeting, you will be asked to consider and vote on the proposals described in the accompanying notice of annual meeting and proxy statement, as well as on such other business as may properly come before the meeting.

        Your vote is important, regardless of the number of shares you own. Whether or not you plan to attend the annual meeting, please read the enclosed proxy materials and then promptly vote via the Internet or telephone or by completing, signing and returning by mail the enclosed proxy card. Doing so will not prevent you from later revoking your proxy or changing your vote at the meeting.

        Thank you for your continued support and interest in our company.

    Very truly yours,

 

 


GRAPHIC

Gregory B. Maffei
President and Chief Executive Officer

   

        The Notice of Internet Availability of Proxy Materials is first being mailed on or about April 25, 2013, and the proxy materials relating to the annual meeting will first be made available on or about the same date.


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LIBERTY INTERACTIVE CORPORATION
12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5300



NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be Held on June 4, 2013

        NOTICE IS HEREBY GIVEN of the annual meeting of stockholders of Liberty Interactive Corporation (Liberty Interactive) to be held at 10:00 a.m., local time, on June 4, 2013, at the corporate offices of Starz, 8900 Liberty Circle, Englewood, CO 80112, telephone (720) 852-7700, to consider and vote on:

    1.
    A proposal to elect John C. Malone, M. Ian G. Gilchrist and Andrea L. Wong to continue serving as Class III members of our board until the 2016 annual meeting of stockholders or their earlier resignation or removal (the election of directors proposal);

    2.
    A proposal to adopt the Liberty Interactive Corporation 2012 Incentive Plan (the incentive plan proposal); and

    3.
    A proposal to ratify the selection of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2013 (the auditors ratification proposal).

        You may also be asked to consider and vote on such other business as may properly come before the annual meeting.

        Holders of record of our Series A Liberty Interactive common stock, par value $0.01 per share, Series B Liberty Interactive common stock, par value $0.01 per share, Series A Liberty Ventures common stock, par value $0.01 per share, and Series B Liberty Ventures common stock, par value $0.01 per share, in each case, outstanding as of 5:00 p.m., New York City time, on April 10, 2013, the record date for the annual meeting, will be entitled to notice of the annual meeting and to vote at the annual meeting or any adjournment or postponement thereof. These holders will vote together as a single class on each proposal. A list of stockholders entitled to vote at the annual meeting will be available at our offices in Englewood, Colorado for review by our stockholders for any purpose germane to the annual meeting for at least ten days prior to the annual meeting.

        We describe the proposals in more detail in the accompanying proxy statement. We encourage you to read the proxy statement in its entirety before voting.

        Our board of directors has unanimously approved each proposal and recommends that you vote "FOR" the election of each director nominee and "FOR" each of the incentive plan proposal and the auditors ratification proposal.

        Votes may be cast in person at the annual meeting or by proxy prior to the meeting by telephone, via the Internet, or by mail.


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        YOUR VOTE IS IMPORTANT.    Voting promptly, regardless of the number of shares you own, will aid us in reducing the expense of any further proxy solicitation in connection with the annual meeting.

                        By order of the board of directors,

                        GRAPHIC

                        Pamela L. Coe
                        Vice President, Deputy General Counsel and Secretary

Englewood, Colorado
April 19, 2013

WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING, PLEASE VOTE PROMPTLY VIA TELEPHONE OR ELECTRONICALLY VIA THE INTERNET. ALTERNATIVELY, IF YOU RECEIVED A PAPER PROXY CARD, PLEASE COMPLETE, SIGN AND RETURN BY MAIL THE ENCLOSED PAPER PROXY CARD.


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TABLE OF CONTENTS

THE ANNUAL MEETING

  1

Notice and Access of Proxy Materials

  1

Electronic Delivery

  1

Time, Date and Place

  1

Purpose

  2

Quorum

  2

Who May Vote

  2

Votes Required

  2

Votes You Have

  2

Shares Outstanding

  3

Number of Holders

  3

Voting Procedures for Record Holders

  3

Voting Procedures for Shares Held in Street Name

  3

Revoking a Proxy

  4

Solicitation of Proxies

  4

Other Matters to Be Voted on at the Annual Meeting

  4

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  5

Security Ownership of Certain Beneficial Owners

  5

Security Ownership of Management

  6

Changes in Control

  10

PROPOSALS OF OUR BOARD

  11

PROPOSAL 1—THE ELECTION OF DIRECTORS PROPOSAL

  11

Board of Directors

  11

Vote and Recommendation

  15

PROPOSAL 2—THE INCENTIVE PLAN PROPOSAL

  16

Liberty Interactive Corporation 2012 Incentive Plan

  16

U.S. Federal Income Tax Consequences of Awards Granted under the Incentive Plan

  20

New Plan Benefits

  22

Vote and Recommendation

  22

PROPOSAL 3—THE AUDITORS RATIFICATION PROPOSAL

  23

Audit Fees and All Other Fees

  23

Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor

  23

Vote and Recommendation

  24

MANAGEMENT AND GOVERNANCE MATTERS

  25

Executive Officers

  25

Section 16(a) Beneficial Ownership Reporting Compliance

  25

Code of Ethics

  26

Director Independence

  26

Board Composition

  26

Board Leadership Structure

  26

Board Role in Risk Oversight

  26

Committees of the Board of Directors

  27

Board Meetings

  31

Director Attendance at Annual Meetings

  31

Stockholder Communication with Directors

  31

Executive Sessions

  31

EXECUTIVE COMPENSATION

  32

Compensation Discussion and Analysis

  32

Summary Compensation Table

  44

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LIBERTY INTERACTIVE CORPORATION
a Delaware corporation

12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5300

PROXY STATEMENT
For Annual Meeting of Stockholders

        We are furnishing this proxy statement in connection with the board of directors' solicitation of proxies for use at our 2013 Annual Meeting of Stockholders to be held at 10:00 a.m., local time, at the corporate offices of Starz, 8900 Liberty Circle, Englewood CO, 80112 on June 4, 2013, or at any adjournment or postponement of the annual meeting. At the annual meeting, we will ask you to consider and vote on the proposals described in the accompanying Notice of Annual Meeting of Stockholders. The proposals are described in more detail in this proxy statement. We are soliciting proxies from holders of our Series A Liberty Interactive common stock, par value $0.01 per share (LINTA), Series B Liberty Interactive common stock, par value $0.01 per share (LINTB), Series A Liberty Ventures common stock, par value $0.01 per share (LVNTA), and Series B Liberty Ventures common stock, par value $0.01 per share (LVNTB). We refer to LINTA, LINTB, LVNTA and LVNTB together as our common stock.


THE ANNUAL MEETING

Notice and Access of Proxy Materials

        We have elected, in accordance with the Securities and Exchange Commission's "Notice and Access" rule, to deliver a Notice of Internet Availability of Proxy Materials (the Notice) to our stockholders and to post our proxy statement and our annual report to our stockholders (collectively, the proxy materials) electronically. The Notice is first being mailed to our stockholders on or about April 25, 2013. The proxy materials will first be made available to our stockholders on or about the same date.

        The Notice instructs you how to access and review the proxy materials and how to submit your proxy via the Internet or by telephone. The Notice also instructs you how to request and receive a paper copy of the proxy materials, including a proxy card or voting instruction form, at no charge. We will not mail a paper copy of the proxy materials to you unless specifically requested to do so.


Electronic Delivery

        Registered stockholders may elect to receive future notices and proxy materials by e-mail. To sign up for electronic delivery, go to www.computershare.com/investor. Beneficial holders may sign up for electronic delivery when voting by Internet at www.proxyvote.com, by following the prompts. Once you sign up, you will not receive a printed copy of the notices and proxy materials, unless you request them. You may suspend electronic delivery of the notices and proxy materials at any time by contacting our transfer agent, Computershare, at 866-367-6355 (outside the United States 1-781-575-3400). Stockholders who hold shares through a bank, brokerage firm or other nominee may request electronic access by contacting their nominee.


Time, Date and Place

        The annual meeting of the stockholders is to be held at 10:00 a.m., local time, on June 4, 2013, at the corporate offices of Starz, 8900 Liberty Circle, Englewood, CO 80112.

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Purpose

        At the annual meeting, you will be asked to consider and vote on each of the following:

    the election of directors proposal, to elect John C. Malone, M. Ian G. Gilchrist and Andrea L. Wong to continue serving as Class III members of our board until the 2016 annual meeting of stockholders or their earlier resignation or removal;

    the incentive plan proposal, to approve the Liberty Interactive Corporation 2012 Incentive Plan; and

    the auditors ratification proposal, to ratify the selection of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2013.

        You may also be asked to consider and vote on such other business as may properly come before the annual meeting, although we are not aware at this time of any other business that might come before the annual meeting.


Quorum

        In order to carry on the business of the annual meeting, a quorum must be present. This means that at least a majority of the aggregate voting power represented by the shares of our common stock outstanding on the record date for the annual meeting must be represented at the annual meeting either in person or by proxy. For purposes of determining a quorum, your shares will be included as represented at the meeting even if your proxy indicates that you abstain from voting. If a broker, who is a record holder of shares, indicates on a form of proxy that the broker does not have discretionary authority to vote those shares on a particular proposal or proposals, or if those shares are voted in circumstances in which proxy authority is defective or has been withheld, those shares (broker non-votes) nevertheless will be treated as present for purposes of determining the presence of a quorum. See "—Voting Procedures for Shares Held in Street Name—Effect of Broker Non-Votes" below.


Who May Vote

        Holders of shares of our common stock, as recorded in our stock register as of 5:00 p.m., New York City time, on April 10, 2013 (such date and time, the record date for the annual meeting), may vote at the annual meeting or at any adjournment or postponement thereof.


Votes Required

        Each director nominee who receives a plurality of the affirmative votes of the outstanding shares of our common stock that are entitled to vote at the annual meeting and are voted in person or by proxy, voting together as a single class, will be elected to office.

        Approval of each of the incentive plan proposal and the auditors ratification proposal requires the affirmative vote of a majority of the aggregate voting power of the outstanding shares of our common stock that are present in person or by proxy, and entitled to vote at the annual meeting, voting together as a single class.


Votes You Have

        At the annual meeting, holders of shares of LINTA will have one vote per share, holders of shares of LINTB will have ten votes per share, holders of shares of LVNTA will have one vote per share, and holders of LVNTB will have ten votes per share, in each case, that our records show are owned as of the record date.

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Shares Outstanding

        As of the record date, an aggregate of 503,756,260 shares of LINTA, 28,917,353 shares of LINTB, 35,343,829 shares of LVNTA and 1,442,689 shares of LVNTB were issued and outstanding and entitled to vote at the annual meeting.


Number of Holders

        There were, as of the record date, approximately 2,430 and 110 record holders of LINTA and LINTB, respectively, and approximately 1,730 and 80 record holders of LVNTA and LVNTB, respectively (which amounts do not include the number of stockholders whose shares are held of record by banks, brokers or other nominees, but include each such institution as one holder).


Voting Procedures for Record Holders

        Holders of record of our common stock as of the record date may vote in person at the annual meeting. Alternatively, they may submit a proxy by telephone or through the Internet or they may complete, sign and return a paper proxy card. Instructions for voting by telephone or through the Internet and how to obtain a paper proxy card are printed on the Notice. Unless subsequently revoked, shares of our common stock represented by a proxy submitted as described herein and received at or before the annual meeting will be voted in accordance with the instructions on the proxy.

        YOUR VOTE IS IMPORTANT.    It is recommended that you vote by telephone, through the Internet or by mail even if you plan to attend the annual meeting. You may change your vote at the annual meeting.

        If you submit a proxy without indicating any voting instructions as to a proposal enumerated in the Notice of Annual Meeting of Stockholders, the shares represented by the proxy will be voted "FOR" the approval of that proposal.

        If you submit a proxy in which you indicate that you abstain from voting as to a proposal, it will have no effect if the proposal is the election of directors proposal, and it will have the same effect as a vote "AGAINST" the incentive plan proposal and the auditors ratification proposal.

        If you do not submit a proxy or you do not vote in person at the annual meeting, your shares will not be counted as present and entitled to vote for purposes of determining a quorum, and your failure to vote will have no effect on determining whether any of the proposals are approved (assuming a quorum is present).


Voting Procedures for Shares Held in Street Name

        General.    If you hold your shares in the name of a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee to vote your shares or to grant or revoke a proxy. The rules and regulations of the New York Stock Exchange and The Nasdaq Stock Market prohibit brokers, banks and other nominees from voting shares on behalf of their clients with respect to numerous matters, including, in our case, all the proposals described in this proxy statement other than the auditors ratification proposal. Accordingly, to ensure your shares held in street name are voted on these matters, we encourage you to provide promptly specific voting instructions to your broker, bank or other nominee.

        Effect of Broker Non-Votes.    Broker non-votes are counted as shares of our common stock present and entitled to vote for purposes of determining a quorum but will have no effect on any of the proposals. You should follow the directions your broker, bank or other nominee provides to you regarding how to vote your shares of common stock or how to change your vote or revoke your proxy.

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Revoking a Proxy

        If you submitted a proxy prior to the start of the annual meeting, you may change your vote by voting in person at the annual meeting or by delivering a signed proxy revocation or a new signed proxy with a later date to Liberty Interactive Corporation, c/o Computershare Trust Company, N.A., P.O. Box 43102, Providence, Rhode Island 02940. Any signed proxy revocation or new signed proxy must be received before the start of the annual meeting. In addition, you may change your vote through the Internet or by telephone (if you originally voted by the corresponding method) not later than 2:00 a.m., New York City time, on June 4, 2013.

        Your attendance at the annual meeting will not, by itself, revoke a prior vote or proxy from you.

        If your shares are held in an account by a broker, bank or other nominee, you should contact your nominee to change your vote or revoke your proxy.


Solicitation of Proxies

        We are soliciting proxies by means of our proxy statement and our annual report (together, the proxy materials) on behalf of our board of directors. In addition to this mailing, our employees may solicit proxies personally or by telephone. We will pay the cost of soliciting these proxies. We will also reimburse brokers and other nominees for their expenses in sending the Notice and, if requested, paper proxy materials to you and getting your voting instructions.


Other Matters to Be Voted on at the Annual Meeting

        Our board of directors is not currently aware of any business to be acted on at the annual meeting other than that which is described in the Notice of Annual Meeting of Stockholders and this proxy statement. If, however, other matters are properly brought to a vote at the annual meeting, the persons designated as proxies will have discretion to vote or to act on these matters according to their best judgment, unless you indicate otherwise in your proxy. In the event there is a proposal to adjourn or postpone the annual meeting, the persons designated as proxies will have discretion to vote on that proposal.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

        The following table sets forth information concerning shares of our common stock beneficially owned by each person or entity known by us to own more than five percent of the outstanding shares of any series of our common stock. All of such information is based on publicly available filings.

        The security ownership information is given as of February 28, 2013 and, in the case of percentage ownership information, is based upon (1) 510,930,603 LINTA shares, (2) 28,921,353 LINTB shares, (3) 35,339,290 LVNTA shares and (4) 1,443,608 LVNTB shares, in each case, outstanding on that date. The percentage voting power is presented on an aggregate basis for all series of common stock.

Name and Address of Beneficial Owner
  Title of
Class
  Amount and
Nature of
Beneficial
Ownership
  Percent
of Class
(%)
  Voting
Power
(%)
 

John C. Malone

  LINTA     3,359,339 (1)   *     34.5  

c/o Liberty Interactive Corporation

  LINTB     27,689,711 (1)   94.3        

12300 Liberty Boulevard

  LVNTA     666,117 (1)   1.9        

Englewood, CO 80112

  LVNTB     1,384,750 (1)   94.5        

Highfields Capital Management LP

 

LVNTA

   
2,435,404

(2)
 
6.9
   
*
 

John Hancock Tower

                       

200 Claredon Street, 59th Floor

                       

Boston, Massachusetts 02116

                       

FPR Partners, LLC

 

LVNTA

   
1,906,588

(3)
 
5.4
   
*
 

199 Fremont Street, Suite 2500

                       

San Francisco, CA 94105-2261

                       

Jana Partners LLC

 

LVNTA

   
2,072,425

(4)
 
5.9
   
*
 

767 Fifth Avenue, 8th Floor

                       

New York, NY 10153

                       

Dodge & Cox

 

LINTA

   
27,022,608

(5)
 
5.3
   
3.2
 

555 California Street, 40th Floor

                       

San Francisco, CA 94104

                       

ClearBridge Advisors, LLC

 

LINTA

   
27,439,601

(6)
 
5.4
   
3.2
 

399 Park Avenue

                       

New York, NY 10022

                       

BlackRock, Inc. 

 

LINTA

   
28,417,512

(7)
 
5.6
   
3.3
 

40 East 52nd Street

                       

New York, NY 10022

                       

*
Less than one percent

(1)
Information with respect to shares of our common stock beneficially owned by Mr. Malone, our Chairman of the Board, is also set forth in "—Security Ownership of Management."

(2)
Based on Amendment No. 1 to Schedule 13G, dated February 14, 2013, filed by Highfields Capital Management LP (HCM), Highfields GP LLC (Highfields GP), Highfields Associates LLC (Highfields Assoc.), Jonathan S. Jacobson, Highfields Capital I LP (Capital I), Highfields Capital II LP (Capital II), and Highfields Capital III L.P. (Capital III, and together with Capital I and Capital II, the Funds), which states that such shares, over which HCM, Highfields GP,

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    Highfields Assoc., and Mr. Jacobson have sole voting and sole dispositive power, are owned by the Funds (Capital I: 181,074 shares; Capital II: 616,183 shares; Capital III: 1,638,183 shares). HCM serves as the investment manager to each of the Funds. Each of HCM, Highfields GP, Highfields Assoc. and Mr. Jacobson has the power to direct the receipt of dividends from or the proceeds from the sale of such shares owned by the Funds.

(3)
Based on Schedule 13G, dated February 14, 2013, filed by FPR Partners, LLC (FPR Partners), which states that FPR Partners has sole voting and dispositive power over such shares.

(4)
Based on Schedule 13G, dated February 14, 2013, filed by Jana Partners LLC (Jana Partners), which states that Jana Partners has sole voting and dispositive power over such shares.

(5)
Based on Amendment No. 5 to Schedule 13G, dated February 13, 2013, filed by Dodge & Cox, which states that Dodge & Cox has sole voting power over 25,070,158 shares and sole dispositive power over 27,022,608 shares.

(6)
Based on Amendment No. 1 to Schedule 13G, dated February 13, 2009, filed by ClearBridge Advisors, LLC (ClearBridge) which states that ClearBridge has sole voting power over 19,600,089 shares and sole dispositive power over 27,439,601 shares.

(7)
Based on Amendment No. 1 to Schedule 13G, filed March 9, 2011, filed by BlackRock, Inc. (BlackRock) which states that BlackRock has sole voting power and sole dispositive power over 28,417,512 shares.


Security Ownership of Management

        The following table sets forth information with respect to the ownership by each of our directors and named executive officers and by all of our directors and executive officers as a group of shares of (1) each series of our common stock (LINTA, LINTB, LVNTA and LVNTB) and (2) the Common Stock, par value $0.001 per share (TRIP), of our consolidated subsidiary TripAdvisor, Inc. (TripAdvisor). None of our directors or named executive officers own shares of TripAdvisor's Class B Common Stock, par value $0.001 per share (TripAdvisor Class B). The security ownership information with respect to our common stock is given as of February 28, 2013, and, in the case of percentage ownership information, is based upon (1) 510,930,603 LINTA shares, (2) 28,921,353 LINTB shares, (3) 35,339,290 LVNTA shares and (4) 1,443,608 LVNTB shares, in each case, outstanding on that date. The security ownership information with respect to TripAdvisor is given as of February 8, 2013, and, in the case of percentage ownership information, is based on 130,105,917 TRIP shares and 12,799,999 TripAdvisor Class B shares, in each case, outstanding on that date. The percentage voting power is presented in the table below on an aggregate basis for all series of common stock.

        Shares of restricted stock that have been granted pursuant to our incentive plans are included in the outstanding share numbers, for purposes of the table below and throughout this proxy statement. Shares of common stock issuable upon exercise or conversion of options, warrants and convertible securities that were exercisable or convertible on or within 60 days after February 28, 2013, are deemed to be outstanding and to be beneficially owned by the person holding the options, warrants or convertible securities for the purpose of computing the percentage ownership of that person and for the aggregate percentage owned by the directors and named executive officers as a group, but are not treated as outstanding for the purpose of computing the percentage ownership of any other individual person. For purposes of the following presentation, beneficial ownership of shares of LINTB or LVNTB, though convertible on a one-for-one basis into shares of LINTA or LVNTA, respectively, are reported as beneficial ownership of LINTB or LVNTB only, and not as beneficial ownership of LINTA or LVNTA, respectively. So far as is known to us, the persons indicated below have sole voting and dispositive power with respect to the shares indicated as owned by them, except as otherwise stated in the notes to the table.

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        The number of shares indicated as owned by the persons in the table includes interests in shares held by the Liberty Media 401(k) Savings Plan as of February 28, 2013. The shares held by the trustee of the Liberty Media 401(k) Savings Plan for the benefit of these persons are voted as directed by such persons.

Name
  Title of
Series
  Amount and
Nature of
Beneficial
Ownership
  Percent of
Series (%)
  Voting
Power (%)
 
   
  (In thousands)
   
   

John C. Malone

  LINTA     3,359 (1)(2)(3)(4)(5)   *   34.5

Chairman of the Board

  LINTB     27,690 (1)(3)(4)(6)   94.3    

  LVNTA     666 (1)(2)(3)(4)(5)   1.9    

  LVNTB     1,385 (1)(3)(4)(6)   94.5    

  TRIP          

Gregory B. Maffei

 

LINTA

   
6,049

(2)(3)(7)
 
1.2
 
*

President, Chief Executive Officer and

  LINTB            

Director

  LVNTA     332 (2)(3)(7)   *    

  LVNTB            

  TRIP     5 (8)(9)   *   *

Michael A. George

 

LINTA

   
2,734

(3)(7)
 
*
 
*

Director; President, QVC, Inc.

  LINTB            

  LVNTA     151 (3)(7)   *    

  LVNTB            

  TRIP          

M. Ian G. Gilchrist

 

LINTA

   
9

(7)
 
*
 
*

Director

  LINTB            

  LVNTA     ** (7)   *    

  LVNTB            

  TRIP          

Evan D. Malone

 

LINTA

   
33

(3)(7)
 
*
 
*

Director

  LINTB            

  LVNTA     2 (3)(7)   *    

  LVNTB            

  TRIP          

David E. Rapley

 

LINTA

   
46

(3)(7)
 
*
 
*

Director

  LINTB            

  LVNTA     3 (3)(7)   *    

  LVNTB            

  TRIP          

M. LaVoy Robison

 

LINTA

   
33

(3)(7)
 
*
 
*

Director

  LINTB            

  LVNTA     3 (3)(7)   *    

  LVNTB            

  TRIP          

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Name
  Title of
Series
  Amount and
Nature of
Beneficial
Ownership
  Percent of
Series (%)
  Voting
Power (%)
 
   
  (In thousands)
   
   

Larry E. Romrell

 

LINTA

    58 (3)(7)   *   *

Director

  LINTB     **     *    

  LVNTA     3 (3)(7)   *    

  LVNTB     **     *    

  TRIP          

Andrea L. Wong

 

LINTA

   
16

(7)
 
*
 
*

Director

  LINTB            

  LVNTA     ** (7)   *    

  LVNTB            

  TRIP          

Albert E. Rosenthaler

 

LINTA

   
383

(2)(3)(7)
 
*
 
*

Senior Vice President

  LINTB            

  LVNTA     21 (2)(3)(7)   *    

  LVNTB            

  TRIP          

Christopher W. Shean

 

LINTA

   
647

(2)(3)(7)
 
*
 
*

Senior Vice President and Chief

  LINTB            

Financial Officer

  LVNTA     43 (2)(3)(7)   *    

  LVNTB            

  TRIP     3 (8)   *   *

Charles Y. Tanabe

 

LINTA

   
593

(2)(3)(7)
 
*
 
*

Former Executive Vice President and

  LINTB            

General Counsel(10)

  LVNTA     36 (2)(3)(7)   *    

  LVNTB            

  TRIP          

All directors and executive officers as a group (13 persons)(11)

 

LINTA

   
14,050

(1)(2)(3)(4)(5)(7)
 
2.7
 
35.6

  LINTB     27,691 (1)(3)(4)(6)   94.3    

  LVNTA     1,265 (1)(2)(3)(4)(5)(7)   3.6    

  LVNTB     1,385 (1)(3)(4)(6)   94.5    

  TRIP     9 (8)(9)   *   *

*
Less than one percent

**
Less than 1,000 shares

(1)
Includes 376,260 LINTA, 852,358 LINTB shares, 39,290 LVNTA shares and 42,617 LVNTB shares held by Mr. Malone's wife, Mrs. Leslie Malone, as to which shares Mr. Malone has disclaimed beneficial ownership.

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(2)
Includes shares held in the Liberty Media 401(k) Savings Plan as follows:

 
  LINTA   LVNTA  

John C. Malone

    732      

Gregory B. Maffei

    6,174     297  

Charles Y. Tanabe

    9,204     456  

Albert E. Rosenthaler

    12,850     628  

Christopher W. Shean

    8,984     436  
           

Total

    37,944     1,817  
           
(3)
Includes beneficial ownership of shares that may be acquired upon exercise of, or which relate to, stock options and stock appreciation rights exercisable within 60 days after February 28, 2013.

 
  LINTA   LINTB   LVNTA   LVNTB  

John C. Malone

    381,096     432,001     19,053     21,867  

Gregory B. Maffei

    2,227,493         111,576      

Michael A. George

    1,382,413         63,941      

Evan D. Malone

    19,201         959      

David E. Rapley

    27,189         1,357      

M. LaVoy Robison

    27,189         2,137      

Larry E. Romrell

    42,798         2,137      

Charles Y. Tanabe

    304,603         18,306      

Albert E. Rosenthaler

    183,589         9,193      

Christopher W. Shean

    399,209         25,129      
                   

Total

    4,994,780     432,001     253,788     21,867  
                   
(4)
Includes 128,500 shares of LINTA, 458,946 shares of LINTB, 14,074 shares of LVNTA and 22,946 shares of LVNTB held by two trusts which are managed by an independent trustee, of which the beneficiaries are Mr. Malone's adult children and in which Mr. Malone has no pecuniary interest. Mr. Malone retains the right to substitute assets held by the trusts and has disclaimed beneficial ownership of the shares held by the trusts.

(5)
Includes (i) 2,216,867 shares of LINTA and 146,507 shares of LVNTA pledged to Fidelity Brokerage Services, LLC (Fidelity) in connection with a margin loan facility extended by Fidelity to Mr. Malone and (ii) 255,884 shares of LINTA and 447,193 shares of LVNTA pledged to Bank of America (BoA) in connection with a loan facility extended by BoA to Mr. Malone.

(6)
In February 1998, in connection with the settlement of certain legal proceedings relative to the Estate of Bob Magness, the late founder and former Chairman of the Board of Tele-Communications, Inc. (TCI), TCI entered into a call agreement with Mr. Malone and Mr. Malone's wife. In connection with the acquisition by AT&T of TCI, TCI assigned to our predecessor its rights under this call agreement. We have since succeeded to these rights. As a result, we have the right, under certain circumstances, to acquire LINTB and LVNTB shares owned by the Malones. The call agreement also prohibits the Malones from disposing of their LINTB and LVNTB shares, except for certain exempt transfers (such as transfers to related parties or public sales of up to an aggregate of 5% of their shares of LINTB or LVNTB after conversion to shares of LINTA or LVNTA) and except for transfers made in compliance with our call rights.

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(7)
Includes restricted shares, none of which has vested, as follows:

 
  LINTA   LVNTA  

Gregory B. Maffei

    2,591,584     147,387  

Michael A. George

    734,012     49,061  

M. Ian G. Gilchrist

    5,370      

Evan D. Malone

    3,890     195  

David E. Rapley

    9,260     464  

M. LaVoy Robison

    5,370     269  

Larry E. Romrell

    3,890     195  

Andrea L. Wong

    9,260     464  

Richard N. Baer

    90,377     4,552  

Charles Y. Tanabe

    224,310     15,979  

Albert E. Rosenthaler

    130,298     8,522  

Christopher W. Shean

    130,298     8,522  
           

Total

    3,937,919     235,610  
           
(8)
Includes 3,377 restricted shares of TRIP held by each of Messrs. Maffei and Shean, none of which has vested.

(9)
Includes 1,938 shares of TRIP held by the Maffei Foundation, as to which shares Mr. Maffei has disclaimed beneficial ownership.

(10)
Mr. Tanabe ceased serving as our Executive Vice President and General Counsel effective December 31, 2012.

(11)
Includes ownership of our common stock by Richard N. Baer, our Senior Vice President and General Counsel since January 1, 2013.


Changes in Control

        We know of no arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of our company.

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PROPOSALS OF OUR BOARD

        The following proposals will be presented at the annual meeting by our board of directors.


PROPOSAL 1—THE ELECTION OF DIRECTORS PROPOSAL

Board of Directors

        Our board of directors currently consists of nine directors, divided among three classes. Our Class III directors, whose term will expire at the annual meeting, are John C. Malone, M. Ian G. Gilchrist and Andrea L. Wong. These directors are nominated for election to our board to continue to serve as Class III directors, and we have been informed that each of Messrs. Malone and Gilchrist and Ms. Wong are willing to continue to serve as directors of our company. The term of the Class III directors who are elected at the annual meeting will expire at the annual meeting of our stockholders in the year 2016. Our Class I directors, whose term will expire at the annual meeting of our stockholders in the year 2014, are Evan D. Malone, David E. Rapley and Larry E. Romrell. Our Class II directors, whose term will expire at the annual meeting of our stockholders in the year 2015, are Gregory B. Maffei, Michael A. George and M. LaVoy Robison.

        If any nominee should decline election or should become unable to serve as a director of our company for any reason before election at the annual meeting, votes will be cast by the persons appointed as proxies for a substitute nominee, if any, designated by the board of directors.

        The following lists the three nominees for election as directors at the annual meeting and the six directors of our company whose term of office will continue after the annual meeting, and includes as to each person how long such person has been a director of our company, such person's professional background, other public company directorships and other factors considered in the determination that such person possesses the requisite qualifications and skills to serve as a member of our board of directors. All positions referenced in the biographical information below with our company include, where applicable, positions with our predecessors. The number of shares of our common stock beneficially owned by each director, as of February 28, 2013, is set forth in this proxy statement under the caption "Security Ownership of Certain Beneficial Owners and Management—Security Ownership of Management."

    Nominees for Election as Directors

    John C. Malone

    Age:  72

    Chairman of the Board and a director of our company.

    Professional Background:  Mr. Malone has served as Chairman of the Board of our company, including its predecessors, since its inception in 1994 and served as our company's Chief Executive Officer from August 2005 to February 2006. Mr. Malone served as Chairman of the Board of Tele-Communications, Inc. (TCI) from November 1996 until March 1999, when it was acquired by AT&T Corp. (AT&T), and as Chief Executive Officer of TCI from January 1994 to March 1997.

    Other Public Company Directorships:  Mr. Malone has served as Chairman of the Board of Liberty Media Corporation (including its predecessor) since August 2011 and as a director since December 2010. Mr. Malone has served as Chairman of the Board of Liberty Global, Inc. (LGI) since June 2005. Previously, he served as Chairman of the Board of Liberty Media International, Inc. (LMI) from March 2004 to June 2005 and a director of UnitedGlobalCom, Inc., now a subsidiary of LGI, from January 2002 to June 2005. He has served as (i) a director of Discovery Communications, Inc. (Discovery) since September 2008 and served as a director of Discovery's

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      predecessor, Discovery Holding Company (DHC) from May 2005 to September 2008, and as Chairman of the Board from March 2005 to September 2008, (ii) a director of Sirius XM Radio, Inc. (Sirius XM) since April 2009 and (iii) a director of Expedia, Inc. since December 2012, having previously served as a director from August 2005 to November 2012. Previously, he served as (i) a director of Ascent Capital Group, Inc. from January 2010 to September 2012, (ii) a director of Live Nation Entertainment, Inc. (Live Nation) from January 2010 to February 2011, (iii) a director of DIRECTV and its predecessors from February 2008 to June 2010 and (iv) a director of IAC/InterActive Corp from May 2006 to June 2010.

    Board Membership Qualifications:  Mr. Malone, as President of TCI, co-founded Liberty Interactive's former parent company and is considered one of the preeminent figures in the media and telecommunications industry. He is well known for his sophisticated problem solving and risk assessment skills.

    M. Ian G. Gilchrist

    Age:  63

    A director of our company.

    Professional Background:  Mr. Gilchrist has served as a director of our company since July 2009. Mr. Gilchrist held various officer positions including Managing Director at Citigroup/Salomon Brothers from 1995 to 2008, CS First Boston Corporation from 1988 to 1995, and Blyth Eastman Paine Webber from 1982 to 1988 and served as a Vice President of Warburg Paribas Becker Incorporated from 1976 to 1982. Previously, he worked in the venture capital field and as an investment analyst.

    Other Public Company Directorships:  Mr. Gilchrist has served as a director of Liberty Media Corporation (including its predecessor) since September 2011

    Board Membership Qualifications:  Mr. Gilchrist's field of expertise is in the media and telecommunications sector, having been involved with companies in this industry during much of his 32 years as an investment banker. Mr. Gilchrist brings to our board significant financial expertise and a unique perspective on the company and the media and telecommunications sector. He is also an important resource with respect to the financial services firms that our company engages from time to time.

    Andrea L. Wong

    Age:  46

    A director of our company.

    Professional Background:  Ms. Wong has served as a director of our company since April 2010. Ms. Wong has served as President, International Production for Sony Pictures Television and President, International for Sony Pictures Entertainment since September 2011. She previously served as President and CEO of Lifetime Entertainment Services from 2007 to April 2010. Ms. Wong also served as an Executive Vice President with ABC, Inc., a subsidiary of The Walt Disney Company, from 2003 to 2007.

    Other Public Company Directorships:  Ms. Wong has served as a director of Liberty Media Corporation (including its predecessor) since September 2011.

    Board Membership Qualifications:  Ms. Wong brings to our board significant experience in the media and entertainment industry, having an extensive background in media programming across a variety of platforms, as well as executive leadership experience with the management and

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      operation of companies in the entertainment sector. Her experience with programming development and production, brand enhancement and marketing brings a pragmatic and unique perspective to our board. Her professional expertise, combined with her continued involvement in the media and entertainment industry, makes her a valuable member of our board.

    Directors Whose Term Expires in 2014

    Evan D. Malone

    Age:  42

    A director of our company.

    Professional Background:  Dr. Malone has served as a director of our company since August 2008. He has served as President of NextFab Studio, LLC, a high-tech workshop offering technical training, consulting, and product design and prototyping services, since June 2009 and has been an engineering consultant for more than the past five years. Since January 2008, Dr. Malone has served as the owner and manager of a real estate property and management company, 1525 South Street LLC. During 2008, Dr. Malone also served as a post-doctoral research assistant at Cornell University and an engineering consultant with Rich Food Products, a food processing company. Dr. Malone has served as co-owner and director of Drive Passion PC Services, CC, an Internet café, telecommunications and document services company, in South Africa since 2007 and served as an applied physics technician for Fermi National Accelerator Laboratory, part of the national laboratory system of the Office of Science, U.S. Department of Energy, from 1999 until 2001. He also is a partner in Jet Wine Bar, a wine bar, and Rex 1516, a restaurant, both in Philadelphia.

    Other Public Company Directorships:  Dr. Malone has served as a director of Liberty Media Corporation (including its predecessor) since September 2011.

    Board Membership Qualifications:  Dr. Malone, our company's youngest director, brings an applied science and engineering perspective to the board. Dr. Malone's perspectives assist the board in developing business strategies and adapting to technological changes facing the industries in which our company competes. In addition, his entrepreneurial experience assists the board in evaluating strategic opportunities.

    David E. Rapley

    Age:  71

    A director of our company.

    Professional Background:  Mr. Rapley has served as a director of our company since July 2002, having previously served as a director during 1994. Mr. Rapley founded Rapley Engineering Services, Inc. (RESI) and served as its CEO and President from 1985 to 1998. Mr. Rapley also served as Executive Vice President of Engineering of VECO Corp. Alaska (a company that acquired RESI in 1998) from January 1998 to December 2001. Mr. Rapley has served as the President and Chief Executive Officer of Rapley Consulting, Inc. since January 2000.

    Other Public Company Directorships:  Mr. Rapley has served as a director of Liberty Media Corporation (including its predecessor) since September 2011. He has served as a director of LGI since June 2005 and served as a director of its predecessor, LMI, from May 2004 to June 2005.

    Board Membership Qualifications:  Mr. Rapley brings to our board the unique perspective of his lifelong career as an engineer. The industries in which our company competes are heavily

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      dependent on technology, which continues to change and advance. Mr. Rapley's perspectives assist the board in adapting to these changes and developing strategies for our businesses.

    Larry E. Romrell

    Age:  73

    A director of our company.

    Professional Background:  Mr. Romrell has served as a director of our company since December 2011, having previously served as a director from March 1999 to September 2011. Mr. Romrell held numerous executive positions with TCI from 1991 to 1999. Previously, Mr. Romrell held various executive positions with Westmarc Communications, Inc.

    Other Public Company Directorships:  Mr. Romrell has served as a director of Liberty Media Corporation (including its predecessor) since September 2011. He has served as a director of LGI since June 2005 and served as a director of its predecessor, LMI, from May 2004 to June 2005.

    Board Membership Qualifications:  Mr. Romrell brings extensive experience, including venture capital experience, in the telecommunications industry to our board and is an important resource with respect to the management and operations of companies in the media and telecommunications sector.

    Directors Whose Term Expires in 2015

    Gregory B. Maffei

    Age:  52

    Chief Executive Officer, President and a director of our company.

    Professional Background:  Mr. Maffei has served as a director of our company since November 2005, and as the President and Chief Executive Officer of our company since February 2006. He also served as our company's CEO-Elect from November 2005 through February 2006. Mr. Maffei has served as the President and Chief Executive Officer of Liberty Media Corporation (including its predecessor) since May 2007. Prior thereto, Mr. Maffei served as President and Chief Financial Officer of Oracle Corporation, Chairman, President and Chief Executive Officer of 360networks Corporation, and Chief Financial Officer of Microsoft Corporation.

    Other Public Company Directorships:  Mr. Maffei has served as a director of Liberty Media Corporation (including its predecessor) since May 2007 and as the Chairman of the Board and a director of Starz since January 2013. He has served as the Chairman of the Board of Sirius XM since April 2013 and as a director since March 2009. Mr. Maffei has also served as the Chairman of the Board of Live Nation since March 2013 and as a director since February 2011. He has served as the Chairman of the Board of TripAdvisor since February 2013. Mr. Maffei has also served as a director of (i) Electronic Arts, Inc. since June 2003, (ii) Zillow, Inc. since May 2005 and (iii) Barnes & Noble, Inc. since September 2011. Mr. Maffei served as a director of DIRECTV and its predecessors from February 2008 to June 2010.

    Board Membership Qualifications:  Mr. Maffei brings to our board significant financial and operational experience based on his senior policy making positions at our company, Liberty Media Corporation, Oracle Corporation, 360networks Corporation and Microsoft Corporation and his public company board experience. He provides our board with executive leadership

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      perspective on the operations and management of large public companies and risk management principles.

    Michael A. George

    Age:  51

    A director of our company.

    Professional Background:  Mr. George has served as a director of our company since September 2011. He has served as the President of QVC, Inc. (QVC) since November 2005 and as its Chief Executive Officer since April 2006. Mr. George also serves on the board of directors of several non-profit organizations. Mr. George previously held various positions with Dell, Inc. from March 2001 to November 2005, most notably as the chief marketing officer and general manager of Dell, Inc.'s U.S. consumer business.

    Other Public Company Directorships:  Mr. George has served as a director of Brinker International, Inc. since March 2013.

    Board Membership Qualifications:  Mr. George brings to our board significant experience with commerce, retail and technology businesses based on his current executive position with QVC and his prior experience with Dell as well as in his capacity as a senior partner at McKinsey & Co., Inc. His background and executive experience assist the board in evaluating strategic opportunities in the e-commerce and retail industries.

    M. LaVoy Robison

    Age:  77

    Director of our company.

    Professional Background:  Mr. Robison has served as a director of our company since June 2003. Mr. Robison served as the executive director of The Anschutz Foundation, a private foundation, from January 1998 to November 2010 and has served as a board member of this foundation since January 1998. He has also served as a deputy director of the American Museum of Western Art—The Anschutz Collection since February 2011. Prior to joining The Anschutz Foundation, he was a partner for over 25 years with KPMG, having served at one point as that firm's audit partner for our former parent, TCI.

    Other Public Company Directorships.  Mr. Robison has served as a director of Discovery since September 2008 and served as a director of its predecessor, DHC, from May 2005 to September 2008. Mr. Robison served as a director of LMI from June 2004 to June 2005.

    Board Member Qualifications:  Mr. Robison brings to our board extensive experience in public accounting and auditing, having spent more than two decades as a partner with KPMG and its predecessor Peat, Marwick, Mitchell & Co., including serving as an SEC reviewing partner. He provides our board with executive and leadership perspective on financial reporting and accounting oversight of large public companies.


Vote and Recommendation

        A plurality of the affirmative votes of the outstanding shares of our common stock that are entitled to vote at the annual meeting and are voted in person or by proxy, voting together as a single class, is required to elect each of Messrs. Malone and Gilchrist and Ms. Wong as Class III members of our board of directors.

        Our board of directors unanimously recommends a vote "FOR" the election of each nominee to our board of directors.

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PROPOSAL 2—THE INCENTIVE PLAN PROPOSAL

Liberty Interactive Corporation 2012 Incentive Plan

        The following is a description of the material provisions of the Liberty Interactive Corporation 2012 Incentive Plan (the incentive plan). The summary that follows is not intended to be complete, and we refer you to the copy of the incentive plan set forth as Annex A to this proxy statement for a complete statement of its terms and provisions.

        The incentive plan is administered by the compensation committee of our board of directors. The incentive plan is designed to provide additional remuneration to eligible employees and independent contractors for services rendered and to encourage their investment in our capital stock, thereby increasing their proprietary interest in our business. The incentive plan is also intended to (1) attract persons of exceptional ability to become our officers and employees, and (2) induce independent contractors to provide services to us. Employees (including officers and directors) of, and independent contractors providing services to, our company or any of our subsidiaries, will be eligible to participate and may be granted awards under the incentive plan. Awards may be made to any such employee or independent contractor who holds or has held awards under the incentive plan or under any other plan of our company or any of our affiliates. The number of individuals who will receive awards under the incentive plan will vary from year to year and will depend on various factors, such as the number of promotions and our hiring needs during the year, and whether employees or contractors of our subsidiaries are granted awards. Therefore, we cannot predict the number of future award recipients.

        Under the incentive plan, the compensation committee may grant non-qualified stock options, stock appreciation rights (SARs), restricted shares, restricted stock units, cash awards, performance awards or any combination of the foregoing (as used in this description of the incentive plan, collectively, awards). The maximum number of shares of our common stock with respect to which awards may be granted under the incentive plan is 40 million subject to anti-dilution and other adjustment provisions of the incentive plan. With limited exceptions, no person will be granted in any calendar year awards under the incentive plan covering more than 8 million shares of our common stock, subject to anti-dilution and other adjustment provisions of the incentive plan. In addition, no person may receive payment for cash awards during any calendar year aggregating in excess of $10 million.

        Shares of our common stock issuable pursuant to awards made under the incentive plan will be made available from either authorized but unissued shares of our common stock or shares of our common stock that we have issued but reacquired, including shares purchased in the open market. Shares of our common stock that are subject to (i) any award that expires, terminates or is cancelled or annulled for any reason without having been exercised, (ii) any award of any SARs the terms of which provide for settlement in cash, and (iii) any award of restricted shares or restricted stock units that shall be forfeited prior to becoming vested, will once again be available for issuance under the incentive plan. Shares of our common stock that are (i) not issued or delivered as a result of the net settlement of an outstanding option or SAR, (ii) used to pay the purchase price or withholding taxes relating to an outstanding award, or (iii) repurchased in the open market with the proceeds of an option purchase price will not be again made available for issuance under the incentive plan.

        Subject to the provisions of the incentive plan, the compensation committee will be authorized to establish, amend and rescind such rules and regulations as it deems necessary or advisable for the proper administration of the incentive plan and to take such other action in connection with or in relation to the incentive plan as it deems necessary or advisable.

        Stock Options.    Non-qualified stock options awarded under the incentive plan will entitle the holder to purchase a specified number of shares of a series of our common stock at a specified exercise price subject to the terms and conditions of the applicable option grant. The exercise price of an option

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awarded under the incentive plan may be no less than the fair market value of the shares of the applicable series of our common stock as of the day the option is granted. The compensation committee will determine, and each individual award agreement will provide, (1) the series and number of shares of our common stock subject to the option, (2) the per share exercise price, (3) whether that price is payable in cash, by check, by promissory note, in whole shares of any series of our common stock, by the withholding of shares of our common stock issuable upon exercise of the option, by cashless exercise, or any combination of the foregoing, (4) other terms and conditions of exercise, (5) restrictions on transfer of the option and (6) other provisions not inconsistent with the incentive plan. Options granted under the incentive plan will generally be non-transferable, except as permitted by will or the laws of descent and distribution or pursuant to a qualified domestic relations order.

        Stock Appreciation Rights.    A SAR awarded under the incentive plan entitles the recipient to receive a payment in stock or cash equal to the excess of the fair market value (on the day the SAR is exercised) of a share of the applicable series of our common stock with respect to which the SAR was granted over the base price specified in the grant. A SAR may be granted to an option holder with respect to all or a portion of the shares of our common stock subject to a related stock option (a tandem SAR) or granted separately to an eligible employee or independent contractor (a free standing SAR). Tandem SARs are exercisable only at the time and to the extent that the related stock option is exercisable. Upon the exercise or termination of the related stock option, the related tandem SAR will be automatically cancelled to the extent of the number of shares of our common stock with respect to which the related stock option was so exercised or terminated. The base price of a tandem SAR is equal to the exercise price of the related stock option. Free standing SARs are exercisable at the time and upon the terms and conditions provided in the relevant agreement. The base price of a free standing SAR may be no less than the fair market value of a share of the applicable series of our common stock as of the day the SAR is granted. SARs granted under the incentive plan will generally be non-transferable, except as permitted by will or the laws of descent and distribution or pursuant to a qualified domestic relations order.

        Restricted Shares and Restricted Stock Units.    Restricted shares are shares of our common stock that become vested and may be transferred upon completion of the restriction period. The compensation committee will determine, and each individual award agreement will provide, (1) the price, if any, to be paid by the recipient of the restricted shares, (2) whether dividends or distributions paid with respect to restricted shares will be retained by us during the restriction period (retained distributions), (3) whether the holder of the restricted shares may be paid a cash amount any time after the shares become vested, (4) the vesting date or vesting dates (or basis of determining the same) for the award and (5) other terms and conditions of the award. The holder of an award of restricted shares, as the registered owner of such shares, may vote the shares.

        A restricted stock unit is a unit evidencing the right to receive, in specified circumstances, one share of the specified series of our common stock, or its cash equivalent, subject to a restriction period or forfeiture conditions. The compensation committee will be authorized to award restricted stock units based upon the fair market value of shares of any series of our common stock under the incentive plan. The compensation committee will determine, and each individual award agreement will provide, the terms, conditions, restrictions, vesting requirements and payment rules for awards of restricted stock units, including whether the holder will be entitled to dividend equivalent payments with respect to the restricted stock units. Restricted stock units will be issued at the beginning of the restriction period and holders will not be entitled to shares of our common stock covered by restricted stock unit awards until such shares are issued to the holder at the end of the restriction period. Awards of restricted stock units or the common stock covered thereunder may not be transferred, assigned or encumbered prior to the date on which such shares are issued or as provided in the relevant award agreement.

        Upon the applicable vesting date, all or the applicable portion of restricted shares or restricted stock units will vest, any retained distributions or unpaid dividend equivalents with respect to the

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restricted shares or restricted stock units will vest to the extent that the awards related thereto have vested, and any cash amount to be received by the holder with respect to the restricted shares or restricted stock units will become payable, all in accordance with the terms of the individual award agreement. The compensation committee may permit a holder to elect to defer delivery of any restricted shares or restricted stock units that become vested and any related cash payments, retained distributions or dividend equivalents, provided that such deferral elections are made in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the Code).

        Cash Awards.    The compensation committee will also be authorized to provide for the grant of cash awards under the incentive plan. A cash award is a bonus paid in cash that may be based upon the attainment of one or more performance goals over a performance period established by the compensation committee. The terms, conditions and limitations applicable to any cash awards will be determined by the compensation committee.

        Performance Awards.    At the discretion of the compensation committee, any of the above-described awards may be designated as a performance award. Cash awards shall be designated as performance awards. Performance awards are contingent upon performance measures applicable to a particular period, as established by the compensation committee and set forth in individual agreements, based upon any one or more of the following business criteria:

    increased revenue;

    net income measures (including income after capital costs and income before or after taxes);

    stock price measures (including growth measures and total stockholder return);

    price per share of our common stock;

    market share;

    earnings per share (actual or targeted growth);

    earnings before interest, taxes, depreciation and amortization (EBITDA);

    operating income before depreciation and amortization (OIBDA);

    economic value added (or an equivalent metric);

    market value added;

    debt to equity ratio;

    cash flow measures (including cash flow return on capital, cash flow return on tangible capital, net cash flow and net cash flow before financing activities);

    return measures (including return on equity, return on average assets, return on capital, risk-adjusted return on capital, return on investors' capital and return on average equity);

    operating measures (including operating income, funds from operations, cash from operations, after-tax operating income, sales volumes, production volumes and production efficiency);

    expense measures (including overhead costs and general and administrative expense);

    margins;

    stockholder value;

    total stockholder return;

    proceeds from dispositions;

    total market value; and

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    corporate values measures (including ethics compliance, environmental and safety).

        Performance measures may apply to the award recipient, to one or more business units, divisions or subsidiaries of our company or an applicable sector of our company, or to our company as a whole. Goals may also be based on performance relative to a peer group of companies. If the compensation committee intends for the performance award to be granted and administered in a manner that preserves the deductibility of the compensation resulting from such award in accordance with Section 162(m) of the Code, the applicable performance goals must be established (1) no later than 90 days after the commencement of the period of service to which the performance goals relate and (2) prior to the completion of 25% of such period of service. The compensation committee will have no discretion to modify or waive such performance goals to increase the amount of compensation payable that would otherwise be due upon attainment of the goal, unless the applicable award is not intended to qualify as qualified performance-based compensation under Section 162(m) of the Code and the relevant agreement provides for such discretion. Section 162(m) of the Code generally disallows deductions for compensation in excess of $1 million for some executive officers unless the awards meet the requirements for being performance-based.

        Awards Generally.    Awards under the incentive plan may be granted either individually, in tandem or in combination with each other. Where applicable, the securities underlying, or relating to, awards granted under the incentive plan may be shares of LINTA, LINTB, LVNTA and LVNTB as provided in the relevant grant, the closing prices of which shares were $20.34, $20.17, $74.97 and $76.03, respectively, as of April 17, 2013. Under certain conditions, including the occurrence of certain approved transactions, a board change or a control purchase (all as defined in the incentive plan), options and SARs will become immediately exercisable, and the restrictions on restricted shares and restricted stock units will lapse, unless individual agreements state otherwise. At the time an award is granted, the compensation committee will determine, and the relevant agreement will provide for, any vesting or early termination, upon a holder's termination of employment with our company, of any unvested options, SARs, restricted stock units or restricted shares and the period during which any vested options and SARs must be exercised. Unless otherwise provided in the relevant agreement, (1) no option or SAR may be exercised after its scheduled expiration date, (2) if the holder's service terminates by reason of death or disability (as defined in the incentive plan), his or her options or SARs shall remain exercisable for a period of at least one year following such termination (but not later than the scheduled expiration date) and (3) any termination of the holder's service for "cause" (as defined in the incentive plan) will result in the immediate termination of all options and SARs and the forfeiture of all rights to any restricted shares, restricted stock units, retained distributions, unpaid dividend equivalents and related cash amounts held by such terminated holder. If a holder's service terminates due to death or disability, options and SARs will become immediately exercisable, and the restrictions on restricted shares and restricted stock units will lapse and become fully vested, unless individual agreements state otherwise.

        Adjustments.    The number and kind of shares of our common stock that may be awarded or otherwise made subject to awards under the incentive plan, the number and kind of shares of our common stock covered by outstanding awards and the purchase or exercise price and any relevant appreciation base with respect to any of the foregoing will be subject to appropriate adjustment as the compensation committee deems equitable, in its sole discretion, in the event (1) we subdivide the outstanding shares of any series of our common stock into a greater number of shares of such series of common stock, (2) we combine the outstanding shares of any series of our common stock into a smaller number of shares of such series of common stock or (3) there is a stock dividend, extraordinary cash dividend, reclassification, recapitalization, reorganization, stock redemption, split-up, spin-off, combination, exchange of shares, warrants or rights offering to purchase any series of our common stock, or any other similar corporate event (including mergers or consolidations, other than approved transactions (as defined in the incentive plan) for which other provisions are made pursuant to the

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incentive plan). In addition, in the event of a merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the compensation committee has the discretion to (i) provide, prior to the transaction, for the acceleration of vesting and exercisability, or lapse of restrictions, with respect to the awards, or in the case of a cash merger, termination of unexercised awards, or (ii) cancel such awards and deliver cash to holders based on the fair market value of such awards as determined by the compensation committee, in a manner that is in compliance with the requirements of Section 409A of the Code.

        Amendment and Termination.    The incentive plan will terminate on the fifth anniversary of the plan's effective date (which was November 26, 2012) unless earlier terminated by the compensation committee. The compensation committee may suspend, discontinue, modify or amend the incentive plan at any time prior to its termination, except that outstanding awards may not be amended to reduce the purchase or base price of outstanding options or SARs. However, before an amendment may be made that would adversely affect a participant who has already been granted an award, the participant's consent must be obtained, unless the change is necessary to comply with Section 409A of the Code.


U.S. Federal Income Tax Consequences of Awards Granted under the Incentive Plan

Consequences to Participants

        The following is a summary of the U.S. federal income tax consequences that generally will arise with respect to awards granted under the incentive plan and with respect to the sale of any shares of our common stock acquired under the incentive plan. This general summary does not purport to be complete, does not describe any state, local or non-U.S. tax consequences, and does not address issues related to the tax circumstances of any particular recipient of an award under the incentive plan.

        Non-Qualified Stock Options; SARs.    Holders will not realize taxable income upon the grant of a non-qualified stock option or a SAR. Upon the exercise of a non-qualified stock option or a SAR, the holder will recognize ordinary income (subject to withholding, if applicable) in an amount equal to the excess of (1) the fair market value on the date of exercise of the shares received over (2) the exercise price or base price (if any) he or she paid for the shares. The holder will generally have a tax basis in any shares of our common stock received pursuant to the exercise of a SAR, or pursuant to the cash exercise of a non-qualified stock option, that equals the fair market value of such shares on the date of exercise. The disposition of the shares of our common stock acquired upon exercise of a non-qualified stock option will ordinarily result in capital gain or loss. We are entitled to a deduction in an amount equal to the income recognized by the holder upon the exercise of a non-qualified stock option or SAR.

        Under current rulings, if a holder transfers previously held ordinary shares in satisfaction of part or all of the exercise price of a non-qualified stock option, the holder will recognize income with respect to the shares received, but no additional gain will be recognized as a result of the transfer of such previously held shares in satisfaction of the non-qualified stock option exercise price. Moreover, that number of shares received upon exercise that equals the number of previously held shares surrendered in satisfaction of the non-qualified stock option will have a tax basis that equals, and a holding period that includes, the tax basis and holding period of the previously held shares surrendered in satisfaction of the non-qualified stock option exercise price. Any additional shares received upon exercise will have a tax basis that equals the amount of cash (if any) paid by the holder, plus, the amount of ordinary income recognized by the holder with respect to the shares received.

        Cash Awards; Restricted Stock Units; Restricted Shares.    A holder will recognize ordinary compensation income upon receipt of cash pursuant to a cash award or, if earlier, at the time such cash is otherwise made available for the holder to draw upon it, and we will have a corresponding deduction

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for federal income tax purposes, subject to certain limits on deductibility discussed under "Executive Compensation—Compensation Discussion & Analysis—Deductibility of Executive Compensation." A holder will not have taxable income upon the grant of a restricted stock unit but rather will generally recognize ordinary compensation income at the time the award is settled in an amount equal to the fair market value of the shares received, at which time we will have a corresponding deduction for federal income tax purposes, subject to certain limits on deductibility discussed under "Executive Compensation—Compensation Discussion & Analysis—Deductibility of Executive Compensation."

        Generally, a holder will not recognize taxable income upon the grant of restricted shares, and we will not be entitled to any federal income tax deduction upon the grant of such award. The value of the restricted shares will generally be taxable to the holder as compensation income in the year or years in which the restrictions on the shares of common stock lapse. Such value will equal the fair market value of the shares on the date or dates the restrictions terminate. A holder, however, may elect pursuant to Section 83(b) of the Code to treat the fair market value of the shares subject to the restricted share award on the date of such grant as compensation income in the year of the grant of the restricted share award. The holder must make such an election pursuant to Section 83(b) of the Code within 30 days after the date of grant. If such an election is made and the holder later forfeits the restricted shares to us, the holder will not be allowed to deduct, at a later date, the amount such holder had earlier included as compensation income. In any case, we will receive a deduction for federal income tax purposes corresponding in amount to the amount of compensation included in the holder's income in the year in which that amount is so included, subject to certain limits on deductibility discussed under "Executive Compensation—Compensation Discussion & Analysis—Deductibility of Executive Compensation."

        A holder who is an employee will be subject to withholding for federal, and generally for state and local, income taxes at the time the holder recognizes income under the rules described above with respect to the cash or the shares of our common stock received pursuant to awards. Dividend equivalents that are received by a holder prior to the time that the restricted shares are taxed to the holder under the rules described in the preceding paragraph are taxed as additional compensation, not as dividend income. The tax basis of a holder in the shares of our common stock received will equal the amount recognized by the holder as compensation income under the rules described in the preceding paragraph, and the holder's holding period in such shares will commence on the date income is so recognized.

        Certain Tax Code Limitations on Deductibility.    In order for us to deduct the amounts described above, such amounts must constitute reasonable compensation for services rendered or to be rendered and must be ordinary and necessary business expenses. The ability to obtain a deduction for awards under the incentive plan could also be limited by Section 280G of the Code, which provides that certain excess parachute payments made in connection with a change in control of an employer are not deductible. The ability to obtain a deduction for amounts paid under the incentive plan could also be affected by Section 162(m) of the Code, which limits the deductibility, for U.S. federal income tax purposes, of compensation paid to certain employees to $1 million during any taxable year. However, certain exceptions apply to this limitation in the case of qualified performance-based compensation. In certain cases, we may determine it is in our interests to not satisfy the requirements for the qualified performance-based exception.

        Code Section 409A.    Section 409A of the Code generally provides that any deferred compensation arrangement must satisfy specific requirements, both in operation and in form, regarding (1) the timing of payment, (2) the advance election of deferrals, and (3) restrictions on the acceleration of payment. Failure to comply with Section 409A of the Code may result in the early taxation (plus interest) to the participant of deferred compensation and the imposition of a 20% penalty on the participant on such deferred amounts included in the participant's income. We intend to structure awards under the

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incentive plan in a manner that is designed to be exempt from or comply with Section 409A of the Code.


New Plan Benefits

        Except as otherwise described below, due to the nature of the incentive plan and the discretionary authority afforded the compensation committee in connection with the administration thereof, we cannot determine or predict the value, number or type of awards to be granted pursuant to the incentive plan.

        Prior to the date of this proxy statement, we have granted awards under the incentive plan with respect to 3,951,798 shares of our common stock to certain of our employees, which results in 36,048,202 shares of our common stock being available for future grants.


Vote and Recommendation

        The affirmative vote of a majority of the aggregate voting power of the shares of our common stock, outstanding on the record date, that are present in person or by proxy, voting together as a single class, is required to approve the incentive plan proposal.

        Our board of directors unanimously recommends a vote "FOR" the approval of the Liberty Interactive Corporation 2012 Incentive Plan.

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PROPOSAL 3—THE AUDITORS RATIFICATION PROPOSAL

        We are asking our stockholders to ratify the selection of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2013.

        Even if the selection of KPMG LLP is ratified, the audit committee of our board of directors in its discretion may direct the appointment of a different independent accounting firm at any time during the year if our audit committee determines that such a change would be advisable. In the event our stockholders fail to ratify the selection of KPMG LLP, our audit committee will consider it as a direction to select other auditors for the year ending December 31, 2013.

        A representative of KPMG LLP is expected to be present at the annual meeting, will have the opportunity to make a statement if he or she so desires and is expected to be available to respond to appropriate questions.


Audit Fees and All Other Fees

        The following table presents fees for professional audit services rendered by KPMG LLP for the audit of our consolidated financial statements for 2012 and 2011 and fees billed for other services rendered by KPMG LLP:

 
  2012   2011  

Audit fees

  $ 3,713,000     3,289,000  

Audit related fees(1)

    690,000     97,000  
           

Audit and audit related fees

    4,403,000     3,386,000  

Tax fees(2)

    1,317,000     652,000  
           

Total fees

  $ 5,720,000     4,038,000  
           

(1)
Audit related fees consist of professional consultations with respect to accounting issues affecting our financial statements, reviews of registration statements and issuance of consents, due diligence related to potential business combinations and audits of financial statements of certain employee benefits plans.

(2)
Tax fees consist of tax compliance and consultations regarding the tax implications of certain transactions.

        Our audit committee has considered whether the provision of services by KPMG LLP to our company other than auditing is compatible with KPMG LLP maintaining its independence and believes that the provision of such other services is compatible with KPMG LLP maintaining its independence.


Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor

        Our audit committee has adopted a policy regarding the pre-approval of all audit and permissible non-audit services provided by our independent auditor. Pursuant to this policy, our audit committee has approved the engagement of our independent auditor to provide the following services (all of which are collectively referred to as pre-approved services):

    audit services as specified in the policy, including (i) financial audits of our company and our subsidiaries, (ii) services associated with registration statements, periodic reports and other documents filed or issued in connection with securities offerings (including comfort letters and consents), (iii) attestations of management reports on our internal controls and (iv) consultations with management as to accounting or disclosure treatment of transactions;

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    audit related services as specified in the policy, including (i) due diligence services, (ii) financial statement audits of employee benefit plans, (iii) consultations with management as to the accounting or disclosure treatment of transactions, (iv) attest services not required by statute or regulation, (v) certain audits incremental to the audit of our consolidated financial statements, (vi) closing balance sheet audits related to dispositions, and (vii) general assistance with implementation of the requirements of certain SEC rules or listing standards; and

    tax services as specified in the policy, including federal, state, local and international tax planning, compliance and review services, and tax due diligence and advice regarding mergers and acquisitions.

        Notwithstanding the foregoing general pre-approval, if an individual project involving the provision of pre-approved services is expected to result in fees in excess of $100,000, or if individual projects under $100,000 are expected to total $500,000 during the period between the regularly scheduled meetings of the audit committee, then such projects will require the specific pre-approval of our audit committee. Our audit committee has delegated the authority for the foregoing approvals to the chairman of the audit committee, subject to his subsequent disclosure to the entire audit committee of the granting of any such approval. M. LaVoy Robison currently serves as the chairman of our audit committee. In addition, the independent auditor is required to provide a report at each regularly scheduled audit committee meeting on all pre-approved services incurred during the preceding quarter. Any engagement of our independent auditors for services other than the pre-approved services requires the specific approval of our audit committee.

        Our pre-approval policy prohibits the engagement of our independent auditor to provide any services that are subject to the prohibition imposed by Section 201 of the Sarbanes-Oxley Act.

        All services provided by our independent auditor during 2012 were approved in accordance with the terms of the policy.


Vote and Recommendation

        The affirmative vote of a majority of the aggregate voting power of the outstanding shares of our common stock that are present in person or by proxy, and entitled to vote at the annual meeting, voting together as a single class, is required to approve the auditors ratification proposal.

        Our board of directors unanimously recommends a vote "FOR" the auditors ratification proposal.

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MANAGEMENT AND GOVERNANCE MATTERS

Executive Officers

        The following lists the executive officers of our company (other than Gregory B. Maffei, our President and Chief Executive Officer, and John C. Malone, our Chairman of the Board, who also serve as directors of our company and who are listed under "Proposals of Our BoardProposal 1The Election of Directors Proposal"), their ages and a description of their business experience, including positions held with our company. All positions referenced in the table below with our company include, where applicable, positions with our predecessors.

Name
  Positions
Richard N. Baer
Age: 56
  Senior Vice President and General Counsel of our company since January 2013. Executive Vice President and Chief Legal Officer of UnitedHealth Group Incorporated from May 2011 to December 2012. Executive Vice President and General Counsel of Qwest Communications International Inc. from December 2002 to April 2011 and Chief Administrative Officer from August 2008 to April 2011.

Albert E. Rosenthaler
Age: 53

 

A Senior Vice President of our company since April 2002.

Christopher W. Shean
Age: 47

 

A Senior Vice President of our company since January 2002 and the Chief Financial Officer since November 2011. The Controller of our company from October 2000 to October 2011 and a Vice President of our company from October 2000 to January 2002.

        Our executive officers will serve in such capacities until the next annual meeting of our board of directors, or until their respective successors have been duly elected and have been qualified, or until their earlier death, resignation, disqualification or removal from office. There is no family relationship between any of our executive officers or directors, by blood, marriage or adoption, other than Evan D. Malone who is the son of John C. Malone.

        During the past ten years, none of the above persons has had any involvement in such legal proceedings as would be material to an evaluation of his ability or integrity.


Section 16(a) Beneficial Ownership Reporting Compliance

        Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than ten-percent stockholders are required by SEC regulation to furnish us with copies of all Section 16 forms they file.

        Based solely on a review of the copies of the Forms 3, 4 and 5 and amendments to those forms furnished to us during our most recent fiscal year, or written representations that no Forms 5 were required, we believe that, during the year ended December 31, 2012, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten-percent beneficial owners were met, except that one Form 4 reporting four transactions was filed late by Michael A. George, one Form 4 reporting one transaction was filed late by Gregory B. Maffei, one Form 4 reporting two transactions was filed late by Evan D. Malone, one Form 4 reporting six transactions was filed late by John C. Malone, one Form 4 reporting three transactions was filed late by M. LaVoy Robison, and one Form 4 reporting one transaction was filed late by Larry E. Romrell.

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Code of Ethics

        We have adopted a code of ethics that applies to all of our employees, directors and officers, which constitutes our "code of ethics" within the meaning of Section 406 of the Sarbanes-Oxley Act. Our code of ethics is available on our website at www.libertyinteractive.com.


Director Independence

        It is our policy that a majority of the members of our board of directors be independent of our management. For a director to be deemed independent, our board of directors must affirmatively determine that the director has no direct or indirect material relationship with us. To assist our board of directors in determining which of our directors qualify as independent for purposes of Nasdaq rules as well as applicable rules and regulations adopted by the SEC, the nominating and corporate governance committee of our board of directors follows the Corporate Governance Rules of The Nasdaq Stock Market on the criteria for director independence.

        Our board of directors has determined that each of M. Ian G. Gilchrist, David E. Rapley, M. LaVoy Robison, Larry E. Romrell and Andrea L. Wong qualifies as an independent director of our company.


Board Composition

        As described above under "Proposals of Our BoardProposal 1The Election of Directors Proposal", our board is comprised of directors with a broad range of backgrounds and skill sets, including in media and telecommunications, science and technology, venture capital, investment banking, auditing and financial engineering. Our board is also chronologically diverse with our members' ages spanning four decades. For more information on our policies with respect to board candidates, see "Committees of the Board of DirectorsNominating and Corporate Governance Committee" below.


Board Leadership Structure

        Our board has separated the positions of Chairman of the Board and Chief Executive Officer (principal executive officer). John C. Malone, one of our largest stockholders, holds the position of Chairman, leads our board and board meetings and provides strategic guidance to our Chief Executive Officer. Gregory B. Maffei, our President, holds the position of Chief Executive Officer, leads our management team and is responsible for driving the performance of our company. We believe this division of responsibility effectively assists our board in fulfilling its duties.


Board Role in Risk Oversight

        The board as a whole has responsibility for risk oversight, with reviews of certain areas being conducted by the relevant board committees. Our audit committee oversees management of financial risks and risks relating to potential conflicts of interest. Our compensation committee is responsible for overseeing the management of risks relating to our compensation arrangements with senior officers, and our nominating and corporate governance committee manages risks associated with the independence of the board. These committees then provide reports periodically to the full board. The oversight responsibility of the board and its committees is enabled by management reporting processes that are designed to provide visibility to the board about the identification, assessment, and management of critical risks. These areas of focus include strategic, operational, financial and reporting, succession and compensation, legal and compliance, and other risks. Our management reporting processes include regular reports from our Chief Executive Officer, which are prepared with input from our senior management team, and includes input from our Internal Audit group.

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Committees of the Board of Directors

    Executive Committee

        Our board of directors has established an executive committee, whose members are John C. Malone and Gregory B. Maffei. Except as specifically prohibited by the General Corporation Law of the State of Delaware, the executive committee may exercise all the powers and authority of our board of directors in the management of our business and affairs, including the power and authority to authorize the issuance of shares of our capital stock.

    Compensation Committee

        Our board of directors has established a compensation committee, whose chairman is M. Ian G. Gilchrist and whose other members are David E. Rapley and Andrea L. Wong. See "—Director Independence" above.

        The compensation committee reviews and approves corporate goals and objectives relevant to the compensation of our Chief Executive Officer and our other executive officers. The compensation committee also reviews and approves the compensation of all officers of our company at the level of senior vice president or above, including our Chief Executive Officer. For a description of our processes and policies for consideration and determination of executive compensation, including the role of our Chief Executive Officer and outside consultants in determining or recommending amounts and/or forms of compensation, see "Executive Compensation—Compensation Discussion and Analysis."

        Our board of directors has adopted a written charter for the compensation committee, which is available on our website at www.libertyinteractive.com.

    Compensation Committee Report

        The compensation committee has reviewed and discussed with our management the "Compensation Discussion and Analysis" included under "Executive Compensation" below. Based on such review and discussions, the compensation committee recommended to our board of directors that the "Compensation Discussion and Analysis" be included in this proxy statement.

Submitted by the Members of the Compensation Committee
M. Ian G. Gilchrist
David E. Rapley
Andrea L. Wong

    Compensation Committee Interlocks and Insider Participation

        No member of our compensation committee is or has been an officer or employee of our company, or has engaged in any related party transaction in which our company was a participant.

    Nominating and Corporate Governance Committee

        Our board of directors has established a nominating and corporate governance committee, whose chairman is David E. Rapley and whose other members are M. Ian G. Gilchrist, Larry E. Romrell and Andrea L. Wong. See "—Director Independence" above.

        The nominating and corporate governance committee identifies individuals qualified to become board members consistent with criteria established or approved by our board of directors from time to time, identifies director nominees for upcoming annual meetings, develops corporate governance guidelines applicable to our company and oversees the evaluation of our board and management.

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        The nominating and corporate governance committee will consider candidates for director recommended by any stockholder provided that such nominations are properly submitted. Eligible stockholders wishing to recommend a candidate for nomination as a director should send the recommendation in writing to the Corporate Secretary, Liberty Interactive Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112. Stockholder recommendations must be made in accordance with our bylaws, as discussed under "Stockholder Proposals" below, and contain the following information:

    the name and address of the proposing stockholder and the beneficial owner, if any, on whose behalf the nomination is being made, and documentation indicating the number of shares of our common stock owned beneficially and of record by such person and the holder or holders of record of those shares, together with a statement that the proposing stockholder is recommending a candidate for nomination as a director;

    the candidate's name, age, business and residence addresses, principal occupation or employment, business experience, educational background and any other information relevant in light of the factors considered by the nominating and corporate governance committee in making a determination of a candidate's qualifications, as described below;

    a statement detailing any relationship, arrangement or understanding between the proposing stockholder and/or beneficial owner and any other person(s) (including their names) under which the proposing stockholder is making the nomination;

    a statement detailing any relationship, arrangement or understanding that might affect the independence of the candidate as a member of our board of directors;

    any other information that would be required under SEC rules in a proxy statement soliciting proxies for the election of such candidate as a director;

    a representation as to whether the proposing stockholder intends (or is part of a group that intends) to deliver any proxy materials or otherwise solicit proxies in support of the director nominee;

    a representation that the proposing stockholder is a holder of record of our common stock entitled to vote at the annual stockholders meeting and intends to appear in person or by proxy at the annual stockholders meeting at which the person named in such notice is to stand for election;

    a signed consent of the candidate to be named in the proxy statement and to serve as a director, if nominated and elected;

    a representation as to whether the proposing stockholder has received any financial assistance, funding or other consideration from any other person regarding the nomination (a Stockholder Associated Person) (including the details of such assistance, funding or consideration); and

    a representation as to whether and the extent to which any hedging, derivative or other transaction has been entered into with respect to our company within the last six months by, or is in effect with respect to, the proposing stockholder, any person to be nominated by the proposing stockholder or any Stockholder Associated Person, the effect or intent of which transaction is to mitigate loss to or manage risk or benefit of share price changes for, or increase or decrease the voting power of, the proposing stockholder, its nominee, or any such Stockholder Associated Person.

        In connection with its evaluation, the nominating and corporate governance committee may request additional information from the proposing stockholder and the candidate. The nominating and

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corporate governance committee has sole discretion to decide which individuals to recommend for nomination as directors.

        To be nominated to serve as a director, a nominee need not meet any specific minimum criteria. However, the nominating and corporate governance committee believes that nominees for director should possess the highest personal and professional ethics, integrity, values and judgment and should be committed to the long-term interests of our stockholders. When evaluating a potential director nominee, including one recommended by a stockholder, the nominating and corporate governance committee will take into account a number of factors, including, but not limited to, the following:

    independence from management;

    his or her unique background, including education, professional experience and relevant skill sets;

    judgment, skill, integrity and reputation;

    existing commitments to other businesses as a director, executive or owner;

    personal conflicts of interest, if any; and

    the size and composition of the existing board of directors, including whether the potential director nominee would positively impact the composition of the board by bringing a new perspective or viewpoint to the board of directors.

The nominating and corporate governance committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. The nominating and corporate governance committee does not have a formal policy with respect to diversity; however, our board and the nominating and corporate governance committee believe that it is essential that our board members represent diverse viewpoints.

        When seeking candidates for director, the nominating and corporate governance committee may solicit suggestions from incumbent directors, management, stockholders and others. After conducting an initial evaluation of a prospective nominee, the nominating and corporate governance committee will interview that candidate if it believes the candidate might be suitable to be a director. The nominating and corporate governance committee may also ask the candidate to meet with management. If the nominating and corporate governance committee believes a candidate would be a valuable addition to our board of directors, it may recommend to the full board that candidate's nomination and election.

        Prior to nominating an incumbent director for re-election at an annual meeting of stockholders, the nominating and corporate governance committee will consider the director's past attendance at, and participation in, meetings of the board of directors and its committees and the director's formal and informal contributions to the various activities conducted by the board and the board committees of which such individual is a member.

        The members of our nominating and corporate governance committee have determined that Messrs. Malone and Gilchrist and Ms. Wong, who are nominated for election at the annual meeting, continue to be qualified to serve as directors of our company and such nomination was approved by the entire board of directors.

        Our board of directors has adopted a written charter for the nominating and corporate governance committee. Our board of directors has also adopted corporate governance guidelines, which were developed by the nominating and corporate governance committee. The charter and the corporate governance guidelines are available on our website at www.libertyinteractive.com.

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    Audit Committee

        Our board of directors has established an audit committee, whose chairman is M. LaVoy Robison and whose other members are David E. Rapley, M. Ian G. Gilchrist and Larry E. Romrell. See "—Director Independence" above.

        Our board of directors has determined that Mr. Gilchrist is an "audit committee financial expert" under applicable SEC rules and regulations. The audit committee reviews and monitors the corporate financial reporting and the internal and external audits of our company. The committee's functions include, among other things:

    appointing or replacing our independent auditors;

    reviewing and approving in advance the scope and the fees of our annual audit and reviewing the results of our audits with our independent auditors;

    reviewing and approving in advance the scope and the fees of non-audit services of our independent auditors;

    reviewing compliance with and the adequacy of our existing major accounting and financial reporting policies;

    reviewing our management's procedures and policies relating to the adequacy of our internal accounting controls and compliance with applicable laws relating to accounting practices;

    confirming compliance with applicable SEC and stock exchange rules; and

    preparing a report for our annual proxy statement.

        Our board of directors has adopted a written charter for the audit committee, which is available on our website at www.libertyinteractive.com.

    Audit Committee Report

        Each member of the audit committee is an independent director as determined by our board of directors, based on the listing standards of The Nasdaq Stock Market. Each member of the audit committee also satisfies the SEC's independence requirements for members of audit committees. Mr. Gilchrist is the company's "audit committee financial expert" under applicable SEC rules and regulations.

        The audit committee reviews our financial reporting process on behalf of our board of directors. Management has primary responsibility for establishing and maintaining adequate internal controls, for preparing financial statements and for the public reporting process. Our independent auditor, KPMG LLP, is responsible for expressing opinions on the conformity of our audited consolidated financial statements with U.S. generally accepted accounting principles. Our independent auditor also expresses its opinion as to the effectiveness of our internal control over financial reporting.

        Our audit committee has reviewed and discussed with management and KPMG LLP our most recent audited consolidated financial statements, as well as management's assessment of the effectiveness of our internal control over financial reporting and KPMG LLP's evaluation of the effectiveness of our internal control over financial reporting. Our audit committee has also discussed with KPMG LLP the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T, Communications With Audit Committees, plus the additional matters required to be discussed by the Statement on Auditing Standards No. 114, The Auditor's Communication with Those Charged with Governance, as modified or supplemented,

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including that firm's judgment about the quality of our accounting principles, as applied in its financial reporting.

        KPMG LLP has provided our audit committee with the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding KPMG LLP's communications with the audit committee concerning independence, and the audit committee has discussed with KPMG LLP that firm's independence from the company and its subsidiaries.

        Based on the reviews, discussions and other considerations referred to above, our audit committee recommended to our board of directors that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2012, which was filed on February 28, 2013 with the SEC.

Submitted by the Members of the Audit Committee
M. LaVoy Robison
M. Ian G. Gilchrist
David E. Rapley
Larry E. Romrell

    Other

        Our board of directors, by resolution, may from time to time establish other committees of our board of directors, consisting of one or more of our directors. Any committee so established will have the powers delegated to it by resolution of our board of directors, subject to applicable law.


Board Meetings

        During 2012, there were 8 meetings of our full board of directors, no meetings of our executive committee, 14 meetings of our compensation committee, 1 meeting of our nominating and corporate governance committee and 6 meetings of our audit committee.


Director Attendance at Annual Meetings

        Our board of directors encourages all members of the board to attend each annual meeting of our stockholders. All but 2 of our board members then serving attended our 2012 annual meeting of stockholders.


Stockholder Communication with Directors

        Our stockholders may send communications to our board of directors or to individual directors by mail addressed to the Board of Directors or to an individual director c/o Liberty Interactive Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112. All such communications from stockholders will be forwarded to our directors on a timely basis.


Executive Sessions

        In 2012, the independent directors of our company, then serving, met at 2 executive sessions without management participation.

        Any interested party who has a concern regarding any matter that it wishes to have addressed by our independent directors, as a group, at an upcoming executive session may send its concern in writing addressed to Independent Directors of Liberty Interactive Corporation, c/o Liberty Interactive Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112. The current independent directors of our company are M. Ian G. Gilchrist, David E. Rapley, M. LaVoy Robison, Larry E. Romrell and Andrea L. Wong.

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EXECUTIVE COMPENSATION

        This section sets forth information relating to, and an analysis and discussion of, compensation paid by our company to the following persons (who we collectively refer to as our named executive officers):

    Gregory B. Maffei, our Chief Executive Officer and President;

    Christopher W. Shean, our Chief Financial Officer; and

    Michael A. George, Charles Y. Tanabe and Albert E. Rosenthaler, our other three most highly compensated executive officers at the end of 2012.

Mr. Tanabe resigned from all offices with our company on December 31, 2012 but remains a consulting employee of our company.


Compensation Discussion and Analysis

    Compensation Philosophy

        The compensation committee of our board of directors has responsibility for establishing, implementing and regularly monitoring adherence to our compensation philosophy. That philosophy seeks to align the interests of the named executive officers with those of our stockholders, with the ultimate goal of appropriately motivating and rewarding our executives in an effort to increase stockholder value. To that end, the compensation packages provided to the named executive officers include both cash and stock-based incentive compensation, with an emphasis placed on performance-based compensation.

        The compensation committee seeks to approve a compensation package for each named executive officer that is commensurate with the responsibilities and proven performance of that executive, and that is competitive relative to the compensation packages paid to similarly situated executives in other companies. The compensation committee does not engage in any benchmarking analysis; rather, it is familiar with the range of total compensation paid by other companies and uses this range as a guide to ensure that the named executive officers receive attractive compensation packages. The compensation committee believes that our compensation packages should assist our company in attracting key executives critical to our long-term success.

        In the case of all our named executive officers, the compensation committee believes that performance-based bonuses and equity incentive awards should represent a substantial portion of each named executive officer's compensation package. At our 2011 annual stockholders meeting, our stockholders' representing 96.6% of our aggregate voting power present and entitled to vote on our say-on-pay proposal approved, on an advisory basis, our executive compensation, as disclosed in our proxy statement for our 2011 annual meeting of stockholders. The compensation committee has not implemented any material changes to our executive compensation program as a result of this vote.

    Services Agreement

        In September 2011, we completed the split-off (the Old LMC Split-Off) of our former subsidiary then-known as Liberty Media Corporation (currently known as Starz, Old LMC). In January 2013, Old LMC completed the spin-off (the LMC Spin-Off) of its former subsidiary then-known as Liberty Spinco, Inc. (currently known as Liberty Media Corporation, Liberty Media). In connection with the Old LMC Split-Off, we entered into a services agreement with Old LMC, which was assumed by Liberty Media in the LMC Spin-Off. Pursuant to the services agreement, in 2012, we compensated Old LMC for the portion of the salary and other cash compensation Old LMC paid to our employees, including the named executive officers (other than Mr. George), that was allocable to our company for time spent by each such employee on matters related to our company. All of Mr. George's

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compensation was paid by our company and none of his time was allocated to Old LMC because Mr. George did not provide any services to Old LMC in 2012. In addition, the 2012 performance-based bonuses earned by our other named executive officers were paid directly by our company, and no portion thereof was allocable to Old LMC.

        During 2012, the allocable percentages of time spent performing services for Old LMC, on the one hand, and our company, on the other hand, were reviewed quarterly by the Audit Committee of our board for reasonableness. The salaries and certain perquisite information included in the "Summary Compensation Table" below (other than with respect to Mr. George, whose cash compensation is paid directly by QVC) includes the portion of the compensation paid by Old LMC to the named executive officers that was allocable to our company and for which we have reimbursed Old LMC and does not include the portion of any compensation allocable to Old LMC under the services agreement. During the year ended December 31, 2012, the weighted average percentage of each such named executive officer's time that was allocated to our company was: 47% as to Mr. Maffei; 21% as to Mr. Tanabe; 40% as to Mr. Rosenthaler; and 50% as to Mr. Shean.

    Role of Chief Executive Officer in Compensation Decisions

        Recommendations with respect to our executive compensation are obtained from our Chief Executive Officer as to all elements of each other named executive officer's compensation package. In taking these actions, our Chief Executive Officer evaluates the performance and contributions of each of the other named executive officers, given their respective areas of responsibility, and, in doing so, considers various qualitative factors such as:

    the named executive officer's experience and overall effectiveness;

    the named executive officer's performance against individual performance goals;

    the responsibilities of the named executive officer, including any changes to those responsibilities over the year;

    the named executive officer's demonstrated leadership and management ability;

    the named executive officer's compensation relative to other executives at our company with similar, greater or lesser responsibilities;

    the named executive officer's compensation relative to compensation paid to similarly situated executives at companies within our industry;

    the named executive officer's years of service with us; and

    the performance of any group for which the named executive officer is primarily responsible.

    Setting Executive Compensation

        In making its compensation decision for each named executive officer, our compensation committee considers the following:

    each element of the named executive officer's historical compensation, including salary, bonus, equity compensation, perquisites and other personal benefits;

    the financial performance of our company compared to internal forecasts and budgets;

    the scope of the named executive officer's responsibilities;

    the performance of the group reporting to the named executive officer; and

    the performance evaluations and compensation recommendations given by our Chief Executive Officer as to each other named executive officer.

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        Our compensation committee also considers the total compensation paid by companies that operate in the same industries as our company and our subsidiaries and uses this industry knowledge as a guide to determine whether our named executive officers receive attractive compensation packages. Companies in our and our subsidiaries' industries consist of publicly-traded video and online commerce companies and other consumer goods retailers, as well as media, telecommunications and entertainment companies, and include companies with which we may compete for executive talent and stockholder investment and also include companies in those industries that are similar to our company in size, geographic location or complexity of operations. Our compensation committee did not re-assess the compensation data in 2012 that it had compiled in prior years with respect to these industries. Rather, it relied on prior year assessments in determining not to make any substantive changes to our company's executive compensation structure, other than (i) revising the performance-based bonus program to give effect to the full year impact of the Old LMC Split-Off and (ii) the implementation of the Option Modification Program (as defined below) in response to changes (and proposed changes) in government policy and regulation.

        For 2012, the named executive officers' compensation packages were comprised primarily of a base salary and a performance-based bonus, which was consistent with the employment agreements to which two of the named executive officers (Messrs. Maffei and George) were party. No new equity awards were granted to any of the named executive officers in 2012, as they all received grants of multi-year equity incentive awards in 2009, 2010 or 2011. However, for the reasons described in more detail below, the named executive officers were entitled to, and did, participate in the Option Modification Program, which is described in more detail under "—Elements of 2012 Executive Compensation—Equity Incentive Compensation" below.

        With respect to all named executive officers, the compensation committee believes in weighing equity incentive compensation more heavily than cash compensation, which is a practice that may not be consistently followed by other companies that operate in the same industry as our company.

    Elements of 2012 Executive Compensation

        For 2012 the principal components of compensation for the named executive officers were:

    base salary;

    a performance-based bonus, payable in cash;

    grants of equity incentive awards in connection with the Option Modification Program; and

    perquisites and other limited personal benefits.

    Base Salary

        Our compensation committee reviews the base salaries of the named executive officers on an annual basis (other than Messrs. Maffei and George, who are compensated pursuant to their respective employment agreements), as well as at the time of any change in responsibilities. Historically, after establishing a named executive officer's base salary, our compensation committee has limited increases to cost-of-living adjustments and adjustments based on an evaluation of a named executive officer's job performance, any changes in the scope of the named executive officer's responsibilities, and the named executive officer's salary level compared to other named executive officers. Our compensation committee believes base salary should be a relatively smaller portion of each named executive officer's overall compensation package, thereby aligning the interests of our executives more closely with those of our stockholders. Our compensation committee considered these factors when setting or approving, as applicable, the base salary and annual increases to be paid to Messrs. Maffei and George under their respective employment agreements. After completion of the annual review described above, the named executive officers (other than Messrs. Maffei, Shean and George) received cost of living

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adjustments to their base salaries for 2012. Mr. Shean received an increase in his base salary from $670,000 to $770,000 in connection with his promotion to Chief Financial Officer in November 2011.

    2012 Performance-based Bonuses

        Liberty Awards—Overview.    For 2012, our compensation committee adopted an annual, performance-based bonus program for each of the named executive officers (other than Mr. George who participated in a separate performance-based bonus program, described under "-QVC Awards" below), which was structured to comply with Section 162(m) of the Internal Revenue Code (the Code). The 2012 bonus program was comprised of two components: a bonus amount payable based on each participant's individual performance (the Individual Performance Bonus) and a bonus amount payable based on the corporate performance of our company (the Corporate Performance Bonus). No amounts would be payable under our 2012 bonus program unless a minimum corporate performance was achieved: the combined Adjusted OIBDA of our subsidiaries, QVC and the eCommerce companies (which are comprised of Backcountry.com, Inc., Bodybuilding.com, LLC, Celebrate Interactive Holdings, LLC, Commerce Technologies, Inc., LMC Right Start, Inc., MotoSport, Inc. and Provide Commerce, Inc.), for the year ended December 31, 2012 was required to exceed $1 billion (the Threshold). If the Threshold was met, the notional bonus pool for our company would be funded with 2% of the amount by which such combined Adjusted OIBDA of QVC and the eCommerce companies exceeded $1 billion (the bonus pool). For purposes of the bonus program, Adjusted OIBDA is defined as revenue less cost of sales, operating expense and SG&A (excluding stock compensation). If the bonus pool was insufficient to cover the aggregate maximum bonus amounts of all participants (as described in more detail below), each participant's maximum bonus amount would be reduced pro rata, for all purposes under the program, based upon his respective maximum bonus amount.

        Each participant was assigned a maximum bonus amount, expressed as a multiple of his base salary (without giving effect to the allocation of such salary between our company and Old LMC). The maximum bonus amounts were 400%, 200% and 150% for our Chief Executive Officer, executive vice president and each senior vice president, respectively (each participant's Ultimate Maximum Bonus), consistent with the percentages applied to our named executive officers with respect to our 2011 performance-based bonus program. Although Old LMC adopted a corollary performance-based bonus program for 2012 with the same maximum bonus amounts achievable by the overlapping named executive officers, our compensation committee and Old LMC's compensation committee agreed that it was the intention of both committees that each overlapping named executive officer would not receive, in the aggregate from the two companies, more than his applicable Ultimate Maximum Bonus.

        Assuming the Threshold was met (and after taking into account any reductions associated with a shortfall in the bonus pool), each participant was entitled to receive from our company an amount (the LIC Maximum Individual Bonus) equal to the LIC Allocable Time Percentage (as defined below) multiplied by 60% of his Ultimate Maximum Bonus (the Ultimate Maximum Individual Bonus), subject to reduction based on a subjective determination of the participant's achievement of qualitative criteria established with respect to the services to be performed by the participant on behalf of our company. The LIC Allocable Time Percentage for each participant is equal to the percentage of such participant's time that was spent performing services for our company under the services agreement, as determined by our compensation committee for this purpose: 45% as to Mr. Maffei; 25% as to Mr. Tanabe; 40% as to Mr. Rosenthaler; and 50% as to Mr. Shean. Under Old LMC's corollary program, each participant was entitled to receive from Old LMC an amount (the Old LMC Maximum Individual Bonus) equal to the remaining portion of the Ultimate Maximum Individual Bonus, subject to reduction based on a subjective determination of the participant's achievement of qualitative criteria established with respect to the services to be performed by the participant on behalf of Old LMC. Our compensation committee believes this construct was appropriate in light of the services agreement and the fact that each participant splits his professional time and duties between the two companies. Our compensation

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committee engaged Pearl Meyer & Partners, LLC in March 2012 to provide limited assistance with the development of individual performance goals for each of the named executive officers, other than Mr. George.

        Also, assuming the Threshold was met (and after taking into account any reductions associated with a shortfall in the bonus pool), each participant was entitled to receive from our company an amount (the LIC Maximum Corporate Bonus) equal to the LIC Corporate Percentage (as defined below) multiplied by 40% of his Ultimate Maximum Bonus (the Ultimate Maximum Corporate Bonus), subject to reduction based on a subjective determination of the corporate performance of our company. The LIC Corporate Percentage is defined as the portion of the aggregate market capitalizations of our company and Old LMC at the beginning of the year represented by our company. Under Old LMC's corollary program, each participant was entitled to receive from Old LMC an amount (the Old LMC Maximum Corporate Bonus) equal to the remaining portion of the Ultimate Maximum Corporate Bonus, subject to reduction based on a subjective determination of the corporate performance of Old LMC.

        In December 2012, our compensation committee and the Old LMC compensation committee collaborated in their review of our respective named executive officers' individual performance criteria and their review of each company's corporate performance metrics and ensured that the Ultimate Maximum Bonus payable to each overlapping named executive officer was not exceeded. Notwithstanding this collaborative effort, our compensation committee retained sole and exclusive discretion with respect to the approval of award terms and amounts payable under our bonus program.

        Also, in December 2012, our compensation committee determined that the combined Adjusted OIBDA for QVC and the eCommerce companies was approximately $1.95 billion using the formula described above, exceeding the Threshold by approximately $952 million, thereby creating a notional bonus pool of approximately $19.04 million, which exceeded the amount necessary to cover the aggregate maximum bonus amounts of all the participants and enabling each participant to receive a bonus of up to his maximum bonus amount.

        Individual Performance Bonus.    Our compensation committee then reviewed the individual performance of each participant to determine the reductions that would apply to each participant's LIC Maximum Individual Bonus. The compensation committee took into account a variety of factors, without assigning a numerical weight to any single performance measure. This determination was based on reports of our board, the observations of committee members throughout the year, executive self-evaluations and, with respect to the participants other than Mr. Maffei, the observations and input of Mr. Maffei. In evaluating the performance of each of the participants for determining the reduction that would apply to the LIC Maximum Individual Bonus, our compensation committee considered the

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various performance objectives related to our company which had been assigned to each participant for 2012, including:

Individual
  Performance Objectives
Gregory B. Maffei  

Outperformance of peer and stock market indices by 5%

   

Creation of Ventures tracking stock

   

Rationalization of $250 million of non-core assets

   

Development of operating metrics and internal resources for Internet-based businesses

   

Assisting direct reports in achieving their goals

Charles Y. Tanabe

 

Provision of effective legal support in mergers and acquisitions and other transactional work

   

Complete legal actions required for Ventures tracking stock issuance

   

Implement D&O insurance program by year-end

   

Implement measures required to comply with Dodd-Frank rules within 60 days after adoption

   

Reduce costs of compliance with discovery requests by at least 10%

Albert E. Rosenthaler

 

Active participation in Tax Reform Roundtable

   

Active participation in RATE Coalition

   

Provision of effective tax support on transactional activity and strategic initiatives

   

Analysis of various tax advantaged business investments

   

Lead fast-track mediation with IRS for unresolved tax issues

Christopher W. Shean

 

Heightened oversight of subsidiaries throughout monthly reviews and semi-annual follow-up on achieving strategic objectives

   

Oversight of accounting and financial reporting functions to ensure timely and accurate SEC filings for our company and our subsidiaries with reporting requirements

   

Development and support of subordinates in new roles as Controller and Treasurer

   

Participation in and support of our mergers and acquisition activity and related integration

        Following a review of the participants' performance, our compensation committee determined to pay each participant the following portion of his LIC Maximum Individual Bonus:

Name
  LIC Maximum
Individual Bonus
  Percentage
Payable
  Aggregate
Dollar Amount
 

Gregory B. Maffei

  $ 1,786,050     81.3 % $ 1,451,166  

Charles Y. Tanabe

  $ 278,640     75 % $ 208,980  

Albert E. Rosenthaler

  $ 248,256     81.3 % $ 201,708  

Christopher W. Shean

  $ 346,500     75 % $ 259,875  

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        Corporate Performance Bonus.    Our compensation committee then made a subjective determination as to the reductions that would apply to each participant's LIC Maximum Corporate Bonus. In making this determination, our compensation committee reviewed forecasts of 2012 Adjusted OIBDA, revenue and free cash flow (as defined below) for QVC and the eCommerce companies (with respect to our company), excluding corporate overhead, all of which forecasts were prepared in December 2012 and are set forth in the table below. Also set forth in the table below are the corresponding actual financial measures achieved for 2012, which varied by approximately 1% from the forecasts, other than free cash flow, which was actually higher than the forecasted amount. In determining whether any reductions would be made to the LIC Maximum Corporate Bonus payable to each participant, our compensation committee weighted the corporate performance metrics as follows: 25% attributable to revenue growth, 50% attributable to Adjusted OIBDA growth and 25% attributable to growth in free cash flow.

(dollar amounts in millions)
  2012 Forecast   2012 Actual   Actual /
Forecast
 

Revenue(1)

  $ 10,093.4   $ 9,990.8     (1 )%

Adjusted OIBDA(1)

  $ 1,951.8   $ 1,922.8     (1 )%

Free Cash Flow(1)(2)

  $ 864.1   $ 1,006.1     16 %

(1)
Revenue, Adjusted OIBDA and Free Cash Flow information represents the summation for QVC and the eCommerce companies and excludes, in each case, corporate overhead.

(2)
Measured as Adjusted OIBDA less all other operating and investing items.

        Based on a review of these forecasts, our compensation committee determined that the growth metrics were achieved to the extent described below:

Growth Factor
  Achievement

Revenue

  15% of a possible 25%

Adjusted OIBDA

  35% of a possible 50%

Free Cash Flow

  25% of a possible 25%

        Our compensation committee then used its subjective discretion to translate the achievement of these growth metrics into a percentage payable to each participant of his LIC Maximum Corporate Bonus, as follows:

Name
  LIC Maximum
Corporate Bonus
  Percentage
Payable
  Aggregate
Dollar Amount
 

Gregory B. Maffei

  $ 1,587,600     75 % $ 1,190,700  

Charles Y. Tanabe

  $ 445,824     75 % $ 334,368  

Albert E. Rosenthaler

  $ 248,256     75 % $ 186,192  

Christopher W. Shean

  $ 277,200     75 % $ 207,900  

        Aggregate Results.    The following table presents information concerning the aggregate 2012 performance-based bonus amounts payable to each named executive officer by our company (other than Mr. George), after giving effect to the determinations described above.

Name
  Individual
Performance Bonus
  Corporate
Performance Bonus
  Total Bonus  

Gregory B. Maffei

  $ 1,451,166   $ 1,190,700   $ 2,641,866  

Charles Y. Tanabe

  $ 208,980   $ 334,368   $ 543,348  

Albert E. Rosenthaler

  $ 201,708   $ 186,192   $ 387,900  

Christopher W. Shean

  $ 259,875   $ 207,900   $ 467,775  

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        Our compensation committee then noted that, when combined with the total 2012 performance-based bonus amounts paid by Old LMC to the overlapping named executive officers, each of our named executive officers received the following portion of his respective Ultimate Bonus Amount:

Name
  Ultimate
Maximum Bonus
  Combined
Percentage Paid
 

Gregory B. Maffei

  $ 6,615,000     73.6 %

Charles Y. Tanabe

  $ 1,857,600     69.8 %

Albert E. Rosenthaler

  $ 1,034,400     73.6 %

Christopher W. Shean

  $ 1,155,000     69.8 %

        QVC Award.    Mr. George's 2012 performance-based bonus was structured to align with the 2012 performance-based bonus program established at QVC for QVC senior global officers and to comply with Section 162(m) of the Code. Pursuant to the program, Mr. George would be paid a bonus based upon 2012 QVC Global EBITDA growth, year over year, with a target bonus amount of 100% of his base salary as required by the terms of his employment agreement and a maximum bonus amount of 300% of his base salary. For this purpose, QVC Global EBITDA was defined as earnings before interest, taxes, depreciation and amortization of QVC (consolidated, on a constant currency basis), subject to adjustments to ensure year over year comparability.

        For any bonus to be paid, 2012 QVC Global EBITDA growth, year over year, would need to exceed 5%. If 2012 QVC Global EBITDA growth exceeded 5% then Mr. George would be eligible to receive a maximum bonus of 300% of his base salary, subject to reduction in the discretion of our compensation committee based on QVC Global EBITDA performance and individual performance, among other things. The year over year QVC Global EBITDA growth for 2012 was 6.3%, which exceeded the 5% minimum. After reviewing the year over year 2012 QVC Global EBITDA growth and considering the amount of the bonuses to be paid to other senior global QVC executives, the compensation committee (without applying an individual performance modifier) then determined to pay Mr. George a performance-based bonus of 85% of his base salary, which percentage was in line with the performance-based bonuses paid to other senior global QVC executives.

        For more information regarding these bonus awards, please see the "Grants of Plan-Based Awards" table below.

    Equity Incentive Compensation

        Consistent with our compensation philosophy, the compensation committee seeks to align the interests of the named executive officers with those of our stockholders by awarding stock-based incentive compensation. This ensures that our executives have a continuing stake in our long-term success. The compensation committee weighs stock-based compensation more heavily than cash compensation in determining each named executive officer's overall compensation mix.

        The Liberty Interactive Corporation 2007 Incentive Plan (As Amended and Restated Effective November 7, 2011) (the 2007 Incentive Plan), the Liberty Interactive Corporation 2010 Incentive Plan (As Amended and Restated Effective November 7, 2011) (the 2010 Incentive Plan) and the Liberty Interactive Corporation 2012 Incentive Plan (the 2012 Incentive Plan) provide for the grant of a variety of incentive awards, including stock options, restricted shares, restricted stock units, stock appreciation rights and performance awards. Our executives have historically been granted stock options and awards of restricted stock in preference to other awards because of our company's belief that options and restricted shares better promote retention of key employees through the continuing, long-term nature of an equity investment. It is the policy of our compensation committee that stock options be awarded with an exercise price equal to fair market value on the date of grant, measured by reference to the closing sale price on the grant date.

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        Over the past few years, our compensation committee has determined to make larger grants (equaling approximately four to five years' value of the annual grants made in years prior to 2009) that vest between four and five and three-quarters years after grant, rather than making annual grants over the same period. These multi-year grants provide for back-end weighted vesting and generally expire 10 years after grant to encourage executives to remain with the company over the long-term and to better align their interests with those of the stockholders. In that regard, multi-year awards were granted to our named executive officers by our compensation committee prior to 2012, and, accordingly, no new equity incentive awards were granted to the named executive officers during the 2012 calendar year.

        Option Modification Program.    In November and December 2012, our compensation committee determined to complete an equity modification program (the Option Modification Program) for the following reasons:

    We believed that the corporate tax rate would decrease in 2013 and beyond due to the wide-spread "fiscal cliff" concerns, which would result in the need for comprehensive tax reform. As a result, we sought to realize the compensation deduction in respect of the affected incentive awards at a potentially higher corporate tax rate than if such deduction were realized in later years.

    We believed that it was prudent to realize the compensation deduction in 2012 to ensure that we would have the benefit of the compensation deduction.

For income tax purposes, the exercise of the vested and unvested options pursuant to the Option Modification Program will allow our company to record deductions in 2012 for compensation expenses totaling $242 million. The cash tax benefit of these deductions was estimated at $85 million.

        On December 4, 2012 (the Grant Date), our compensation committee approved the acceleration of (i) each unvested in-the-money option to acquire shares of LINTA and (ii) each unvested in-the-money option to acquire shares of LVNTA, in each case, held by certain of our and our subsidiaries' officers (collectively, the Eligible Optionholders), including all of our named executive officers. Following this acceleration, also on the Grant Date, each Eligible Optionholder exercised, on a net settled basis, substantially all of his or her outstanding in-the-money vested and unvested options to acquire LINTA shares and LVNTA shares (the Eligible Options), and:

    with respect to each vested Eligible Option, our compensation committee granted the Eligible Optionholder a vested new option with substantially the same terms and conditions as the exercised vested Eligible Option, except that the exercise price for the new option was the closing price per LINTA or LVNTA share, as applicable, on The Nasdaq Global Select Market on the Grant Date; and

    with respect to each unvested Eligible Option:

    the Eligible Optionholder sold to our company the shares of LINTA or LVNTA, as applicable, received upon exercise of such unvested Eligible Option on the Grant Date for cash equal to the closing price per LINTA or LVNTA share, as applicable, on The Nasdaq Global Select Market on the Grant Date;

    each Eligible Optionholder (other than Mr. Maffei, whose purchase of common stock is described below) used the proceeds of that sale to purchase from our company at that price an equal number of restricted LINTA or LVNTA shares, as applicable, which have a vesting schedule identical to that of the unvested Eligible Option; and

    our company granted the Eligible Optionholder an unvested new option, with substantially the same terms and conditions as the unvested Eligible Option, except that (a) the number of shares underlying the new option was equal to the number of shares underlying such

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        unvested Eligible Option less the number of restricted shares purchased from our company as described above and (b) the exercise price of the new option was the closing price per LINTA or LVNTA share, as applicable, on The Nasdaq Global Select Market on the Grant Date.

For regulatory reasons, Mr. Maffei purchased some restricted shares of our non-voting Series C Liberty Interactive common stock (LINTC), rather than all restricted LINTA shares. However, these LINTC shares were exchanged, one for one, for LINTA shares promptly following early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which occurred prior to year end.

        Our compensation committee expected that the number of outstanding awards under its incentive plans would not increase as a result of the Option Modification Program described above. From a financial reporting perspective, our compensation committee determined that the exercise of the vested and unvested options would have no effect on our company's statement of operations. For more information regarding these awards, please see the "Grants of Plan-Based Awards" table below.

        Some of the awards were granted under the new 2012 Incentive Plan, which was approved and adopted by the Board and has substantially similar terms and conditions as our existing incentive plans. The 2012 Incentive Plan is being submitted to the stockholders of our company for approval at the 2013 annual meeting of our stockholders. The awards granted pursuant to the 2012 Incentive Plan and any additional awards granted under the 2012 Incentive Plan prior to the 2013 annual meeting of our stockholders remain subject to stockholder approval of the 2012 Incentive Plan.

    Perquisites and Other Personal Benefits

        The perquisites and other personal benefits available to our executives (that are not otherwise available to all of our salaried employees, such as matching contributions to the Liberty Media 401(k) Savings Plan and the payment of life insurance premiums) consist of:

    limited personal use of Liberty Media's corporate aircraft (pursuant to aircraft time sharing agreements between our company and Liberty Media);

    occasional, personal use of Liberty Media's apartment in New York City (pursuant to a sharing arrangement between our company and Liberty Media), which is primarily used for business purposes, and occasional, personal use of a company car and driver; and

    in the case of Mr. George, a tax gross-up relating to certain out of state income taxes to which Mr. George was subject in connection with the performance of his duties outside of QVC's headquarters.

        Aircraft Usage.    On occasion, and with the approval of our Chairman or Chief Executive Officer, executives may have family members and other guests accompany them on Liberty Media's corporate aircraft when traveling on business. Under the terms of the employment arrangements with our Chairman and Chief Executive Officer, those individuals and their guests may use the corporate aircraft we share with Liberty Media for non-business purposes subject to specified limitations.

        Pursuant to Mr. Maffei's employment agreement (which was assigned to Old LMC in the LMC Split-Off and then to Liberty Media in the LMC Spin-Off), Mr. Maffei is entitled to 120 hours per year of personal flight time through the first to occur of (i) the termination of his employment, subject to any continued right to use the corporate aircraft as described below or pursuant to the terms of his employment arrangement in effect at the time of the termination or (ii) the cessation of ownership or lease of corporate aircraft. Mr. Maffei's use of the company's aircraft is governed by a letter agreement with Mr. Maffei, originally entered into by Liberty Interactive and assumed by Old LMC in the Old LMC Split-Off and later by Liberty Media in the LMC Spin-Off). Under Mr. Maffei's employment

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agreement, if Mr. Maffei's employment terminates due to disability, for good reason or without cause, Mr. Maffei will be entitled to continued use of the corporate aircraft for 18 months after termination of his employment. Mr. Maffei incurs taxable income, calculated in accordance with the Standard Industry Fare Level (SIFL) rates, for all personal use of the corporate aircraft. Mr. Maffei's aircraft usage arrangement was amended in February 2013 to clarify that certain flights where there are no passengers on company-owned aircraft would not be charged against the 120 hours of personal flight time per year allotted to Mr. Maffei. Those flights will not be charged if the flight department determines that the use of a NetJets, Inc. supplied aircraft for a proposed personal flight would be disadvantageous to our company due to (i) use of budgeted hours under the then current Liberty Media fractional ownership contract with NetJets, Inc. or (ii) higher flight cost as compared to the cost of using company owned aircraft.

        For disclosure purposes, we determine the aggregate incremental cost to our company of an executive's personal use of corporate aircraft using a method that takes into account:

    landing and parking expenses;

    crew travel expenses;

    supplies and catering;

    aircraft fuel and oil expenses per hour of flight;

    any customs, foreign permit and similar fees; and

    passenger ground transportation.

Because the company's aircraft is used primarily for business travel, this methodology excludes fixed costs that do not change based on usage, such as salaries of pilots and crew, purchase or lease costs of aircraft and costs of maintenance and upkeep.

        Pursuant to aircraft time sharing agreements with Liberty Media, we pay Liberty Media for any costs, calculated in accordance with Part 91 of the Federal Aviation Regulations, associated with Mr. Maffei using its corporate aircraft that are allocable to our company.

        For purposes of determining an executive's taxable income, personal use of corporate aircraft is valued using a method based on SIFL rates, as published by the Treasury Department. The amount determined using the SIFL rates is typically lower than the amount determined using the incremental cost method. Under the American Jobs Creation Act of 2004, the amount we may deduct for a purely personal flight is limited to the amount included in the taxable income of the executives who took the flight. Also, the deductibility of any non-business use will be limited by Section 162(m) of the Code to the extent that the named executive officer's compensation that is subject to that limitation exceeds $1 million. See "—Deductibility of Executive Compensation" below.

        Gross-Up.    As a result of Mr. George's performance of his duties outside of QVC's headquarters, Mr. George is subject to taxation in New York State. In connection with his participation in the Option Modification Program, Mr. George was required to pay $207,735, for which QVC reimbursed Mr. George in full.

    Deductibility of Executive Compensation

        In developing the compensation packages for the named executive officers, the compensation committee considered the deductibility of executive compensation under Section 162(m) of the Code. That provision prohibits the deduction of compensation of more than $1 million paid to certain executives, subject to certain exceptions. One exception is for performance-based compensation, including stock options granted under the existing incentive plans or to be granted under the 2012 Incentive Plan. The compensation committee has not adopted a policy requiring all compensation to be

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deductible under Section 162(m) of the Code, in order to maintain flexibility in making compensation decisions. Portions of the compensation we pay to certain of the named executive officers may not be deductible due to the application of Section 162(m) of the Code.

    Policy on Restatements

        In those instances where we grant cash or equity-based incentive compensation, we include in the related agreement with the executive a right, in favor of our company, to require the executive to repay or return to the company any cash, stock or other incentive compensation (including proceeds from the disposition of shares received upon exercise of options or stock appreciation rights). That right will arise if (1) a material restatement of any of our financial statements is required and (2) in the reasonable judgment of our compensation committee, (A) such restatement is due to material noncompliance with any financial reporting requirement under applicable securities laws and (B) such noncompliance is a result of misconduct on the part of the executive. In determining the amount of such repayment or return, our compensation committee may take into account, among other factors it deems relevant, the extent to which the market value of the applicable series of our common stock was affected by the errors giving rise to the restatement. The cash, stock or other compensation that we may require the executive to repay or return must have been received by the executive during the 12-month period beginning on the date of the first public issuance or the filing with the SEC, whichever occurs earlier, of the financial statement requiring restatement. The compensation required to be repaid or returned will include (1) cash or company stock received by the executive (A) upon the exercise during that 12-month period of any stock appreciation right held by the executive or (B) upon the payment during that 12-month period of any incentive compensation, the value of which is determined by reference to the value of company stock, and (2) any proceeds received by the executive from the disposition during that 12-month period of company stock received by the executive upon the exercise, vesting or payment during that 12-month period of any award of equity-based incentive compensation.

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SUMMARY COMPENSATION TABLE

Name and Principal Position (as of 12/31/12)
  Year   Salary
($)(1)
  Bonus
($)
  Stock
Awards
($)
  Option
Awards
($)(2)(3)
  Non-Equity
Incentive Plan
Compensation
($)
  Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(4)
  All Other
Compensation
($)(5)(6)(7)
  Total ($)  

Gregory B. Maffei

    2012     778,641             41,688,138 (8)   2,641,866         193,395 (9)   45,302,040  

President and Chief Executive Officer

    2011     1,299,375                 1,587,600         384,718 (9)   3,271,693  

    2010     1,500,000                 4,302,000         593,793 (9)   6,395,793  

Charles Y. Tanabe

   
2012
   
193,500
   
   
   
4,049,495

(8)
 
543,348
   
   
6,776
   
4,793,119
 

Executive Vice President and General Counsel

    2011     743,956                 454,490         30,288     1,228,734  

    2010     875,500             16,528,958     1,332,073         29,403     18,765,934  

Michael A. George

   
2012
   
1,030,000
   
   
   
16,110,136

(8)
 
875,500
   
   
223,977

(11)
 
18,239,613
 

President, QVC, Inc.

    2011     1,000,000             27,867,300 (10)   700,000         52,583 (11)   29,619,883  

Albert E. Rosenthaler

   
2012
   
275,840
   
   
   
2,275,697

(8)
 
387,900
   
   
11,049
   
2,950,486
 

Senior Vice President

    2011     569,075                 376,092         26,517     971,684  

    2010     650,000             8,815,417     784,388         27,122     10,276,927  

Christopher W. Shean

   
2012
   
385,000
   
   
   
2,917,953

(8)
 
467,775
   
667
   
13,355
   
3,784,750
 

Senior Vice President and Chief Financial Officer

    2011     569,075                 323,369     8,905     25,816     927,165  

    2010     650,000             8,815,417     699,075     8,588     26,210     10,199,290  

(1)
With respect to the year ended December 31, 2012, the amounts set forth in this table reflect compensation paid to our named executive officers by Old LMC, but allocable to our company under the services agreement (except with respect to Mr. George, whose compensation reported above was paid directly by QVC with respect to the entire year and is not covered by the services agreement). With respect to the year ended December 31, 2011, the amounts set forth in this table reflect compensation paid to our named executive officers from January 1, 2011 to September 23, 2011 (the date of the Old LMC Split-Off) and compensation paid to our named executive officers by Old LMC, but allocable to our company under the services agreement, for the period September 24, 2011 to December 31, 2011 (except with respect to Mr. George, whose compensation reported above was paid directly by QVC with respect to the entire year and is not covered by the services agreement). With respect to the years ended December 31, 2010, the amounts set forth in this table reflect all compensation paid to our named executive officers by our company (other than Mr. George who first became a named executive officer of our company in 2011). See "—Compensation Discussion and Analysis—Services Agreement."

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(2)   The grant date fair value (or, in the case of awards granted pursuant to the Option Modification Program, the incremental fair value) has been computed in accordance with FASB ASC Topic 718, but (pursuant to SEC regulations) without reduction for estimated forfeitures. For a description of the assumptions applied in these calculations, see Note 14 to our consolidated financial statements for the year ended December 31, 2012 (which are included in our Annual Report on Form 10-K as filed with the SEC on February 28, 2013).

(3)

 

The Option Awards set forth in this column were received by our named executive officers in connection with the Option Modification Program (as described in more detail above), wherein our compensation committee approved the acceleration on December 4, 2012, the Grant Date, of (i) each unvested in-the-money option to acquire shares of LINTA and (ii) each unvested in-the-money option to acquire shares of LVNTA, in each case, held by the Eligible Optionholders, including all of our named executive officers. Following this acceleration, also on the Grant Date, each Eligible Optionholder exercised, on a net settled basis, substantially all of his or her Eligible Options, and:

 

 


 

with respect to each vested Eligible Option, our compensation committee granted the Eligible Optionholder a vested new option with substantially the same terms and conditions as the exercised vested Eligible Option, except that the exercise price for the new option was the closing price per LINTA or LVNTA share, as applicable, on The Nasdaq Global Select Market on the Grant Date; and

 

 


 

with respect to each unvested Eligible Option:

 

 

 

 


 

the Eligible Optionholder sold to our company the shares of LINTA or LVNTA, as applicable, received upon exercise of such unvested Eligible Option on the Grant Date for cash equal to the closing price per LINTA or LVNTA share, as applicable, on The Nasdaq Global Select Market on the Grant Date;

 

 

 

 


 

each Eligible Optionholder (other than Mr. Maffei, whose purchase of common stock is described below) used the proceeds of that sale to purchase from our company at that price an equal number of restricted LINTA or LVNTA shares, as applicable, which have a vesting schedule identical to that of the unvested Eligible Option; and

 

 

 

 


 

our company granted the Eligible Optionholder an unvested new option, with substantially the same terms and conditions as the unvested Eligible Option, except that (a) the number of shares underlying the new option was equal to the number of shares underlying such unvested Eligible Option less the number of restricted shares purchased from our company as described above and (b) the exercise price of the new option was the closing price per LINTA or LVNTA share, as applicable, on The Nasdaq Global Select Market on the Grant Date.

 

 

For regulatory reasons, Mr. Maffei purchased some restricted shares of LINTC, rather than all restricted LINTA shares. However, these LINTC shares were exchanged, one for one, for LINTA shares promptly following early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which occurred prior to year end.

(4)

 

Reflects the above-market earnings credited to Mr. Shean's deferred compensation account. See "—Nonqualified Deferred Compensation Plans" below. Additionally, the 2011 amount reflected for Mr. Shean represents the portion of above-market earnings incurred prior to the Old LMC Split-Off and an additional amount of above-market earnings following the Old LMC Split-Off on the portion of Mr. Shean's year-end bonus which was allocated to our company under the services agreement.

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(5)
The Liberty Media 401(k) Savings Plan, which was sponsored and administered by our company prior to the Old LMC Split-Off and was transferred to and assumed by Old LMC in the Old LMC Split-Off and later by Liberty Media in the LMC Spin-Off, provides employees with an opportunity to save for retirement. The Liberty Media 401(k) Savings Plan participants may contribute up to 75% of their eligible compensation on a pre-tax basis to the plan and an additional 10% of their eligible compensation on an after-tax basis (subject to specified maximums and IRS limits), and we contributed a matching contribution based on the participants' contributions as set forth in the plan. Participant contributions to the Liberty Media 401(k) Savings Plan are fully vested upon contribution.

Generally, participants acquire a vested right in our matching contributions as follows:

Years of Service
  Vesting Percentage  

Less than 1

    0 %

1 - 2

    33 %

2 - 3

    66 %

3 or more

    100 %

    Included in this column, with respect to each named executive officer (except with respect to Mr. George, for which matching contributions of $15,000 and $16,367 were made by QVC to its 401(k) savings plan in 2012 and 2011, respectively), are the following matching contributions made by our company to the Liberty Media 401(k) Savings Plan in each of 2012, 2011 and 2010, respectively:

 
  Amounts ($)  
Name
  2012   2011   2010  

Gregory B. Maffei

    11,771     24,500     24,500  

Charles Y. Tanabe

    5,208     24,500     24,500  

Albert E. Rosenthaler

    10,000     24,500     24,500  

Christopher W. Shean

    12,500     24,500     24,500  

    With respect to these matching contributions, all of our named executive officers are fully vested.

(6)
Included in this column are the following life insurance premiums paid by our company (with the exception of Mr. George, whose life insurance premium was paid by QVC), on behalf of each of the named executive officers and, with respect to amounts reflected for 2012 and 2011 following the Old LMC Split-Off, paid by Old LMC and allocated to our company under the services agreement:            

 
  Amounts ($)  
Name
  2012   2011   2010  

Gregory B. Maffei

    1,235     2,017     2,622  

Charles Y. Tanabe

    1,568     5,788     4,903  

Michael A. George

    1,242     1,373      

Albert E. Rosenthaler

    1,049     2,017     2,622  

Christopher W. Shean

    855     1,316     1,710  

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(7)   We make available to our personnel, including our named executive officers, tickets to various sporting events with no aggregate incremental cost attributable to any single person.

(8)

 

Represents the incremental fair value of the option awards granted to our named executive officers in connection with the Option Modification Program. See "—Compensation Discussion and Analysis—Elements of 2012 Executive Compensation—Equity Incentive Compensation—Option Modification Program".

(9)

 

Includes the following:

 
  Amounts ($)  
 
  2012   2011   2010  

Reimbursement for personal legal services

            118,589  

Compensation related to personal use of corporate aircraft(a)

    183,506     355,201     445,082  

(a)
Calculated based on aggregate incremental cost of such usage to our company.

    Prior to the Old LMC Split-Off, we owned an apartment in New York City which was primarily used for business purposes. The apartment was assigned to Old LMC in the Old LMC Split-Off and later to Liberty Media in the LMC Spin-Off. Mr. Maffei makes use of this apartment and a company car and driver for personal reasons. From time to time, we also pay the cost of miscellaneous shipping and catering expenses for Mr. Maffei.

(10)

 

Represents the grant date fair value of Mr. George's multi-year option award granted in March 2011. See "—Executive Compensation Arrangements—Michael A. George" for more information. Mr. George's multi-year option award is similar in function to the multi-year awards previously granted to named executive officers, and it was anticipated that Mr. George will not receive any additional equity awards during the term of his employment agreement with QVC (other than those made in connection with Mr. George's participation in the Option Modification Program).

(11)

 

Includes a tax gross-up relating to certain out of state income taxes to which Mr. George was subject as a result of the performance of his duties outside of QVC's headquarters. With respect to 2012, also includes a tax gross-up relating to certain out of state income taxes incurred in connection with Mr. George's participation in the Option Modification Program.

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Executive Compensation Arrangements

    Gregory B. Maffei

        Employment Agreement.    On December 17, 2009, the compensation committee approved in principle a new compensation arrangement in favor of Mr. Maffei providing, among other things, for a five year employment term beginning January 1, 2010 and ending December 31, 2014, with an annual base salary of $1.5 million, increasing annually by 5% of the prior year's base salary, and an annual target cash bonus equal to 200% of the applicable year's annual base salary. On May 17, 2010, we entered into a definitive employment agreement with Mr. Maffei, memorializing the compensation arrangement that was approved in principle by the compensation committee on December 17, 2009. The employment agreement also included terms related to Liberty Interactive Corporation equity awards held by Mr. Maffei, including the multi-year award of options that was granted to him on December 17, 2009 (as described in more detail below).

        Prior to the assumption of Mr. Maffei's 2009 employment agreement by Liberty Media in connection with the LMC Spin-Off, Old LMC assumed Mr. Maffei's 2009 employment agreement in connection with the Old LMC Split-Off and in February 2012 the agreement was amended and restated effective as of September 23, 2011 to reflect the change in employer and to specify the equity awards covered by the amended and restated employment agreement following the Old LMC Split-Off, which included a grant of options to Mr. Maffei on December 17, 2009 in connection with the approval in principle of his compensation arrangement. After giving effect to the adjustments made to equity awards in connection with the Old LMC Split-Off, the elimination of Old LMC's tracking stock structure, the creation of our Liberty Ventures tracking stock, the LMC Spin-Off and the Option Modification Program, the multi-year award granted to Mr. Maffei on December 17, 2009 has been converted into, exchanged for or adjusted to the following equity awards: options to acquire 5,933,101 shares of LINTA at an exercise price of $19.255, options to acquire 278,831 shares of LVNTA at an exercise price of $58.80, options to acquire 1,179,830 shares of Liberty Media's Series A common stock at an exercise price of $94.92, options to acquire 1,184,017 shares of Starz's Series A Liberty Capital common stock at an exercise price of $13.32, 813,647 restricted shares of Liberty Media's Series A common stock, 813,647 restricted shares of Starz's Series A Liberty Capital common stock, 2,591,584 restricted LINTA shares and 147,387 restricted LVNTA shares (such LINTA and LVNTA awards, the Multi-Year Awards). One-half of these options and restricted shares vest on December 17, 2013 with the remaining options and restricted shares vesting on December 17, 2014, in each case, subject to Mr. Maffei's continued employment on the applicable vesting date. The options have a term of 10 years. See "—Agreement Regarding LINTA Equity Awards" below for more information regarding these options and restricted shares that are now Liberty Interactive Corporation equity awards.

        Mr. Maffei's amended and restated agreement, which was assumed by Liberty Media in connection with the LMC Spin-Off, provides that: (i) in the event Mr. Maffei is terminated for cause (as defined in the agreement) he will be entitled only to his accrued base salary, unpaid expenses and any amounts due under applicable law; (ii) if Mr. Maffei terminates his employment without good reason (as defined in the agreement), he will be entitled only to his accrued base salary, accrued but unpaid bonus for the prior year, unpaid expenses and any amounts due under applicable law (Standard Payments); (iii) if Mr. Maffei is terminated by Liberty Media without cause or if he terminates his employment for good reason, the agreement provides for him to receive the Standard Payments and a severance payment of $7.8 million; and (iv) in the case of Mr. Maffei's death or his disability, the agreement provides for the right to receive the Standard Payments and a severance payment of $7.8 million. In addition, if Mr. Maffei is terminated without cause or due to disability, or terminates his employment for good reason, Mr. Maffei will be entitled to continuation of certain perquisites for 18 months, including use of our corporate aircraft.

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        Although we are not a party to Mr. Maffei's amended and restated employment agreement, we are obligated to reimburse Liberty Media for our allocable portion of any payments made to Mr. Maffei thereunder (other than payments relating to equity awards which are directly settled with the applicable issuer).

        Agreement Regarding LINTA Equity Awards.    Following the Old LMC Split-Off, Mr. Maffei continued to be the President and Chief Executive Officer of our company and we entered into an Agreement Regarding LINTA Equity Awards with Mr. Maffei, effective as of September 23, 2011, pursuant to which we agreed that for so long as Mr. Maffei is employed by us he will be employed as the company's President and Chief Executive Officer and will be nominated and recommended for election to our board of directors at each annual meeting of stockholders occurring prior to December 31, 2014. The agreement includes provisions, similar to those in Mr. Maffei's December 2009 employment agreement, regarding his employment as our company's President and Chief Executive Officer while he is employed by our company and regarding his position on our board of directors, including his membership on the executive committee of the board. The agreement does not include an obligation to pay Mr. Maffei a salary or bonus or to provide him with benefits (other than reimbursement of expenses) or to pay him severance upon termination of his employment with us, but our company bears a portion of the cost to Liberty Media of Mr. Maffei's salary, bonus, severance and other benefits pursuant to agreements entered into between our company and Old LMC (and later assumed by Liberty Media in connection with the LMC Spin-Off) in connection with the Old LMC Split-Off (as described above).

        The Agreement Regarding LINTA Equity Awards provides that, in the event Mr. Maffei is terminated for cause (as defined in the agreement), or if he terminates his employment without good reason (as defined in the agreement), he will forfeit all rights to his unvested restricted shares and unvested options. However, in both cases, his vested, unexercised options and similar rights as of his termination date will remain exercisable either (1) for 90 days after his termination or until the original expiration date of the applicable award, if sooner, or (2) if any such termination of his employment occurs following December 31, 2014 or following a change in control of our company (as defined in the agreement), until the original expiration date of the applicable award. If Mr. Maffei is terminated by our company without cause or if he terminates his employment for good reason, the agreement provides for his unvested restricted shares and unvested options and similar rights (including his Multi-Year Award) to vest pro rata based on the portion of the vesting period elapsed through the termination date plus 18 months and for all vested and accelerated options and similar rights to remain exercisable until their respective expiration dates; provided, that if Mr. Maffei continues to be employed by Liberty Media following such a termination from our company without cause or for good reason, he may elect to have certain of his unvested equity awards continue to vest in accordance with the terms of the agreement based on his continued service with Liberty Media. If a termination without cause or for good reason occurs within 90 days before or 210 days after members of the Malone Group (as defined in the agreement) cease to meet certain ownership requirements with respect to our company as described in the agreement, then Mr. Maffei's unvested restricted shares and unvested options and similar rights granted by our company will instead vest in full and will remain exercisable until their respective expiration dates. In the case of Mr. Maffei's death or his disability, the agreement provides for his unvested restricted shares and unvested options and similar rights to fully vest and for his vested and accelerated options and similar rights to remain exercisable until their respective expiration dates. Further, in the event of certain change in control transactions, including spin-off or split-off transactions which exceed a specified threshold of our company's consolidated assets, Mr. Maffei's unvested restricted shares and unvested options and similar rights would vest in full unless Mr. Maffei is named the Chief Executive Officer of the spin-off or split-off entity and his equity awards are adjusted in the transaction in such a manner as to preserve the intrinsic value thereof.

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        The Agreement Regarding LINTA Equity Awards further provides that it is intended to meet the requirements of Section 409A of the Internal Revenue Code (the Code) and provides for certain reimbursements to Mr. Maffei in the event the agreement does not so comply. The agreement also contains customary provisions pertaining to confidentiality and limitations on outside activities.

        Aircraft Usage.    In 2008, we entered into a letter agreement with Mr. Maffei, which was assumed by Old LMC in connection with the Old LMC Split-Off and later by Liberty Media in the LMC Spin-Off, pursuant to which he is entitled to personal use of corporate aircraft not to exceed 120 hours of flight time per year through the first to occur of the termination of his employment agreement with Liberty Media or the cessation of aircraft ownership by Liberty Media. Mr. Maffei will continue to incur taxable income, calculated in accordance with SIFL, for all personal use of Liberty Media's corporate aircraft. Pursuant to aircraft time sharing agreements with Liberty Media, we pay Liberty Media for any costs, calculated in accordance with Part 91 of the Federal Aviation Regulations, associated with Mr. Maffei using its corporate aircraft that are allocable to our company. Mr. Maffei's aircraft usage arrangement was amended in February 2013 to clarify that certain flights where there are no passengers on company-owned aircraft would not be charged against the 120 hours of personal flight time per year allotted to Mr. Maffei. Those flights will not be charged if the flight department determines that the use of a NetJets, Inc. supplied aircraft for a proposed personal flight would be disadvantageous to our company due to (i) use of budgeted hours under the then current Liberty Media fractional ownership contract with NetJets, Inc. or (ii) higher flight cost as compared to the cost of using company owned aircraft.

    Michael A. George

        On May 3, 2011, QVC entered into an employment agreement with Mr. George. The agreement provides for, among other things, a five year employment term beginning January 1, 2011 and ending December 15, 2015, with an annual base salary of $1 million, increasing annually by 3% of the prior year's base salary, and an annual target cash bonus equal to 100% of the applicable year's annual base salary which will be determined by the chief executive officer of our company pursuant to criteria established in QVC's annual bonus program (which program is approved each year by our company's chief executive officer) or, in the event Mr. George is considered a "covered employee" for any given year for purposes of Section 162(m) of the Code, his bonus will be determined by our company's compensation committee based on such criteria as approved in advance by such committee and that are designed in a manner such that the bonus will be treated as "qualified performance-based compensation" within the meaning of Section 162(m). Also pursuant to the agreement, Mr. George is entitled to certain welfare, retirement and fringe benefits available to senior-level executives of QVC.

        On March 2, 2011, Mr. George was granted 3.8 million options to acquire shares of LINTA (the 2011 Granted Awards) at an exercise price of $16.01 per share, which was the closing price of LINTA on such date. As a result of adjustments made to equity awards in connection with the Old LMC Split-Off, the creation of our Liberty Ventures tracking stock and the Option Modification Program, Mr. George's 2011 Granted Awards now consist of options to acquire 3,166,911 shares of LINTA at an exercise price of $19.255 per share and 146,180 shares of LVNTA at an exercise price of $58.80 per share, 540,383 restricted LINTA shares and 39,194 restricted LVNTA shares. One-half of the 2011 Granted Awards will vest on December 15, 2014 with the remaining options and restricted shares vesting on December 15, 2015. The options have a term of 7 years. It is anticipated that Mr. George will not receive any additional equity award grants during the term of his employment agreement other than those associated with his participation in the Option Modification Program. See "—Compensation Discussion and Analysis—Elements of 2012 Executive Compensation—Equity Incentive Compensation—Option Modification Program".

        The agreement provides that, in the event Mr. George is terminated for cause (as defined in the agreement), he will be entitled to his accrued base salary through the date of termination, unpaid

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expenses, his vested benefits and any amounts due under applicable law. In addition, all equity awards granted to Mr. George prior to January 1, 2011 that are outstanding and unvested at the time of his termination for cause (the Pre-2011 Unvested Awards) and all 2011 Granted Awards then held by Mr. George that have not become exercisable as of the date of such termination will be forfeited, and all equity awards granted to Mr. George prior to January 1, 2011 that are outstanding and vested but unexercised at the time of such termination (the Pre-2011 Vested Awards) and all 2011 Granted Awards that are outstanding and vested but unexercised as of the date of such termination will remain exercisable for a period of up to 90 days after the date of such termination or until the original expiration date of the options if sooner. If Mr. George terminates his employment without good reason (as defined in the agreement), he will be entitled to his accrued base salary though the date of termination, any declared but unpaid bonus for the calendar year prior to the year of termination, unpaid expenses, his vested benefits and any amounts due under applicable law. He will forfeit all rights to any Pre-2011 Unvested Awards and to any 2011 Granted Awards then held that have not become exercisable as of the date of his termination, any Pre-2011 Vested Awards that are options or similar rights will be treated as specified in the applicable agreement governing such equity award, and any 2011 Granted Awards that are outstanding and vested but unexercised as of the date of termination will be exercisable for a period of 90 days after the date of termination or until the original expiration date of the options if sooner. If, however, Mr. George terminates his employment for good reason or if his employment is terminated by QVC without cause, then he is entitled to receive his base salary for a period of one year and a lump sum payment of $1.5 million, in addition to accrued base salary through the date of termination, unpaid expenses, his vested benefits and any other amounts due under applicable law. In addition, any Pre-2011 Unvested Awards held on the date of termination that would have vested during the 365-day period following the date of such termination had Mr. George continued to be employed by QVC during such period will vest as of the date of termination. Further, a pro rata portion of each tranche of the 2011 Granted Awards that is not vested on the date of termination will vest as of such date, with such pro rata portion based on the portion of time Mr. George was employed by QVC and its affiliates during the vesting period of such tranche plus 365 days. The exercisability of any Pre-2011 Vested Awards, any vested 2011 Granted Awards and any Pre-2011 Unvested Awards that vest pursuant to the foregoing sentence will be extended to the earlier of the original expiration date of the option or two years from the date of the termination. In the case of Mr. George's death or disability (as defined in the agreement), the agreement provides for the right to receive his base salary for a period of one year, his accrued base salary through the date of termination, unpaid expenses, any declared but unpaid bonus for the calendar year prior to the year in which the termination occurs, his vested benefits and any amounts due under applicable law. In addition, the Pre-2011 Vested Awards, the Pre-2011 Unvested Awards and the 2011 Granted Awards will immediately vest and become exercisable (to the extent not already vested) and will be exercisable throughout the remainder of the full original term of such equity award.

    Charles Y. Tanabe

        Consulting Agreement.    Effective January 1, 2013, Old LMC entered into a consulting employee agreement (the consulting agreement) with Charles Y. Tanabe, which was assigned to Liberty Media in connection with the LMC Spin-Off. The consulting agreement provides for a two year term ending December 31, 2014 during which Mr. Tanabe will provide legal advice and counsel to Liberty Media and, pursuant to the services agreement, Liberty Interactive and our respective subsidiaries for up to 20 hours per month in the aggregate. At its option, Liberty Media may offer to extend the term of the consulting agreement through December 31, 2015. Mr. Tanabe will receive an annual salary of $60,000. Mr. Tanabe is also entitled to participate in all employee benefits plans and programs of Liberty Media for which he is eligible and he is entitled to receive any benefits and perquisites provided by Liberty Media to its senior executive officers. The consulting agreement may be terminated by either party at any time upon 30 days' prior written notice and may be terminated by Liberty Media at any time for

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cause (as defined in the consulting agreement). In the event of termination, Mr. Tanabe shall be entitled to receive any accrued but unpaid salary as of the date of termination, and any vested benefits under any plan, policy or program of Liberty Media or an affiliate will be payable in accordance with their terms. Although we are not a party to Mr. Tanabe's consulting agreement, we are obligated to reimburse Liberty Media for our allocable portion of any payments made to Mr. Tanabe thereunder (other than payments relating to equity awards which are not allocable under the services agreement) pursuant to the services agreement.

        Agreement Regarding Liberty Interactive Corporation Equity Awards.    In connection with his entry into the consulting agreement, Mr. Tanabe entered into a separate agreement with our company providing for amendments (which were approved by our compensation committee) to certain of Mr. Tanabe's outstanding Liberty Interactive equity awards. Pursuant to this agreement, all of Mr. Tanabe's Liberty Interactive equity awards that are options or stock appreciation rights (for purposes of this discussion, an option award), whether vested or unvested as of January 1, 2013, were amended as of such date to provide that upon Mr. Tanabe's separation from service (as described in the agreement) for any reason other than by our company for cause (including as a result of Mr. Tanabe's death or disability and including as a result of a voluntary termination by Mr. Tanabe), each option award that is vested and outstanding at the time of separation (including any option award that becomes vested as a result of such termination) will remain exercisable through the remainder of the term of such option award, determined without reference to any provision relating to such option award that reduces the exercisability of such option award upon Mr. Tanabe's termination of employment but otherwise in accordance with the terms and conditions applicable to such option award. The agreement also provides that all of Mr. Tanabe's option awards that are not vested as of January 1, 2013 (the unvested option awards) and all of Mr. Tanabe's unvested restricted shares as of such date were amended as of January 1, 2013 to provide that, to the extent not previously vested, such unvested option awards and restricted shares will vest in full on December 31, 2014, provided that Mr. Tanabe's separation has not occurred prior to such date and our company does not timely make an offer to extend the term of the consulting agreement. In the event such offer is timely made and Mr. Tanabe declines or is deemed to have declined such offer pursuant to the terms of the consulting agreement, any unvested option awards and restricted shares that remain unvested as of December 31, 2014 will terminate as of such date. The agreement also provides that upon any other separation of employment occurring without cause (whether before or after December 31, 2014), any unvested option awards and restricted shares will vest in full. The terms of the unvested option awards and unvested restricted shares providing for full vesting upon termination for death or disability remain in effect.

    Richard N. Baer

        Employment Agreement.    On November 7, 2012, Old LMC entered into an executive employment agreement (the employment agreement), effective October 31, 2012, with Richard Baer. Mr. Baer served as an independent contractor providing consulting services to Old LMC and Liberty Interactive from October 31, 2012 until the start of his employment as Senior Vice President and General Counsel with the companies on January 1, 2013. The employment agreement was assigned to Liberty Media in connection with the LMC Spin-Off. The agreement provides for, among other things, a four year term ending on December 31, 2016, with an annual base salary of $825,000, subject to adjustments at Liberty Media's discretion, and an annual discretionary bonus beginning in the calendar year 2013. Pursuant to the terms of the agreement, Mr. Baer's target bonus for each year is 100% of his annual base salary for that year, and in no event will his bonus for any year be greater than two times his annual base salary. Mr. Baer is also entitled to certain benefits and perquisites available to Liberty Media's senior executives. Pursuant to the agreement, on November 8, 2012, as part of the consideration for his services under the employment agreement, Mr. Baer was granted a combination of options and restricted shares. One-half of these options and restricted shares vest on December 31, 2015, with the remaining options and restricted shares vesting on December 31, 2016, in each case, subject to

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Mr. Baer being employed by our company on the applicable vesting date and to the early vesting events described below. The options have a term of 10 years.

        The agreement provides that, in the event Mr. Baer is terminated for cause (as defined in the employment agreement), he will be entitled to his accrued but unpaid base salary through the date of termination and any unpaid expenses. If, however, Mr. Baer terminates his employment for good reason (as defined in the employment agreement) or if his employment is terminated without cause (as defined in the employment agreement), then he is entitled to receive his accrued but unpaid base salary, any unpaid expenses, any accrued but unpaid bonus from the prior year and a severance payment of two times his annual base salary at the time of termination. If Mr. Baer terminates his employment without good reason (as defined in the employment agreement) or for any reason, he is entitled to receive any accrued but unpaid base salary, any accrued but unpaid bonus from the prior year and any unpaid expenses. In the case of Mr. Baer's death or disability (as defined in the employment agreement), the employment agreement provides for the right for his estate or him, as applicable, to receive any accrued but unpaid base salary, any unpaid expenses, any accrued but unpaid bonus from the prior year and a severance payment of two times his annual base salary at the time of death or disability (as defined in the employment agreement). As a condition to Mr. Baer's receipt of any severance payments as a result of his termination, as well as any acceleration of vesting or extension of exercise periods described in the grant agreements for the equity grants, Mr. Baer must execute a severance agreement and release in favor of Liberty Media in accordance with the procedures set forth in the employment agreement.

        Although we are not a party to Mr. Baer's employment agreement, we are obligated to reimburse Liberty Media for our allocable portion of any payments made to Mr. Baer thereunder (other than payments relating to equity awards which are directly settled with the applicable issuer) pursuant to the services agreement.

    Equity Incentive Plans

        The 2007 Incentive Plan, 2010 Incentive Plan and 2012 Incentive Plan are administered by the compensation committee of our board of directors. The compensation committee has full power and authority to grant eligible persons the awards described below and to determine the terms and conditions under which any awards are made. The existing incentive plans are designed to provide additional remuneration to certain employees and independent contractors for exceptional service and to encourage their investment in our company. Our compensation committee may grant non-qualified stock options, SARs, restricted shares, cash awards, performance awards or any combination of the foregoing under the existing incentive plans (collectively, awards).

        The maximum number of shares of our common stock with respect to which awards may be issued under the 2007 Incentive Plan is 38,185,000, under the 2010 Incentive Plan is 42,950,000 and under the 2012 Incentive Plan is 40,000,000, subject, in each case, to anti-dilution and other adjustment provisions of the respective plans. With limited exceptions, no person may be granted in any calendar year awards covering more than 6,439,698 shares of our common stock under the 2007 Incentive Plan, 6,874,244 shares of our common stock under the 2010 Incentive Plan and 8,000,000 shares of our common stock under the 2012 Incentive Plan (subject, in each case, to anti-dilution and other adjustment provisions of the plans) nor may any person receive under each of the existing incentive plans payment for cash awards during any calendar year in excess of $10 million. Shares of our common stock issuable pursuant to awards made under the existing incentive plans are made available from either authorized but unissued shares or shares that have been issued but reacquired by our company. Each of the 2007 Incentive Plan, the 2010 Incentive Plan and the 2012 Incentive Plan has a 5 year term.

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    2006 Deferred Compensation Plan

        Effective for the year beginning January 1, 2007 and until the time of the Old LMC Split-Off, officers of our company at the level of Senior Vice President and above were eligible to participate in the Liberty Media Corporation 2006 Deferred Compensation Plan (as amended, the 2006 deferred compensation plan). In connection with the Old LMC Split-Off (pursuant to which employees of our company became employees of Old LMC), Old LMC assumed this plan and all obligations outstanding thereunder. In connection with the LMC Spin-Off, Liberty Media assumed this plan and all obligations outstanding thereunder. Prior to the assumption of this plan by Old LMC, each eligible officer of our company, including our Chief Executive Officer, principal financial officer and principal accounting officer, could elect to defer up to 50% of his annual base salary and the cash portion of his performance bonus under the 2006 deferred compensation plan. Elections were required to be made in advance of certain deadlines and could include (1) the selection of a payment date, which generally could not be later than 30 years from the end of the year in which the applicable compensation is initially deferred, and (2) the form of distribution, such as a lump-sum payment or substantially equal annual installments over two to five years. Compensation deferred under the 2006 deferred compensation plan earned interest at the rate of 9% per year, compounded quarterly at the end of each calendar quarter.

        Following the Old LMC Split-Off, our officers are no longer permitted to elect the deferral of a portion of their base salary and performance bonus allocable to our company. Mr. Shean took advantage of a one-time deferral opportunity in 2011 with respect to a portion of his 2011 performance-bonus that was allocable to and paid by our company, and we will be responsible for the payment of such deferred amount and all interest thereon going forward.

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Grants of Plan-Based Awards

        The following table contains information regarding plan-based incentive awards granted during the year ended December 31, 2012 to the named executive officers.

 
   
  Estimated Future Payouts under
Non-equity Incentive Plan Awards
  All other
stock awards:
Number of
shares of
stock or units
(#)(4)
  All other
option awards:
Number of
securities
underlying options
(#)(4)
   
   
 
 
   
   
  Grant date
fair value of
stock and option
awards
($)(5)
 
 
   
  Exercise or
base price of
option awards
($/Sh)
 
Name
  Grant Date   Threshold
($)(2)
  Target
($)
  Maximum
($)(3)
 

Gregory B. Maffei

    3/29/12 (1)       3,307,500     6,615,000                  

LINTA

    12/4/12                 935,496              

LINTA

    12/4/12                 1,656,088              

LVNTA

    12/4/12                 53,203              

LVNTA

    12/4/12                 94,184              

LINTA

    12/4/12                     1,339,587     19.255     5,271,007  

LINTA

    12/4/12                     1,981,303     19.255     9,841,260  

LINTA

    12/4/12                     446,089     19.255     277,467  

LINTA

    12/4/12                     3,951,798     19.255     19,628,837  

LVNTA

    12/4/12                     66,950     58.80     1,330,625  

LVNTA

    12/4/12                     22,513     58.80     151,933  

LVNTA

    12/4/12                     100,651     58.80     1,872,380  

LVNTA

    12/4/12                     178,180     58.80     3,314,629  

Charles Y. Tanabe

   
3/29/12

(1)
 
   
928,800
   
1,857,600
   
   
   
   
 

LINTA

    12/4/12                 21,366              

LINTA

    12/4/12                 222,944              

LVNTA

    12/4/12                 1,215              

LVNTA

    12/4/12                 14,764              

LINTA

    12/4/12                     48,916     19.255     236,832  

LINTA

    12/4/12                     994,400     19.255     2,861,187  

LINTA

    12/4/12                     17,571     19.255     85,072  

LINTA

    12/4/12                     23,739     19.255     93,408  

LINTA

    12/4/12                     125,888     19.255     78,302  

LVNTA

    12/4/12                     878     58.80     16,139  

LVNTA

    12/4/12                     2,299     58.80     42,260  

LVNTA

    12/4/12                     1,187     58.80     23,592  

LVNTA

    12/4/12                     6,353     58.80     42,874  

LVNTA

    12/4/12                     46,071     58.80     569,829  

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  Estimated Future Payouts under
Non-equity Incentive Plan Awards
  All other
stock awards:
Number of
shares of
stock or units
(#)(4)
  All other
option awards:
Number of
securities
underlying options
(#)(4)
   
   
 
 
   
   
  Grant date
fair value of
stock and option
awards
($)(5)
 
 
   
  Exercise or
base price of
option awards
($/Sh)
 
Name
  Grant Date   Threshold
($)(2)
  Target
($)
  Maximum
($)(3)
 

Michael A. George

    3/29/12 (1)       1,030,000     3,090,000                  

LINTA

    12/4/12                 19,820              

LINTA

    12/4/12                 55,545              

LINTA

    12/4/12                 84,512              

LINTA

    12/4/12                 540,383              

LVNTA

    12/4/12                 3,417              

LVNTA

    12/4/12                 4,402              

LVNTA

    12/4/12                 1,031              

LVNTA

    12/4/12                 39,194              

LINTA

    12/4/12                     22,859     19.255     92,005  

LINTA

    12/4/12                     103,646     19.255     417,165  

LINTA

    12/4/12                     185,010     19.255     724,388  

LINTA

    12/4/12                     400,924     19.255     1,569,778  

LINTA

    12/4/12                     98,371     19.255     402,839  

LINTA

    12/4/12                     694,943     19.255     2,845,861  

LINTA

    12/4/12                     3,166,911     19.255     7,184,771  

LVNTA

    12/4/12                     1,103     58.80     21,521  

LVNTA

    12/4/12                     5,179     58.80     101,047  

LVNTA

    12/4/12                     8,614     58.80     136,169  

LVNTA

    12/4/12                     20,051     58.80     316,964  

LVNTA

    12/4/12                     4,742     58.80     94,055  

LVNTA

    12/4/12                     34,737     58.80     688,988  

LVNTA

    12/4/12                     146,180     58.80     1,514,586  

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  Estimated Future Payouts under
Non-equity Incentive Plan Awards
  All other
stock awards:
Number of
shares of
stock or units
(#)(4)
  All other
option awards:
Number of
securities
underlying options
(#)(4)
   
   
 
 
   
   
  Grant date
fair value of
stock and option
awards
($)(5)
 
 
   
  Exercise or
base price of
option awards
($/Sh)
 
Name
  Grant Date   Threshold
($)(2)
  Target
($)
  Maximum
($)(3)
 

Albert E. Rosenthaler

    3/29/12 (1)       517,200     1,034,400                  

LINTA

    12/4/12                 118,903              

LINTA

    12/4/12                 11,395              

LVNTA

    12/4/12                 648              

LVNTA

    12/4/12                 7,874              

LINTA

    12/4/12                     25,321     19.255     99,633  

LINTA

    12/4/12                     530,345     19.255     1,525,962  

LINTA

    12/4/12                     18,742     19.255     90,741  

LINTA

    12/4/12                     26,089     19.255     126,313  

LINTA

    12/4/12                     66,717     19.255     41,498  

LVNTA

    12/4/12                     1,266     58.80     25,162  

LVNTA

    12/4/12                     3,367     58.80     22,723  

LVNTA

    12/4/12                     937     58.80     17,224  

LVNTA

    12/4/12                     1,226     58.80     22,536  

LVNTA

    12/4/12                     24,571     58.80     303,906  

Christopher W. Shean

   
3/29/12

(1)
 
   
577,500
   
1,155,000
   
   
   
   
 

LINTA

    12/4/12                 118,903              

LINTA

    12/4/12                 11,395              

LVNTA

    12/4/12                 648              

LVNTA

    12/4/12                 7,874              

LINTA

    12/4/12                     25,321     19.255     99,633  

LINTA

    12/4/12                     530,345     19.255     1,525,962  

LINTA

    12/4/12                     112,451     19.255     544,443  

LINTA

    12/4/12                     26,089     19.255     126,313  

LINTA

    12/4/12                     66,717     19.255     41,498  

LVNTA

    12/4/12                     6,420     58.80     127,597  

LVNTA

    12/4/12                     3,367     58.80     22,723  

LVNTA

    12/4/12                     5,622     58.80     103,342  

LVNTA

    12/4/12                     1,226     58.80     22,536  

LVNTA

    12/4/12                     24,571     58.80     303,906  

(1)

  Reflects the date on which our compensation committee established the terms of the 2012 performance-based bonus program, as described under "—Compensation Discussion and Analysis—Elements of 2012 Executive Compensation—2012 Performance-based Bonuses—Liberty Awards—Overview" and "—Compensation Discussion and Analysis—Elements of 2012 Executive Compensation—2012 Performance-based Bonuses—QVC Awards."

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(2)

  Our 2012 performance-based bonus program does not provide for a threshold bonus amount for any named executive officer. For the actual bonuses paid by our company and QVC, as applicable, see the amounts included for 2012 in the column entitled Non-Equity Incentive Plan Compensation in the "Summary Compensation Table" above.

(3)

 

With respect to Messrs. Maffei, Tanabe, Rosenthaler and Shean, represents the maximum amount that would have been payable to each named executive officer assuming (x) the Threshold was met in order to permit the maximum bonus amounts to have been payable, (y) the full 60% of the participant's maximum bonus amount attributable to individual performance was attained and (z) the full 40% of the participant's maximum bonus amount attributable to corporate performance of our company was attained, and does not give effect to the allocation of any portion of such maximum bonus amount to Liberty Media under the services agreement. For more information on this performance bonus program, see "—Compensation Discussion and Analysis—Elements of 2012 Executive Compensation—2012 Performance-based Bonuses—Liberty Awards—Overview." With respect to Mr. George, represents the maximum amount that would have been payable to Mr. George assuming (x) the highest QVC EBITDA growth target of 10.5% was achieved and (y) Mr. George's individual performance warranted the maximum additional increase of his bonus determined based on QVC EBITDA growth. For more information on this performance bonus program, see "—Compensation Discussion and Analysis—Elements of 2012 Executive Compensation—2012 Performance-based Bonuses—QVC Awards."

(4)

 

Represents equity awards issued in connection with the Option Modification Program in December 2012. See "—Compensation Discussion and Analysis—Elements of 2012 Executive Compensation—Equity Incentive Compensation—Option Modification Program". For more information regarding the vesting terms of these awards, see "Outstanding Equity Awards at Fiscal Year End" below.

(5)

 

With respect to options awards issued in connection with the Option Modification Program, represents the incremental fair value of each award. With respect to restricted stock awards issued in connection with the Option Modification Program, such awards have no incremental fair value to report.

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Table of Contents

Outstanding Equity Awards at Fiscal Year-End

        The following table contains information regarding unexercised options and unvested shares of our common stock which were outstanding as of December 31, 2012 and held by the named executive officers, including those awards granted during 2012 and reflected in the "Grants of Plan-Based Awards" table above.

 
  Option awards   Stock awards  
Name
  Number of
securities
underlying
unexercised
options (#)
Exercisable
  Number of
securities
underlying
unexercised
options (#)
Unexercisable
  Option
exercise
price ($)
  Option
expiration
date
  Number of
shares or
units of
stock that
have not
vested (#)
  Market value of
shares or
units of
stock that
have not
vested ($)
 

Gregory B. Maffei

                                     

Option Awards

                                     

LINTA

    441,817         21.84     3/29/14          

LINTA

    446,089         19.255     12/24/14          

LINTA

    1,339,587         19.255     12/16/15          

LINTA

        1,981,303 (1)   19.255     12/17/19          

LINTA

        3,951,798 (1)   19.255     12/17/19          

LVNTA

    22,113         56.91     3/29/14          

LVNTA

    22,513         58.80     12/24/14          

LVNTA

    66,950         58.80     12/16/15          

LVNTA

        178,180 (1)   58.80     12/17/19          

LVNTA

        100,651 (1)   58.80     12/17/19          

Stock Awards

                                     

LINTA

                    935,496 (1)   18,410,561  

LINTA

                    1,656,088 (1)   32,591,812  

LVNTA

                    94,184 (1)   6,381,908  

LVNTA

                    53,203 (1)   3,605,035  

Charles Y. Tanabe

                                     

Option Awards

                                     

LINTA

    125,176         21.84     3/29/14          

LINTA

    125,888         19.255     12/24/14          

LINTA

    23,739         19.255     12/16/15          

LINTA

    17,571         19.255     12/17/16          

LINTA

        48,916 (2)   19.255     12/17/16          

LINTA

        994,400 (3)   19.255     3/19/20          

LVNTA

    3,049         40.14     7/31/13          

LVNTA

    6,265         56.91     3/29/14          

59


Table of Contents

 
  Option awards   Stock awards  
Name
  Number of
securities
underlying
unexercised
options (#)
Exercisable
  Number of
securities
underlying
unexercised
options (#)
Unexercisable
  Option
exercise
price ($)
  Option
expiration
date
  Number of
shares or
units of
stock that
have not
vested (#)
  Market value of
shares or
units of
stock that
have not
vested ($)
 

LVNTA

    6,353         58.80     12/24/14          

LVNTA

    1,187         58.80     12/16/15          

LVNTA

    878         58.80     12/17/16          

LVNTA

        2,299 (2)   58.80     12/17/16          

LVNTA

        46,071 (3)   58.80     3/19/20          

Stock Awards

                                     

LINTA

                    21,366 (2)   420,483  

LINTA

                    222,944 (3)   4,387,538  

LVNTA

                    14,764 (3)   1,000,409  

LVNTA

                    1,215 (2)   82,328  

Michael A. George

                                     

Option Awards

                                     

LINTA

    103,646         19.255     2/27/16          

LINTA

    694,943         19.255     4/6/16          

LINTA

    400,924         19.255     3/1/17          

LINTA

        22,859 (4)   19.255     2/27/16          

LINTA

        98,371 (5)   19.255     4/6/16          

LINTA

        185,010 (6)   19.255     3/1/17          

LINTA

        3,166,911 (7)   19.255     3/2/18          

LVNTA

    5,179         58.80     2/27/16          

LVNTA

    34,737         58.80     4/6/16          

LVNTA

    20,051         58.80     3/1/17          

LVNTA

        1,103 (4)   58.80     2/27/16          

LVNTA

        4,742 (5)   58.80     4/6/16          

LVNTA

        8,614 (6)   58.80     3/1/17          

LVNTA

        146,180 (7)   58.80     3/2/18          

60


Table of Contents

 
  Option awards   Stock awards  
Name
  Number of
securities
underlying
unexercised
options (#)
Exercisable
  Number of
securities
underlying
unexercised
options (#)
Unexercisable
  Option
exercise
price ($)
  Option
expiration
date
  Number of
shares or
units of
stock that
have not
vested (#)
  Market value of
shares or
units of
stock that
have not
vested ($)
 

Stock Awards

                                     

LINTA

                    19,820 (4)   390,058  

LINTA

                    84,512 (5)   1,663,196  

LINTA

                    53,572 (8)   1,054,297  

LINTA

                    55,545 (6)   1,093,126  

LINTA

                    540,383 (7)   10,634,737  

LINTA

                    100,000 (4)   1,968,000  

LVNTA

                    1,031 (4)   69,861  

LVNTA

                    4,402 (5)   298,280  

LVNTA

                    2,678 (8)   181,461  

LVNTA

                    3,417 (6)   231,536  

LVNTA

                    39,194 (7)   2,655,785  

LVNTA

                    5,000 (4)   338,800  

Albert E. Rosenthaler

                                     

Option Awards

                                     

LINTA

    66,287         21.84     3/29/14          

LINTA

    66,717         19.255     12/24/14          

LINTA

    25,321         19.255     12/16/15          

LINTA

    18,742         19.255     12/17/16          

LINTA

        26,089 (2)   19.255     12/17/16          

LINTA

        530,345 (3)   19.255     3/19/20          

LVNTA

    3,317         56.91     3/29/14          

LVNTA

    3,367         58.80     12/24/14          

LVNTA

    1,266         58.80     12/16/15          

LVNTA

    937         58.80     12/17/16          

LVNTA

        1,226 (2)   58.80     12/17/16          

LVNTA

        24,571 (3)   58.80     3/19/20          

Stock Awards

                                     

LINTA

                    11,395 (2)   224,254  

LINTA

                    118,903 (3)   2,340,011  

LVNTA

                    648 (2)   43,908  

LVNTA

                    7,874 (3)   533,542  

61


Table of Contents

 
  Option awards   Stock awards  
Name
  Number of
securities
underlying
unexercised
options (#)
Exercisable
  Number of
securities
underlying
unexercised
options (#)
Unexercisable
  Option
exercise
price ($)
  Option
expiration
date
  Number of
shares or
units of
stock that
have not
vested (#)
  Market value of
shares or
units of
stock that
have not
vested ($)
 

Christopher W. Shean

                                     

Option Awards

                                     

LINTA

    60,958         15.40     7/31/13          

LINTA

    60,953         14.03     8/6/14          

LINTA

    66,287         21.84     3/29/14          

LINTA

    66,717         19.255     12/24/14          

LINTA

    25,321         19.255     12/16/15          

LINTA

    112,451         19.255     12/17/16          

LINTA

        26,089 (2)   19.255     12/17/16          

LINTA

        530,345 (3)   19.255     3/19/20          

LVNTA

    3,049     — (5 )   40.14     7/31/13          

LVNTA

    3,048         36.57     8/6/14          

LVNTA

    3,317         56.91     3/29/14          

LVNTA

    3,367         58.80     12/24/14          

LVNTA

    6,420         58.80     12/16/15          

LVNTA

    5,622         58.80     12/17/16          

LVNTA

        1,226 (2)   58.80     12/17/16          

LVNTA

        24,571 (3)   58.80     3/19/20          

Stock Awards

                                     

LINTA

                    11,395 (2)   224,254  

LINTA

                    118,903 (3)   2,340,011  

LVNTA

                    648 (2)   43,908  

LVNTA

                    7,874 (3)   533,542  

                             

(1)   Vests 50% on December 17, 2013 and 50% on December 17, 2014.

(2)

 

Vests quarterly based on original amount of grant, with the first vesting date on March 17, 2013 and the final vesting date on December 17, 2013.

(3)

 

Vests one-third on June 30, 2013, one-third on June 30, 2014 and one-third on December 31, 2015.

(4)

 

Vests on February 27, 2013.

(5)

 

Vests on April 6, 2013.

(6)

 

Vests semi-annually (based on original term of grant) on each of March 1, 2013, September 1, 2013 and March 1, 2014.

(7)

 

Vests 50% on December 15, 2014 and 50% on December 15, 2015.

(8)

 

Vests 50% on March 1, 2013 and 50% on March 1, 2014.

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Table of Contents

Option Exercises and Stock Vested

        The following table sets forth information concerning (i) the exercise of vested options, (ii) the exercise of options that were unvested at the date of the Option Modification Program that were then accelerated in connection with the Option Modification Program (2012 unvested options), and (iii) the vesting of restricted stock held by our named executive officers, in each case, during the year ended December 31, 2012.

        As described in more detail above, in November and December 2012, in response to the wide-spread "fiscal cliff" concerns, our compensation committee determined to complete the Option Modification Program. The values shown in the "Option Awards—Value Realized on Exercise" column below include $146,653,376, which equals the aggregate amount related to the exercise by the named executive officers of 2012 unvested options pursuant to the terms of the Option Modification Program. The aggregate value related to the exercise of the 2012 unvested options included in the table below, net of amounts withheld for taxes, equals $86,539,957.

        Under the Option Modification Program, the 2012 unvested options were required to be replaced (with the exception of shares withheld for payment of taxes) with a combination of new unvested options and new unvested restricted stock awards that have the same vesting requirements and similar terms as the 2012 unvested options. As a result, the unvested options and unvested restricted shares received upon exercise of the 2012 unvested options, will not vest and will be subject to forfeiture by the named executive officers until the named executive officers satisfy the vesting and other requirements applicable to such awards. See "—Compensation Discussion and Analysis—Elements of 2012 Executive Compensation—Equity Incentive Compensation—Option Modification Program" for additional information concerning the Option Modification Program.

 
  Option Awards   Stock Awards  
Name
  Number of
shares
acquired on
exercise (#)(1)(2)
  Value
realized on
exercise ($)(2)
  Number of
shares
acquired on
vesting (#)(1)
  Value
realized on
vesting ($)
 

Gregory B. Maffei

                         

LINTA

    11,730,644     112,862,829     31,220     574,838  

LVNTA

    586,608     19,355,878     780     43,037  

Charles Y. Tanabe

                         

LINTA

    2,035,022     13,139,272     3,240     61,900  

LVNTA

    77,320     1,850,778     162     8,938  

Michael A. George

                         

LINTA

    5,647,924     41,404,444     126,786     2,352,505  

LVNTA

    268,650     7,223,630          

Albert E. Rosenthaler

                         

LINTA

    1,224,380     7,748,570     3,806     70,079  

LVNTA

    50,393     1,146,427     95     5,248  

Christopher W. Shean

                         

LINTA

    1,159,180     8,583,196     3,214     59,179  

LVNTA

    52,218     1,465,395     80     4,414  

(1)
Includes shares withheld in payment of withholding taxes at election of holder. In the aggregate, $60,113,419 was withheld for taxes payable by the named executive officers related to the exercise of 2012 unvested options.

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Table of Contents

(2)
Includes the following exercises of vested and 2012 unvested options in connection with the Option Modification Program (see "—Compensation Discussion and Analysis—Elements of 2012 Executive Compensation—Equity Incentive Compensation—Option Modification Program"). The "2012 Unvested Option Awards" column below includes values related to awards that are subject to continued vesting requirements with the exception of shares and amounts that were withheld for taxes:

 
  Vested Option Awards   2012 Unvested
Option Awards
 
Name
  Number of
shares
acquired on
exercise (#)
  Value
realized on
exercise ($)
  Number of
shares
acquired on
exercise (#)
  Value
realized on
exercise ($)
 

Gregory B. Maffei

                         

LINTA

    1,785,676     22,750,153     8,524,685     84,692,745  

LVNTA

    89,463     3,736,300     426,218     14,708,783  

Charles Y. Tanabe

                         

LINTA

    167,198     711,637     1,287,626     7,984,056  

LVNTA

    8,418     165,548     64,349     1,594,692  

Michael A. George

                         

LINTA

    1,199,513     14,971,545     4,173,411     22,699,638  

LVNTA

    59,967     2,467,454     208,683     4,756,176