DEF 14A 1 a2235260zdef14a.htm DEF 14A

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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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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))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

 

Qurate Retail, Inc.

(Name of Registrant as Specified In Its Charter)

N/A

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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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.

 

 

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LOGO

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

April 19, 2018

Dear Stockholder:

You are cordially invited to attend the 2018 annual meeting of stockholders of Qurate Retail, Inc. (Qurate), which was formerly known as Liberty Interactive Corporation, to be held at 8:15 a.m., local time, on May 23, 2018, at the corporate offices of Qurate, 12300 Liberty Boulevard, Englewood, Colorado 80112, telephone (720) 875-5300.

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 cooperation and continued support and interest in Qurate.

    Very truly yours,

 

 


GRAPHIC

 

 

Michael A. George
President and Chief Executive Officer

The proxy materials relating to the annual meeting will first be made available on or about April 23, 2018.


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QURATE RETAIL, INC.
12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5300

         

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be Held on May 23, 2018

NOTICE IS HEREBY GIVEN of the annual meeting of stockholders of Qurate Retail, Inc. (Qurate), which was formerly known as Liberty Interactive Corporation (Liberty Interactive), to be held at 8:15 a.m., local time, on May 23, 2018, at the corporate offices of Qurate, 12300 Liberty Boulevard, Englewood, Colorado 80112, telephone (720) 875-5300, to consider and vote on the following proposals:

1. A proposal (which we refer to as the election of directors proposal) to elect Richard N. Barton, Michael A. George and Gregory B. Maffei to continue serving as Class II members of our board until the 2021 annual meeting of stockholders or their earlier resignation or removal;


2.


A proposal (which we refer to as the auditors ratification proposal) to ratify the selection of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2018; and


3.


A proposal (which we refer to as the restated charter proposal) to approve the adoption of the restated certificate of incorporation of our company, which amends and restates our restated certificate of incorporation (the current charter) to (i) eliminate the tracking stock capitalization structure of our company, (ii) reclassify each share of each series of our existing QVC Group Common Stock (as defined in the accompanying proxy statement) into one share of the corresponding series of our New Common Stock (as defined in the accompanying proxy statement), and (iii) make certain conforming and clarifying changes in connection with the foregoing.

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 QVC Group common stock, par value $0.01 per share, and Series B QVC Group common stock, par value $0.01 per share, in each case, outstanding as of 5:00 p.m., New York City time, on April 2, 2018, 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. As a result of the Transactions (as defined in the accompanying proxy statement) no shares of Series A Liberty Ventures common stock, par value $0.01 per share, or Series B Liberty Ventures common stock, par value $0.01 per share, were outstanding on the record date, and accordingly former holders of those shares are not entitled to notice of the annual meeting or to vote at the annual meeting with respect to those shares. A list of stockholders entitled to vote at the annual meeting will be available at our offices at 12300 Liberty Boulevard, Englewood, Colorado 80112 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 auditors ratification proposal and the restated charter 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
    Senior Vice President, Deputy General Counsel and Secretary

Englewood, Colorado
April 19, 2018

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


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TABLE OF CONTENTS

PROXY STATEMENT SUMMARY    

THE ANNUAL MEETING

 

1

Electronic Delivery

  1

Time, Place and Date

  2

Purpose

  2

Quorum

  2

Who May Vote

  2

Votes Required

  2

Votes You Have

  2

Recommendation of Our Board of Directors

  3

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

  5

Changes in Control

  9

PROPOSALS OF OUR BOARD

 

10

PROPOSAL 1—THE ELECTION OF DIRECTORS PROPOSAL

 

10

Board of Directors

  10

Vote and Recommendation

  15

PROPOSAL 2—THE AUDITORS RATIFICATION PROPOSAL

 

16

Audit Fees and All Other Fees

  16

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

  16

Vote and Recommendation

  17

PROPOSAL 3—THE RESTATED CHARTER PROPOSAL

 

18

Description of New Common Stock

  18

Comparison of QVC Group Common Stock and New Common Stock

  20

Vote and Recommendation

  26


MANAGEMENT AND GOVERNANCE
MATTERS

 

27

Executive Officers

  27

Section 16(a) Beneficial Ownership Reporting Compliance

  28

Code of Ethics

  28

Director Independence

  28

Board Composition

  28

Board Leadership Structure

  28

Board Role in Risk Oversight

  28

Committees of the Board of Directors

  29

Board Meetings

  33

Director Attendance at Annual Meetings

  33

Stockholder Communication with Directors

  33

Executive Sessions

  33

EXECUTIVE COMPENSATION

 

34

Compensation Discussion and Analysis

  34

Summary Compensation Table

  48

Executive Compensation Arrangements

  50

Grants of Plan-Based Awards

  58

Outstanding Equity Awards at Fiscal Year-End

  60

Option Exercises and Stock Vested

  62

Nonqualified Deferred Compensation Plans

  63

Potential Payments Upon Termination or Change-in-Control

  63

DIRECTOR COMPENSATION

 

69

Nonemployee Directors

  69

John C. Malone

  71

Director Compensation Table

  72

EQUITY COMPENSATION PLAN
INFORMATION

 

74

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

75

Transaction between Chewy.com and zulily

  75

STOCKHOLDER PROPOSALS

 

76

ADDITIONAL INFORMATION

 

76

ANNEX A: FORM OF RESTATED CERTIFICATE OF INCORPORATION OF QURATE RETAIL, INC.

 

A-1

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PROXY STATEMENT SUMMARY

2018 ANNUAL MEETING OF STOCKHOLDERS


 


WHEN


ITEMS OF BUSINESS


 
 

8:15 a.m., local time, on May 23, 2018

WHERE

1.

Election of directors proposal—To elect Richard N. Barton, Michael A. George and Gregory B. Maffei to continue serving as Class II members of our board until the 2021 annual meeting of stockholders or their earlier resignation or removal.

 

 


The Corporate Offices of Qurate 12300 Liberty Boulevard
Englewood, Colorado 80112


2.


Auditors ratification proposal—To ratify the selection of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2018.


 

 


RECORD DATE

5:00 p.m., New York City time, on April 2, 2018



3.


Restated charter proposal—To approve the adoption of the restated certificate of incorporation of our company, which amends and restates our restated certificate of incorporation to (i) eliminate the tracking stock capitalization structure of our company, (ii) reclassify each share of each series of our existing QVC Group Common Stock (as defined herein) into one share of the corresponding series of our New Common Stock (as defined herein), and (iii) make certain conforming and clarifying changes in connection with the foregoing.

Such other business as may properly come before the annual meeting.



 
   

WHO MAY VOTE

Holders of shares of QRTEA and QRTEB

 

 


PROXY VOTING

Stockholders of record on the record date are entitled to vote by proxy in the following ways:



 

 


GRAPHIC


GRAPHIC


GRAPHIC


 
  By calling 1 (800) 652-8683
(toll free) in the United States or
Canada
Online at
www.envisionreports.com/Qurate
By returning a properly
completed, signed and dated
proxy card
 

ANNUAL MEETING AGENDA AND VOTING RECOMMENDATIONS

    Proposal   Voting
Recommendation

 
Page Reference
(for more detail)

 

 

 

Election of directors proposal

 


  

 

FOR EACH
NOMINEE

 

10

 

 
 

 

 

Auditors ratification proposal

 


 

FOR

 

16

 

 

 

 

Restated charter proposal

 


 

FOR

 

18

 

 
 

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QURATE RETAIL, INC.
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 2018 Annual Meeting of Stockholders to be held at 8:15 a.m., local time, at the corporate offices of Qurate, 12300 Liberty Boulevard, Englewood, Colorado 80112, on May 23, 2018, 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 QVC Group common stock, par value $0.01 per share (QRTEA), and Series B QVC Group common stock, par value $0.01 per share (QRTEB and together with QRTEA and Series C QVC Group Common Stock, par value $0.01 per share (QRTEK), QVC Group Common Stock). We refer to QRTEA and QRTEB together as our common stock in this proxy statement because there was no other series of our common stock outstanding on the record date, as described further below.

On March 9, 2018, Qurate (then known as Liberty Interactive) completed a series of transactions that effected the acquisition and split-off of GCI Liberty, Inc. (formerly known as General Communication, Inc.). In connection with the acquisition and split-off, Qurate (i) contributed to GCI Liberty, Inc. (GCI Liberty) certain assets and liabilities attributed to Qurate's Ventures Group in exchange for shares of GCI Liberty representing a controlling interest in GCI Liberty and (ii) redeemed (a) each outstanding share of Qurate's Series A Liberty Ventures common stock, $0.01 par value (LVNTA), for one share of GCI Liberty's Class A common stock, no par value, with no shares of LVNTA remaining outstanding, and (b) each outstanding share of Qurate's Series B Liberty Ventures common stock, $0.01 par value (LVNTB, and together with LVNTA, the Liberty Ventures Common Stock), for one share of GCI Liberty's Class B common stock, no par value, with no shares of LVNTB remaining outstanding. We refer to the foregoing as the Transactions. Simultaneous with the closing of the Transactions, shares of QRTEA and QRTEB became the only outstanding stock of Qurate, and thus QVC Group Common Stock ceased functioning as a tracking stock and effectively became regular common stock. As a result of the Transactions, no shares of Liberty Ventures Common Stock were outstanding on the record date, and accordingly former holders of those shares are not entitled to notice of the annual meeting or to vote at the annual meeting with respect to those shares.

Effective April 9, 2018, Liberty Interactive Corporation changed its name to Qurate Retail, Inc. In this proxy statement, we use "Liberty Interactive" to refer to our company with respect to periods before the name change and "Qurate" to refer to our company with respect to periods after the name change.

THE ANNUAL MEETING

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. Stockholders who hold shares through a bank, brokerage firm or other nominee may sign up for electronic delivery when voting by Internet at www.proxyvote.com, by following the prompts. Also, stockholders who hold shares through a bank, brokerage firm or other nominee may sign up for electronic delivery by contacting their nominee. Once you sign up, you will not receive a printed copy of the notices and proxy materials, unless you request them. If you are a registered stockholder, 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 should contact their nominee to suspend electronic delivery.

QURATE RETAIL, INC. 2018 PROXY STATEMENT   |  1


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TIME, PLACE AND DATE

The annual meeting of stockholders is to be held at 8:15 a.m., local time, on May 23, 2018, at the corporate offices of Qurate, 12300 Liberty Boulevard, Englewood, Colorado 80112, telephone (720) 875-5300.

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 Richard N. Barton, Michael A. George and Gregory B. Maffei to continue serving as Class II members of our board until the 2021 annual meeting of stockholders or their earlier resignation or removal;

    the auditors ratification proposal, to ratify the selection of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2018; and

    the restated charter proposal, to approve the adoption of the restated certificate of incorporation of our company, which amends and restates the current charter to (i) eliminate the tracking stock capitalization structure of our company, (ii) reclassify each share of each series of our existing QVC Group Common Stock into one share of the corresponding series of our New Common Stock (as defined herein), and (iii) make certain conforming and clarifying changes in connection with the foregoing.

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 conduct the business of the annual meeting, a quorum must be present. This means that the holders of at least a majority of the aggregate voting power represented by the shares of our common stock outstanding on the record date and entitled to vote at 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 you indicate on your proxy 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) will nevertheless 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 2, 2018 (such date and time, 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.

VOTES REQUIRED

Each director nominee who receives a plurality of the combined voting power of the outstanding shares of our common stock present in person or represented by proxy at the annual meeting and entitled to vote on the election of directors at the annual meeting, voting together as a single class, will be elected to the office.

Approval of the auditors ratification proposal requires the affirmative vote of a majority of the combined 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.

Approval of the restated charter proposal requires the affirmative vote of a majority of the combined voting power of the shares of our common stock outstanding on the record date, voting together as a single class.

VOTES YOU HAVE

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

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THE ANNUAL MEETING


RECOMMENDATION OF OUR BOARD OF DIRECTORS

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

SHARES OUTSTANDING

As of the record date, an aggregate of approximately 443,525,000 shares of QRTEA and 29,258,000 shares of QRTEB were issued and outstanding and entitled to vote at the annual meeting.

NUMBER OF HOLDERS

There were, as of the record date, 2,887 and 86 record holders of QRTEA and QRTEB, 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, by telephone or through the Internet. Alternatively, they may give a proxy by completing, signing, dating and returning the proxy card by mail. Instructions for voting by using the telephone or the Internet are printed on the proxy voting instructions attached to the proxy card. In order to vote through the Internet, holders should have their proxy cards available so they can input the required information from the proxy card, and log onto the Internet website address shown on the proxy card. When holders log onto the Internet website address, they will receive instructions on how to vote their shares. The telephone and Internet voting procedures are designed to authenticate votes cast by use of a personal identification number, which will be provided to each voting stockholder separately. 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 proxy even if you plan to attend the annual meeting. You may change your vote at the annual meeting.

If you submit a properly executed 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 election of each director nominee and "FOR" each of the auditors ratification proposal and the restated charter proposal.

If you submit a proxy indicating that you abstain from voting as to a proposal, it will have no effect on the election of directors proposal and will have the same effect as a vote "AGAINST" each of the other proposals.

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 (if a quorum is present), other than the restated charter proposal. In this case, your shares will have the same effect as a vote "AGAINST" the restated charter proposal.

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 when voting your shares or to grant or revoke a proxy. The rules and regulations of the New York Stock Exchange and The Nasdaq Stock Market LLC (Nasdaq) prohibit brokers, banks and other nominees from voting shares on behalf of their clients with respect to numerous matters, including, in our case, all of the proposals described in this proxy statement other than

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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, other than the restated charter proposal. A broker non-vote will have the same effect as a vote "AGAINST" the restated charter proposal. 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.

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 Qurate Retail, Inc., c/o Computershare Investor Services, P.O. Box 505008, Louisville, Kentucky 40233-9814. Any signed proxy revocation or later-dated 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 May 23, 2018.

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 pay the cost of soliciting these proxies. We also reimburse brokers and other nominees for their expenses in sending paper proxy materials to you and getting your voting instructions.

If you have any further questions about voting or attending the annual meeting, please contact Qurate Investor Relations at (866) 876-0461.

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. 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 each series of our common stock. All of such information is based on publicly available filings, unless otherwise known to us from other sources.

The security ownership information is given as of February 28, 2018 and, in the case of percentage ownership information, is based upon (1) 445,988,836 QRTEA shares and (2) 29,203,895 QRTEB shares, in each case, outstanding on that date. The percentage voting power is presented on an aggregate basis for both series of our common stock. The security ownership information does not include information regarding shares of LVNTA or LVNTB, as those shares are no longer outstanding following the closing of the Transactions.

Name and Address of Beneficial Owner
Title of
Series

Amount and
Nature of
Beneficial
Ownership

Percent of
Series
(%)

Voting
Power
(%)

John C. Malone

QRTEA 393,159 (1) * 37.5

c/o Qurate Retail, Inc.

QRTEB 27,655,931 (1) 94.7  

12300 Liberty Boulevard

       

Englewood, CO 80112

       

The Vanguard Group

QRTEA 34,753,717 (2) 7.8 4.7

100 Vanguard Blvd.

QRTEB

Malvern, PA 19355

       

Harris Associates L.P.

QRTEA 25,651,705 (3) 5.8 3.5

111 S. Wacker Drive, Suite 4600

QRTEB  

Chicago, IL 60606

       

Dodge & Cox

QRTEA 34,583,908 (4) 7.8 4.7

555 California Street, 40th Floor

QRTEB

San Francisco, CA 94104

       
*
Less than one percent

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

(2)
Based on Amendment No. 1 to Schedule 13G, filed February 13, 2018, by The Vanguard Group (Vanguard), which states that, with respect to QRTEA, Vanguard has sole voting power over 338,993 shares, shared voting power over 89,976 shares, sole dispositive power over 34,360,066 shares and shared dispositive power over 393,651 shares.

(3)
Based on Amendment No. 3 to Schedule 13G, filed February 14, 2018, jointly by Harris Associates L.P. (Harris L.P.) and Harris Associates Inc. (Harris Inc.), which states that, with respect to QRTEA, each of Harris L.P. and Harris Inc. has sole voting power over 24,162,150 shares and sole dispositive power over 25,651,705 shares.

(4)
Based on Schedule 13G, filed February 13, 2018, by Dodge & Cox, which states that, with respect to QRTEA, Dodge & Cox has sole voting power over 32,860,081 shares and sole dispositive power over 34,583,908 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 (as defined herein) and by all of our directors and executive officers as a group of shares of each series of our common stock (QRTEA and QRTEB). The security ownership information with respect to our common stock is given as of February 28, 2018 and, in the case of percentage ownership information, is based upon (1) 445,988,836 QRTEA shares and (2) 29,203,895 QRTEB shares, in each case, outstanding on that date. The percentage voting power is presented in the table below on an aggregate basis for both series of

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common stock. The security ownership information does not include information regarding shares of LVNTA or LVNTB, as those shares are no longer outstanding following the closing of the Transactions.

The table also includes performance-based restricted stock units that had been certified as earned by our compensation committee on or before February 28, 2018 that will be settled in shares of our common stock within 60 days of such date. 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, 2018 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 QRTEB, though convertible on a one-for-one basis into shares of QRTEA, are reported as beneficial ownership of QRTEB only, and not as beneficial ownership of QRTEA. 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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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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, 2018. 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
(In thousands)

Percent of
Series
(%)

Voting
Power
(%)

Gregory B. Maffei

QRTEA 10,317 (2)(3)(4)(5) 2.3 3.3

Chairman of the Board

QRTEB 1,456 (4)(6) 4.8  

and Director and Former President and

       

Chief Executive Officer(1)

       

Michael A. George

QRTEA 1,479 (6) * *

President, Chief Executive

QRTEB

Officer and Director; President and

       

Chief Executive Officer, QVC, Inc.(1)

       

John C. Malone

QRTEA 393 (2)(8)(9) * 37.5

Director and Former Chairman of

QRTEB 27,656 (8)(10)(11) 94.7  

the Board(7)

       

Richard N. Barton

QRTEA 14 (4)(12) * *

Director

QRTEB

Fiona P. Dias

QRTEA (13)

Director

QRTEB  

M. Ian G. Gilchrist

QRTEA 8 (4) * *

Director

QRTEB

Evan D. Malone

QRTEA 54 (4) * *

Director

QRTEB  

David E. Rapley

QRTEA 19 (4) * *

Director

QRTEB

M. LaVoy Robison

QRTEA 56 (4) * *

Director

QRTEB  

Larry E. Romrell

QRTEA 68 (4) * *

Director

QRTEB ** *

Mark C. Vadon

QRTEA 869 (4)(14) * *

Director

QRTEB  

Andrea L. Wong

QRTEA 27 * *

Director

QRTEB

Richard N. Baer

QRTEA 332 (4)(6) * *

Chief Legal Officer

QRTEB  

Mark D. Carleton

QRTEA 218 (4)(6) * *

Chief Financial Officer

QRTEB  

Albert E. Rosenthaler

QRTEA 510 (2)(4)(6) * *

Chief Corporate Development

QRTEB  

Officer

       

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Name
Title of
Series

Amount and Nature of
Beneficial Ownership
(In thousands)

Percent of
Series
(%)

Voting
Power
(%)

All directors and executive
officers (as a group
(15 persons)



QRTEA 14,365 (2)(3)(4)(5)(6)(8)(9)

(12)(13) (14)

3.2 40.4

QRTEB 29,113 (4)(6)(8)(10)(11) 96.0
*
Less than one percent

**
Less than 1,000 shares

(1)
Mr. Maffei ceased serving as our President and Chief Executive Officer and began serving as our Chairman of the Board, effective March 9, 2018. Mr. George began serving as our President and Chief Executive Officer effective March 9, 2018.

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

Gregory B. Maffei

7,655

John C. Malone

429

Albert E. Rosenthaler

15,257

Total

23,341

 
(3)
Includes 32,932 QRTEA shares held by the Maffei Foundation, as to which shares Mr. Maffei has disclaimed beneficial ownership.

(4)
Includes beneficial ownership of shares that may be acquired upon exercise of, or which relate to, stock options exercisable within 60 days after February 28, 2018.
 
QRTEA
QRTEB

Gregory B. Maffei

5,670,630 996,515

Richard N. Barton

13,785

M. Ian G. Gilchrist

7,524

Evan D. Malone

10,958

David E. Rapley

11,223

M. LaVoy Robison

42,108

Larry E. Romrell

33,404

Mark C. Vadon

864,737

Richard N. Baer

246,288

Mark D. Carleton

174,428

Albert E. Rosenthaler

281,836

Total

7,356,921 996,515

   
(5)
Includes 1,749,497 QRTEA shares pledged to Morgan Stanley Private Bank, National Association in connection with a loan facility.

(6)
Includes performance-based restricted stock units that had been certified as earned by our compensation committee on or before February 28, 2018 that will be settled in shares of our common stock within 60 days of such date, as follows:
 
QRTEA
QRTEB

Gregory B. Maffei

115,207

Michael A. George

214,174

Richard N. Baer

24,962

Mark D. Carleton

18,638

Albert E. Rosenthaler

18,638

Total

276,412 115,207

   
(7)
Mr. Malone ceased serving as Chairman of the Board effective March 9, 2018 but continued serving as a director.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(8)
Includes 376,260 QRTEA shares and 852,358 QRTEB shares held by Mr. Malone's wife, Mrs. Leslie Malone, as to which shares Mr. Malone has disclaimed beneficial ownership.

(9)
Includes (i) 16,470 QRTEA shares pledged to Fidelity Brokerage Services, LLC (Fidelity) in connection with a margin loan facility extended by Fidelity and (ii) 376,260 QRTEA shares pledged to Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) in connection with a margin loan facility extended by Merrill Lynch.

(10)
Includes 458,946 QRTEB shares 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.

(11)
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 Liberty Interactive's 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 QRTEB shares owned by the Malones. The call agreement also prohibits the Malones from disposing of their QRTEB 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 QRTEB after conversion to shares of QRTEA) and except for transfers made in compliance with our call rights.

(12)
Includes 66 QRTEA shares held by the Barton Descendants' Trust 12/30/2004 over which Mr. Barton has investment power but not voting power.

(13)
Upon the completion of our acquisition of HSN, Inc., Qurate (then known as Liberty Interactive) assumed Ms. Dias's outstanding deferred stock units with respect to HSN, Inc. common stock and converted such deferred stock units into 9,045 restricted stock units with respect to QRTEA shares. Ms. Dias's restricted stock units will vest upon her termination of service from the board of directors.

(14)
Upon the completion of our acquisition of zulily, Qurate (then known as Liberty Interactive) assumed Mr. Vadon's outstanding options to acquire 1,315,390 shares of zulily's Class B common stock and converted such options into 864,737 options to purchase QRTEA shares.

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 twelve directors, divided among three classes. Our Class II directors, whose term will expire at the 2018 annual meeting, are Richard N. Barton, Michael A. George, Gregory B. Maffei and M. Lavoy Robison. These directors, with the exception of Mr. Robison, are nominated for election to our board to continue serving as Class II directors, and we have been informed that each of Messrs. Barton, George and Maffei are willing to continue serving as a director of our company. M. Lavoy Robison has decided to retire from service on the board of directors and will not be standing for re-election upon the expiration of his term at the annual meeting. At such time, the board of directors will be decreased to eleven directors. The term of the Class II directors who are elected at the annual meeting will expire at the annual meeting of our stockholders in the year 2021. Our Class III directors, whose term will expire at the annual meeting of our stockholders in the year 2019, are John C. Malone, M. Ian G. Gilchrist, Mark C. Vadon and Andrea L. Wong. Our Class I directors, whose term will expire at the annual meeting of stockholders in the year 2020, are Fiona P. Dias, Evan D. Malone, David E. Rapley and Larry E. Romrell.

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 eight 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 is set forth in this proxy statement under the caption "Security Ownership of Certain Beneficial Owners and Management."

Nominees for Election as Directors

Richard N. Barton

    Age:  50

    A director of our company.

    Professional Background:  Mr. Barton has served as a director of our company since December 2016. Mr. Barton is a co-founder and Executive Chairman of Zillow Group, Inc. (Zillow Group) and was Chief Executive Officer from December 2004 to September 2010. He also is a co-founder of Glassdoor.com and Trover. Mr. Barton has served as a venture partner at Benchmark Capital, a venture capital firm, since February 2005. Mr. Barton founded Expedia as a group within Microsoft Corporation (Microsoft) in 1994, which was spun out as Expedia, Inc. in 1999. Mr. Barton served as Expedia, Inc.'s Chief Executive Officer and President from 1999 to 2003.

    Other Public Company Directorships:  Mr. Barton has served as Executive Chairman of Zillow Group since September 2010 and has been a member of its board of directors since its founding in December of 2004. Mr. Barton has served on the board of directors of Netflix, Inc. since 2002 and has served as Non-Executive Chairman of Glassdoor.com since January 2008 and Trover since March 2010. Mr. Barton also served on the board of directors of Expedia, Inc. from 1999 to 2003. Mr. Barton served on the board of directors of Ticketmaster from December 2001 to August 2002.

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PROPOSAL 1—THE ELECTION OF DIRECTORS

    Board Membership Qualifications:  Mr. Barton brings to our board a broad range of relevant leadership and technical skills resulting from his roles as a founder and former chief executive officer of companies in the mobile and Internet industries. Mr. Barton also provides experience in launching and promoting new technologies and marketing internet-based products to consumers.

Michael A. George

    Age:  56

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

    Professional Background:  Mr. George has served as Chief Executive Officer and President of our company since March 2018 and as a director of our company since September 2011. He has served as the President of QVC, Inc. (QVC), a subsidiary of our company, 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. (Dell) from March 2001 to November 2005, most notably as the chief marketing officer and general manager of Dell'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 & Company, Inc. His background and executive experience assist the board in evaluating strategic opportunities in the e-commerce and retail industries.

Gregory B. Maffei

    Age:  57

    Chairman of the Board and a director of our company.

    Professional Background:  Mr. Maffei has served as Chairman of the Board of our company since March 2018 and as a director of our company since November 2005. He has also served as our company's President and Chief Executive Officer from February 2006 to March 2018 and 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, Liberty TripAdvisor Holdings, Inc. (Liberty TripAdvisor) since July 2013, Liberty Broadband Corporation (Liberty Broadband) since June 2014 and GCI Liberty since March 2018. Prior thereto, Mr. Maffei served as President and Chief Financial Officer of Oracle Corporation, Chairman, President and Chief Executive Officer of 360networks Corporation (360networks), and Chief Financial Officer of Microsoft.

    Other Public Company Directorships:  Mr. Maffei has served as (i) a director of Liberty Media Corporation (including its predecessor) since May 2007, (ii) a director of Liberty TripAdvisor since July 2013 and as its Chairman of the Board since June 2015, (iii) a director of Liberty Broadband since June 2014 and (iv) a director of GCI Liberty since March 2018. He has served as (i) the Chairman of the Board of Sirius XM Holdings Inc. (Sirius XM) since April 2013 and as a director since March 2009, (ii) the Chairman of the Board of Live Nation Entertainment, Inc. (Live Nation) since March 2013 and as a director since February 2011, (iii) the Chairman of the Board of TripAdvisor, Inc. since February 2013, (iv) a director of Charter Communications, Inc. (Charter) since May 2013, (v) a director of Zillow Group since February 2015, having previously served as a director of its predecessor, Zillow, Inc., from May 2005 to February 2015 and (vi) the Chairman of the Board of Pandora Media, Inc. since September 2017. Mr. Maffei served as (i) Chairman of the Board of Starz from January 2013 until its acquisition by Lions Gate Entertainment Corp. in December 2016, (ii) a director of Barnes & Noble, Inc. from September 2011 to April 2014, (iii) a director of Electronic Arts, Inc. from June 2003 to July 2013 and (iv) a director of DIRECTV and its predecessors from February 2008 to June 2010.

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    Board Membership Qualifications:  Mr. Maffei brings to our board significant financial and operational experience based on his current senior policy making positions at our company, Liberty Media Corporation, GCI Liberty, Liberty TripAdvisor, and Liberty Broadband and his previous executive positions at Oracle Corporation, 360networks and Microsoft. In addition, Mr. Maffei has extensive public company board experience. He provides our board with an executive leadership perspective on the strategic planning for, and operations and management of, large public companies and risk management principles.

Directors Whose Term Expires in 2019

John C. Malone

    Age:  77

    A director of our company.

    Professional Background:  Mr. Malone has served as a director of our company, including its predecessors, since its inception in 1994, and served as our company's Chairman of the Board from its inception in 1994 to March 2018 and Chief Executive Officer from August 2005 to February 2006. Mr. Malone served as Chairman of the Board of 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 (i) Chairman of the Board of Liberty Media Corporation (including its predecessor) since August 2011 and as a director since December 2010, (ii) the Chairman of the Board of Liberty Broadband since November 2014, (iii) the Chairman of the Board of Liberty Global plc (LGP) since June 2013, having previously served as Chairman of the Board of Liberty Global, Inc. (LGI), LGP's predecessor, from June 2005 to June 2013, Chairman of the Board of LGI's predecessor, Liberty Media International, Inc. (LMI) from March 2004 to June 2005 and a director of UnitedGlobalCom, Inc., now a subsidiary of LGP, from January 2002 to June 2005, (iv) a director of Discovery Inc., which was formerly known as Discovery Communications, Inc. (Discovery Communications), since September 2008 and a director of Discovery Communications' predecessor, Discovery Holding Company, from May 2005 to September 2008 and as Chairman of the Board from March 2005 to September 2008, (v) a director of Charter since May 2013, (vi) a director of Lions Gate Entertainment Corp. since March 2015, (vii) Chairman of the Board of Liberty Expedia Holdings, Inc. (Liberty Expedia) since November 2016, (viii) a director of Liberty Latin America Ltd. since December 2017 and (ix) Chairman of the Board of GCI Liberty since March 2018. Previously, he served as (i) a director of Expedia, Inc. from December 2012 to December 2017, having previously served as a director from August 2005 to November 2012, (ii) the Chairman of the Board of Liberty TripAdvisor from August 2014 to June 2015, (iii) a director of Sirius XM from April 2009 to May 2013, (iv) a director of Ascent Capital Group, Inc. from January 2010 to September 2012, (v) a director of Live Nation from January 2010 to February 2011, (vi) Chairman of the Board of DIRECTV and its predecessors from February 2008 to June 2010 and (vii) a director of IAC/InterActiveCorp from May 2006 to June 2010.

    Board Membership Qualifications:  Mr. Malone, as President of TCI, co-founded our 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:  68

    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.

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PROPOSAL 1—THE ELECTION OF DIRECTORS

    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.

Mark C. Vadon

    Age:  48

    A director of our company.

    Professional Background:  Mr. Vadon has served as a director of our company since October 2015. Mr. Vadon co-founded zulily, inc. (zulily) and previously served as Chairman of zulily's board of directors from October 2009 until October 2015 when we completed the acquisition of zulily. In addition, Mr. Vadon served as Chairman of the Board of chewy.com, an internet retailer of pet food, from August 2014 to May 2017. Since 2013, Mr. Vadon also has served as a board member of the Vadon Foundation.

    Other Public Company Directorships:  Mr. Vadon has served on the board of directors of The Home Depot, Inc. since August 2012. From May 1999 to February 2008, Mr. Vadon was Chief Executive Officer of Blue Nile, Inc., which he founded in 1999 and also served as its Chairman of the board of directors from May 1999 to December 2013.

    Board Membership Qualifications:  Mr. Vadon brings extensive experience and in-depth knowledge of commerce, retail and technology businesses to our board based on his prior public company experience in senior policy-making positions at zulily and at Blue Nile, Inc. as its Chief Executive Officer. His background and executive experience assist the board in evaluating strategic opportunities in the e-commerce and retail industries.

Andrea L. Wong

    Age:  51

    A director of our company.

    Professional Background:  Ms. Wong has served as a director of our company since April 2010. Ms. Wong served as President, International Production for Sony Pictures Television and President, International for Sony Pictures Entertainment from September 2011 to March 2017. She previously served as President and Chief Executive Officer 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, as a director of Hudson's Bay Company since September 2014, as a director of Hudson Pacific Properties, Inc. since August 2017 and as a director of Social Capital Hedosophia Holdings Corp. since September 2017.

    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 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.

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Directors Whose Term Expires in 2020

Fiona P. Dias

    Age:  52

    A director of our company.

    Professional Background:  Ms. Dias has served as a director of our company since December 2017. She has served as Principal Digital Partner at Ryan Retail Consulting, LLC, a global consulting firm, since January 2015. She also served as Chief Strategy Officer of ShopRunner, an online shopping service, from August 2011 to October 2014 and as Executive Vice President, Strategy & Marketing, of GSI Commerce, Inc., a provider of digital commerce solutions, from February 2007 to June 2011. Prior thereto, she was Executive Vice President and Chief Marketing Officer of Circuit City Stores, Inc., a specialty retailer of consumer electronics, and also held senior marketing positions with PepsiCo, Pennzoil-Quaker State Company and The Procter & Gamble Company.

    Other Public Company Directorships:  Ms. Dias has served on the boards of directors of Advance Auto Parts, Inc., a specialty retailer, since September 2009 and Realogy Holdings Corp., a real estate brokerage company, since June 2013. She previously served on the board of directors of HSN, Inc. from July 2016 to December 2017 and as a director for Choice Hotels from November 2004 to April 2012.

    Board Membership Qualifications:  In connection with the closing of the HSN, Inc. acquisition and pursuant to the terms of the merger agreement for the transaction, Ms. Dias was appointed to our board. Ms. Dias brings to our board significant experience in senior policy-making roles both as a member of other public company boards and as a senior marketing executive. She also brings extensive experience in digital commerce, marketing and managing consumer and retail brands.

Evan D. Malone

    Age:  47

    A director of our company.

    Professional Background:  Dr. Malone has served as a director of our company since August 2008. Since June 2009, he has served as President of NextFab Studio, LLC, which provides manufacturing-related technical training, product development, and business acceleration services. Since January 2008, Dr. Malone has served as the owner and manager of a real estate property and management company, 1525 South Street LLC. 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 founding member of Jet Wine Bar, a wine bar, and Rex 1516, a restaurant, both in Philadelphia. Since November 2016, he has served as director and president of the NextFab Foundation, an IRS 501(c)(3) private operating foundation, which provides manufacturing-related technology and education to communities affected by economic or humanitarian distress.

    Other Public Company Directorships:  Dr. Malone has served as a director of Liberty Media Corporation (including its predecessor) since September 2011 and Sirius XM since May 2013.

    Board Membership Qualifications:  Dr. Malone 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.

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PROPOSAL 1—THE ELECTION OF DIRECTORS

David E. Rapley

    Age:  76

    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 Chief Executive Officer 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 served as the President and Chief Executive Officer of Rapley Consulting, Inc. from January 2000 to December 2014. From 2003 to 2013, Mr. Rapley was a director of Merrick & Co., a private firm providing engineering and other services to domestic and international clients. From 2008 to 2011, Mr. Rapley was chairman of the board of Merrick Canada ULC.

    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 LGP since June 2013, having previously served as a director of LGI, LGP's predecessor, from June 2005 to June 2013 and as a director of LGI's 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 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:  78

    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 and as a director of Liberty TripAdvisor since August 2014. He has served as a director of LGP since June 2013, having previously served as a director of LGI, LGP's predecessor, from June 2005 to June 2013 and as a director of LMI, LGI's predecessor, from May 2004 to June 2005. Mr. Romrell has served as a director of Liberty TripAdvisor since August 2014.

    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.

VOTE AND RECOMMENDATION

A plurality of the combined voting power of the outstanding shares of our common stock present in person or represented by proxy at the annual meeting and entitled to vote on the election of directors at the annual meeting, voting together as a single class, is required to elect each of Messrs. Barton, George and Maffei as a Class II member of our board of directors.

   
GRAPHIC
  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 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, 2018.

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, 2018.

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

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 2017 and 2016 and fees billed for other services rendered by KPMG LLP:

 
  2017
  2016
 

Audit fees

  $ 7,334,000     6,834,000  

Audit related fees(1)

  1,456,000   1,485,000  

Audit and audit related fees

    8,790,000     8,319,000  

Tax fees(2)

  1,489,000   1,463,000  
   

Total fees

  $ 10,279,000     9,782,000  

             
(1)
Audit related fees consist of professional consultations and audits in connection with acquisitions, carve-out audits in connection with divestitures, due diligence related to potential business combinations and audits of financial statements of certain employee benefit 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;

    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

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PROPOSAL 2—THE AUDITORS RATIFICATION PROPOSAL

      to dispositions, and (vii) general assistance with implementation of the requirements of certain Securities and Exchange Commission (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, in the reasonable judgment of Qurate's Chief Financial Officer or Senior Vice President and Controller, an individual project involving the provision of pre-approved services is likely to result in fees in excess of $100,000, or if individual projects under $100,000 are likely to equal or exceed $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. Ian G. Gilchrist 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 2017 were approved in accordance with the terms of the policy in place.

VOTE AND RECOMMENDATION

The affirmative vote of a majority of the combined 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.

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

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PROPOSAL 3—THE RESTATED CHARTER PROPOSAL

In connection with the consummation of the Transactions, on April 5, 2018, our board of directors adopted a resolution approving and declaring advisable the restated certificate of incorporation of our company (the restated charter), which amends and restates the current charter to (i) eliminate the tracking stock capitalization structure of our company, (ii) reclassify each share of each series of our existing QVC Group Common Stock into one share of the corresponding series of our New Common Stock (the reclassification), and (iii) make certain conforming and clarifying changes in connection with the foregoing.

Our board of directors recommends that our stockholders approve the adoption of the restated charter. If our stockholders approve the adoption of the restated charter, the restated charter will become effective upon the filing of the restated charter with the Delaware Secretary of State. The full text of the form of restated charter is included as Annex A to this proxy statement.

The restated charter and the reclassification will eliminate the tracking stock capitalization structure currently in effect for our company. Under the restated charter, the rights, powers, and privileges of the New Common Stock are substantially similar to the QVC Group Common Stock, except to the extent they relate to the tracking stock capitalization structure in the current charter.

Under the Delaware General Corporation Law (DGCL), the holders of QVC Group Common Stock will not have appraisal rights in connection with the adoption of the restated charter and the reclassification.

DESCRIPTION OF NEW COMMON STOCK

The following information describes certain rights, powers, and privileges of the New Common Stock.

Authorized Capital Stock

The authorized capital stock will be 8,200,000,000 shares, of which 8,150,000,000 shares will be designated Common Stock, par value $0.01 per share, and 50,000,000 shares will be designated Preferred Stock, par value $0.01 per share. The Common Stock will be divided into three series. We will have 4,000,000,000 shares of Series A Common Stock, 150,000,000 shares of Series B Common Stock, and 4,000,000,000 shares of Series C Common Stock authorized.

New Common Stock

The holders of our Series A Common Stock, Series B Common Stock and Series C Common Stock will have equal rights, powers, and privileges, except as otherwise set forth in the restated charter and as generally described below.

Voting Rights

The holders of our Series A Common Stock will be entitled to one vote for each share held, and the holders of our Series B Common Stock will be entitled to ten votes for each share held, on all matters voted on by our stockholders, including elections of directors. The holders of our Series C Common Stock will not be entitled to any voting powers, except as required by Delaware law. When the vote or consent of holders of our Series C Common Stock is required by Delaware law, the holders of our Series C Common Stock will be entitled to 1/100th of a vote for each share held. The restated charter does not provide for cumulative voting in the election of directors.

Dividends

Subject to any preferential rights of any outstanding series of our Preferred Stock created by our board of directors from time to time, the holders of our New Common Stock will be entitled to such dividends as may be declared from time to time by our board of directors from funds available therefor. Except as otherwise described under "—Distributions," whenever a dividend is paid to the holders of one of our series of New Common Stock, we will also pay to the holders of the other series of our New Common Stock an equal per share dividend. For a more complete discussion of our dividend policy, please see "—Dividend Policy."

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PROPOSAL 3—THE RESTATED CHARTER PROPOSAL

Conversion

Each share of our Series B Common Stock will be convertible, at the option of the holder, into one share of our Series A Common Stock. Our Series A Common Stock and Series C Common Stock will not be convertible into shares of any other series of our New Common Stock.

Distributions

Distributions made in shares of our Series A Common Stock, our Series B Common Stock, our Series C Common Stock or any other security with respect to our Series A Common Stock, our Series B Common Stock or our Series C Common Stock may be declared and paid only as follows:

    a share distribution (1) consisting of shares of our Series C Common Stock (or securities convertible therefor) to holders of our Series A Common Stock, Series B Common Stock and Series C Common Stock, on an equal per share basis; or (2) consisting of (x) shares of our Series A Common Stock (or securities convertible therefor other than, for the avoidance of doubt, shares of our Series B Common Stock) to holders of our Series A Common Stock, on an equal per share basis, (y) shares of our Series B Common Stock (or securities convertible therefor) to holders of our Series B Common Stock, on an equal per share basis, and (z) shares of our Series C Common Stock (or securities convertible therefor) to holders of our Series C Common Stock, on an equal per share basis; or

    a share distribution consisting of any class or series of securities of our company or any other person, other than our Series A Common Stock, Series B Common Stock or Series C Common Stock (or securities convertible therefor) on the basis of a distribution of (1) identical securities, on an equal per share basis, to holders of our Series A Common Stock, Series B Common Stock and Series C Common Stock; or (2) separate classes or series of securities, on an equal per share basis, to holders of each such shares of our New Common Stock; or (3) a separate class or series of securities to the holders of one or more series of our New Common Stock and, on an equal per share basis, a different class or series of securities to the holders of all other series of our New Common Stock, provided that, in the case of (2) or (3) above, the securities so distributed do not differ in any respect other than their relative voting rights and related differences in designation, conversion and share distribution provisions, with the holders of shares of Series B Common Stock receiving securities of the class or series having the highest relative voting rights and the holders of shares of each other series of our New Common Stock receiving securities of a class or series having lesser relative voting rights, and provided further that, if different classes or series of securities are being distributed to holders of our Series A Common Stock and Series C Common Stock, then such securities shall be distributed either as determined by our board of directors or such that the relative voting rights of the securities of the class or series of securities to be received by the holders of our Series A Common Stock and Series C Common Stock correspond, to the extent practicable, to the relative voting rights of each such series of our New Common Stock.

Reclassification

We may not reclassify, subdivide, or combine any series of our New Common Stock then outstanding without reclassifying, subdividing, or combining the other series of our New Common Stock then outstanding, on an equal per share basis.

Liquidation and Dissolution

In the event of our liquidation, dissolution, or winding up, after payment or provision for payment of our debts and liabilities and subject to the prior payment in full of any preferential or other amounts to which holders of our Preferred Stock may be entitled, the holders of our Series A Common Stock, Series B Common Stock and Series C Common Stock will share equally, on a share for share basis, in our assets remaining for distribution to the holders of our New Common Stock.

Dividend Policy

There will be no change to our dividend policy as a result of the adoption of the restated charter. We presently intend to retain future earnings, if any, to finance the expansion of our business. Therefore, we do not expect

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to pay any cash dividends in the foreseeable future. All decisions regarding the payment of dividends by our company will be made by our board of directors, from time to time, in accordance with applicable law after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, plans for expansion and possible loan covenants which may restrict or prohibit our payment of dividends.

Transfer Agent and Registrar

Computershare Trust Company, N.A. will be the transfer agent and registrar for our New Common Stock:

Computershare Trust Company, N.A.
250 Royall Street
Canton, MA 02021

COMPARISON OF QVC GROUP COMMON STOCK AND NEW COMMON STOCK

If the restated charter is adopted, filed, and becomes effective, holders of shares of QVC Group Common Stock will have their shares reclassified and converted into newly authorized shares of New Common Stock. There are no shares of QRTEK or Liberty Ventures Common Stock outstanding and there will be no shares of QRTEK or Liberty Ventures Common Stock outstanding immediately prior to the effectiveness of the restated charter. The rights of the holders of shares of QVC Group Common Stock are currently governed by the DGCL, the current charter, and the bylaws. Upon the effectiveness of the restated charter and the completion of the reclassification, the rights of the shares of New Common Stock will be governed by the DGCL, the restated charter, and the bylaws.

The restated charter and the reclassification will eliminate the tracking stock capitalization structure currently in effect for our company. The rights, powers, and privileges of the New Common Stock are substantially similar to the QVC Group Common Stock, except to the extent they relate to the tracking stock capitalization structure in the current charter.

The following is a summary of certain material differences between the rights of holders of shares of QVC Group Common Stock and the rights of holders of shares of New Common Stock, but does not purport to be a complete description of those differences or a complete description of the terms of the shares of New Common Stock. The following summary is qualified in its entirety by reference to the relevant provisions of each of the (i) DGCL, (ii) current charter, (iii) restated charter, and (iv) bylaws.

This section does not include a complete description of all differences between the rights of holders of shares of QVC Group Common Stock and the rights of holders of shares of New Common Stock, nor does it include a complete description of the specific rights of such holders. Furthermore, the identification of some of the differences in the rights of such holders as material is not intended to indicate that other differences that may be equally important do not exist. You are urged to read carefully the relevant provisions of the DGCL and the restated charter.

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PROPOSAL 3—THE RESTATED CHARTER PROPOSAL

 
 
   
   
  Rights of Holders of QVC Group
Common Stock

   
  Rights of Holders of New Common Stock
    

   
 
    Authorized Capital Stock       Our company is authorized to issue up to 9,015,000,000 shares of capital stock of which (i) 8,965,000,000 shares are shares designated as Common Stock divided into 400,000,000 shares of LVNTA, 15,000,000 shares of LVNTB, 400,000,000 shares of Series C Liberty Ventures Common Stock, $0.01 par value (LVNTK), 4,000,000,000 shares of QRTEA, 150,000,000 shares QRTEB, and 4,000,000,000 shares of QRTEK, and (ii) 50,000,000 shares are shares designated as Preferred Stock.       Our company will be authorized to issue up to 8,200,000,000 shares of capital stock of which (i) 8,150,000,000 shares will be shares designated as Common Stock divided into 4,000,000,000 shares of Series A Common Stock, 150,000,000 shares of Series B Common Stock, and 4,000,000,000 shares of Series C Common Stock (collectively, New Common Stock), and (ii) 50,000,000 shares will be shares designated as Preferred Stock.    
    Voting Rights       Holders of shares of QRTEA are entitled to one vote for each share of such stock held and holders of shares of QRTEB are entitled to ten votes for each share of such stock held on all matters submitted to a vote of stockholders.

Holders of shares of QRTEK are not entitled to any voting powers (including with respect to any class votes taken in accordance with the terms of the current charter), except as otherwise required by Delaware law.

When so required, holders of shares of QRTEK will be entitled to 1/100th of a vote for each share of such stock held.

Holders of shares of QVC Group Common Stock will vote as one class with holders of shares of Liberty Ventures Common Stock on all matters that are submitted to a vote of stockholders unless a separate class vote is required by the terms of the current charter or the DGCL.

In connection with certain dispositions of QVC Group assets, our board of directors may determine to seek approval of the holders of shares of QVC Group Common Stock, voting together as a separate class, to avoid effecting a mandatory dividend, redemption or conversion under the current charter.

Our company may not redeem outstanding shares of QVC Group Common Stock for shares of common stock of a subsidiary that holds assets and liabilities attributed to the QVC Group unless our board of directors seeks and receives the approval to such redemption of holders of shares of QVC Group Common Stock, voting together as a separate class, and, if such subsidiary also holds assets and liabilities of the Ventures Group, the approval of the holders of shares of Liberty Ventures Common Stock to the corresponding Liberty Ventures Common Stock redemption, with each affected group voting as a separate class.

      Holders of shares of Series A Common Stock will be entitled to one vote for each share of such stock held and holders of shares of Series B Common Stock will be entitled to ten votes for each share of such stock held on all matters submitted to a vote of stockholders.

Holders of shares of Series C Common Stock are not entitled to any voting powers (including with respect to any class votes taken in accordance with the terms of the restated charter), except as otherwise required by Delaware law.

When so required, holders of shares of Series C Common Stock will be entitled to 1/100th of a vote for each share of such stock held.

Holders of shares of Series A Common Stock and Series B Common Stock will vote as one class on all matters that are submitted to a vote of stockholders unless a separate class vote is required by the terms of the restated charter or the DGCL.

In the event the holders of Series C Common Stock are entitled to vote on any matter that may be submitted to a vote of stockholders, such holders will vote as one class with all other stockholders entitled to vote on such matter, unless otherwise required by the restated charter or Delaware law.

   

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  Rights of Holders of QVC Group
Common Stock

   
  Rights of Holders of New Common Stock
    

   
 
    Merger Approval       With limited exception, in addition to any other required approval under the DGCL or the current charter, the current charter requires approval of the holders of at least 662/3% of the total voting power of the then outstanding shares of capital stock entitled to vote in order for our company to take any action to authorize, among other things, the merger or consolidation of our company with or into any other corporation (unless at least 75% of the board of directors then in office have approved such transaction).

The current charter does not expressly provide that mergers pursuant to Section 251(h) of the DGCL are subject to the supermajority stockholder approval requirement.

      With limited exception, in addition to any other required approval under the DGCL or the restated charter, the restated charter requires approval of the holders of at least 662/3% of the total voting power of the then outstanding shares of capital stock entitled to vote in order for our company to take any action to authorize, among other things, the merger or consolidation of our company with or into any other corporation (unless at least 75% of the board of directors then in office have approved such transaction).

The restated charter expressly provides that mergers pursuant to Section 251(h) of the DGCL are subject to the supermajority stockholder approval requirement to the extent at least 75% of the members of our board of directors do not approve such merger.

   
    Conversion at Option of Holder       Each share of QRTEB is convertible, at the option of the holder, into one share of QRTEA.

Shares of QRTEA and QRTEK are not convertible at the option of the holder.

      Each share of Series B Common Stock is convertible, at the option of the holder, into one share of Series A Common Stock.

Shares of Series A Common Stock and Series C Common Stock are not convertible at the option of the holder.

   
    Conversion at Option of Issuer       Our company can convert each share of QRTEA, QRTEB and QRTEK into a number of shares of the corresponding series of Liberty Ventures Common Stock at a ratio based on the relative trading prices of QRTEA (or another series of QVC Group Common Stock subject to certain limitations) and the LVNTA (or another series of Liberty Ventures Common Stock subject to certain limitations) over a specified 20-trading day period.       None.    

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PROPOSAL 3—THE RESTATED CHARTER PROPOSAL

 
 
   
   
  Rights of Holders of QVC Group
Common Stock

   
  Rights of Holders of New Common Stock
    

   
 
    Dividends and Share Distributions       Our company is permitted to pay dividends on shares of QVC Group Common Stock out of the lesser of its assets legally available for the payment of dividends under Delaware law and the "QVC Group Available Dividend Amount" (defined generally as a fraction of the excess of the total assets less the total liabilities attributed to the QVC Group over the aggregate par value of, or any greater amount determined to be capital in respect of, all outstanding shares of QVC Group Common Stock or, if there is no such excess, an amount equal to the earnings or loss attributable to the QVC Group (if positive) for the fiscal year in which such dividend is to be paid and/or the preceding fiscal year). If dividends (other than share distributions) are paid on any series of QVC Group Common Stock, an equal per share dividend will be concurrently paid on the other series of QVC Group Common Stock.

Our company is permitted to make (i) share distributions of (A) shares of QRTEA or QRTEK to holders of shares of all series of QVC Group Common Stock, on an equal per share basis; and (B) shares of QRTEA to holders of shares of QRTEA and, on an equal per share basis, shares of QRTEB to holders of shares of QRTEB and, on an equal per share basis, shares of QRTEK to holders of shares of QRTEK; and (ii) share distributions of (A) LVNTA or LVNTK to holders of shares of all series of QVC Group Common Stock, on an equal per share basis, subject to certain limitations; and (B) shares of LVNTA to holders of shares of QRTEA and, on an equal per share basis, shares of LVNTB to holders of shares of QRTEB and, on an equal per share basis, shares of LVNTK to holders of shares of QRTEK, in each case, subject to certain limitations; and (iii) share distributions of shares of any other class or series of our company's securities or the securities of any other person to holders of shares of all series of QVC Group Common Stock, on an equal per share basis, subject to certain limitations.

      Subject to the rights of any series of Preferred Stock, the holders of New Common Stock will be entitled to such dividends as may be declared from time to time by our board of directors from assets legally available therefor.

Except for Share Distributions (described below), whenever a dividend is paid to the holders of one series of New Common Stock, an equal per share dividend must be paid to the holders of the other series of New Common Stock.

Distributions made in shares of Series A Common Stock, Series B Common Stock, Series C Common Stock or any other security with respect to such New Common Stock may be declared and paid only as follows:

a share distribution (1) consisting of shares of Series C Common Stock (or securities convertible therefor) to holders of Series A Common Stock, Series B Common Stock and Series C Common Stock, on an equal per share basis; or (2) consisting of (x) shares of Series A Common Stock (or securities convertible therefor other than, for the avoidance of doubt, shares of Series B Common Stock) to holders of Series A Common Stock, on an equal per share basis, (y) shares of Series B Common Stock (or securities convertible therefor) to holders of Series B Common Stock, on an equal per share basis, and (z) shares of Series C Common Stock (or securities convertible therefor) to holders of Series C Common Stock, on an equal per share basis; or

a share distribution consisting of any class or series of securities of our company or any other person, other than Series A Common Stock, Series B Common Stock or Series C Common Stock (or securities convertible therefor) on the basis of a distribution of (1) identical securities, on an equal per share basis, to holders of Series A Common Stock, Series B Common Stock, and Series C Common Stock; or (2) separate classes or series of securities, on an equal per share basis, to holders of each such shares of New Common Stock; or (3) a separate class or series of securities to the holders of one or more series of New Common Stock and, on an equal per share basis, a different class or series of securities to the holders of all other series of New Common Stock, provided that, in the case of (2) or (3) above, the securities so distributed do not differ in any respect other than their relative voting rights and related differences in designation, conversion and share distribution provisions, with the holders of shares of Series B Common Stock receiving securities of the class or series having the highest relative voting rights and the holders of shares of each other series of New Common Stock receiving securities of a class or series having lesser relative voting rights, and provided further that, if different classes or series of securities are being distributed to holders of Series A Common Stock and Series C Common Stock, then such securities shall be distributed either as determined by our board of directors or such that the relative voting rights of the securities of the class or series of securities to be received by the holders of Series A Common Stock and Series C Common Stock correspond, to the extent practicable, to the relative voting rights of each such series of New Common Stock.

   

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  Rights of Holders of QVC Group
Common Stock

   
  Rights of Holders of New Common Stock
    

   
 
    Reclassification       No series of QVC Group Common Stock may be reclassified, subdivided, or combined unless each other series of QVC Group Common Stock is reclassified, subdivided, or combined, as the case may be, on an equal per share basis.       No series of New Common Stock then outstanding may be reclassified, subdivided, or combined unless each other series of New Common Stock then outstanding is reclassified, subdivided, or combined, as the case may be, on an equal per share basis.    
    Optional Redemption for Stock of Subsidiary       Our company may redeem outstanding shares of QVC Group Common Stock for shares of common stock of a subsidiary that holds assets and liabilities attributed to the QVC Group (and may or may not hold assets and liabilities attributed to the Ventures Group), provided that our board of directors seeks and receives the approval of the holders of shares of QVC Group Common Stock, voting together as a separate class.

If our company were to effect a redemption as described above with stock of a subsidiary that also holds assets and liabilities of the Ventures Group, shares of Liberty Ventures Common Stock would also be redeemed in exchange for shares of that subsidiary, and the entire redemption would be subject to the voting rights of the holders of shares of QVC Group Common Stock described above as well as the separate class vote of the holders of shares of Liberty Ventures Common Stock.

      None.    

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PROPOSAL 3—THE RESTATED CHARTER PROPOSAL

 
 
   
   
  Rights of Holders of QVC Group
Common Stock

   
  Rights of Holders of New Common Stock
    

   
 
    Mandatory Dividend, Redemption, and Conversion Rights in Case of Certain Dispositions of Assets       If our company disposes, in one transaction or a series of transactions, of all or substantially all of the assets attributed to the QVC Group, it is required to choose one of the following four alternatives, unless our board of directors obtains the approval of the holders of shares of QVC Group Common Stock to not take such action or the disposition qualifies under a specified exemption (in which case our company will not be required to take any of the following actions):

pay a dividend to holders of shares of QVC Group Common Stock out of the available net proceeds of such disposition; or

if there are legally sufficient assets and the "QVC Group Available Dividend Amount" would have been sufficient to pay a dividend, then: (i) if the disposition involves all of the properties and assets attributed to the QVC Group, redeem all outstanding shares of QVC Group Common Stock in exchange for cash and/or securities or other assets with a fair value equal to the available net proceeds of such disposition, or (ii) if the disposition involves substantially all (but not all) of the properties and assets attributed to the QVC Group, redeem a portion of the outstanding shares of QVC Group Common Stock in exchange for cash and/or securities or other assets with a fair value equal to the available net proceeds of such disposition; or

convert each outstanding share of each series of QVC Group Common Stock into a number of shares of the corresponding series of Liberty Ventures Common Stock at a specified premium; or

combine a conversion of a portion of the outstanding shares of QVC Group Common Stock into a number of shares of the corresponding series of Liberty Ventures Common Stock with either the payment of a dividend on or a redemption of shares of QVC Group Common Stock, subject to certain limitations.

      None.    

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  Rights of Holders of QVC Group
Common Stock

   
  Rights of Holders of New Common Stock
    

   
 
    Inter-Group Interest       From time to time, our board of directors may determine to create an inter-group interest in the Ventures Group in favor of the QVC Group, or vice versa, subject to the terms of the current charter.

If the Ventures Group has an inter-group interest in the QVC Group at such time as any extraordinary action is taken with respect to the QVC Group Common Stock (such as the payment of a dividend, a share distribution, the redemption of such stock for stock of a subsidiary or an action required to be taken in connection with a disposition of all or substantially all of the assets attributed to the QVC Group), our board of directors will consider what actions are required, or permitted, to be taken under the current charter with respect to the Ventures Group's inter-group interest in the QVC Group. For example, in some instances, our board of directors may determine that a portion of the aggregate consideration that is available for distribution to holders of shares of QVC Group Common Stock must be allocated to the Ventures Group to compensate the Ventures Group on a pro rata basis for its interest in the QVC Group.

Similarly, if the QVC Group has an inter-group interest in the Ventures Group at such time as any extraordinary action is taken with respect to the Ventures Group common stock (such as the payment of a dividend, a share distribution, the redemption of such stock for stock of a subsidiary or an action required to be taken in connection with a disposition of all or substantially all of the Ventures Group's assets), our board of directors will consider what actions are required, or permitted, to be taken under the current charter with respect to the QVC Group's inter-group interest in the Ventures Group.

All such determinations by our board of directors are made in accordance with the current charter and Delaware law.

      None.    

VOTE AND RECOMMENDATION

Approval of the restated charter proposal requires the affirmative vote of a majority of the combined voting power of the shares of our common stock outstanding on the record date, voting together as a single class.

   
GRAPHIC
  Our board of directors unanimously recommends a vote "FOR" the restated charter proposal.    

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MANAGEMENT AND GOVERNANCE MATTERS

EXECUTIVE OFFICERS

The following lists the executive officers of our company (other than Michael A. George, our President and Chief Executive Officer, and Gregory B. Maffei, our Chairman of the Board, each of whom 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: 61
  Mr. Baer has served as Chief Legal Officer of our company, Liberty Media Corporation, Liberty TripAdvisor and Liberty Broadband since January 2016, Liberty Expedia since March 2016 and of GCI Liberty since March 2018. He previously served as Senior Vice President and General Counsel of our company and Liberty Media Corporation from January 2013 to December 2015, Liberty TripAdvisor from July 2013 to December 2015 and Liberty Broadband from June 2014 to December 2015. Previously, Mr. Baer served as Executive Vice President and Chief Legal Officer of UnitedHealth Group Incorporated from May 2011 to December 2012. He served as 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: 58

 

Mr. Rosenthaler has served as Chief Corporate Development Officer of our company, Liberty Media Corporation, Liberty TripAdvisor, Liberty Broadband and Liberty Expedia since October 2016 and of GCI Liberty since March 2018. He previously served as Chief Tax Officer of our company, Liberty Media Corporation, Liberty TripAdvisor and Liberty Broadband from January 2016 to September 2016 and Liberty Expedia from March 2016 to September 2016. He previously served as a Senior Vice President of our company from April 2002 to December 2015, Liberty Media Corporation (including its predecessor) from May 2007 to December 2015, Liberty TripAdvisor from July 2013 to December 2015 and Liberty Broadband from June 2014 to December 2015.

Mark D. Carleton
Age: 57

 

Mr. Carleton has served as Chief Financial Officer of our company, Liberty Media Corporation and Liberty Broadband since October 2016. He has also served as Chief Financial Officer and Treasurer of GCI Liberty since March 2018. He previously served as Chief Development Officer of our company, Liberty Media Corporation, Liberty Broadband and Liberty TripAdvisor from January 2016 to September 2016, as a Senior Vice President of our company from November 2014 to December 2015, of Liberty Media Corporation from January 2013 to December 2015, of Liberty Broadband from October 2014 to December 2015, and as a Senior Vice President of predecessors of Liberty Media Corporation from December 2003 to January 2013. Prior to that time, Mr. Carleton served as a partner at KPMG LLP.

Our executive officers will serve in such capacities 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 our directors and executive officers has had any involvement in such legal proceedings as would be material to an evaluation of his or her ability or integrity.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (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 and written representations made to us by our executive officers and directors, we believe that, during the year ended December 31, 2017, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten-percent beneficial owners were met, with the exception of one transaction by Gregory B. Maffei that was reported on a Form 4 on an untimely basis.

CODE OF ETHICS

We have adopted a code of business conduct and 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 business conduct and ethics is available on our website at www.qurateretail.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 Nasdaq's corporate governance rules on the criteria for director independence.

Our board of directors has determined that each of Richard N. Barton, Fiona P. Dias, M. Ian G. Gilchrist, David E. Rapley, M. LaVoy Robison, Larry E. Romrell, Mark C. Vadon 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). Gregory B. Maffei holds the position of Chairman of the Board, leads our board and board meetings and provides strategic guidance to our Chief Executive Officer. Michael A. George, 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 oversees the management of risks relating to our compensation arrangements with senior officers. Our nominating and corporate governance committee

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oversees 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 also include input from our Internal Audit group.

COMMITTEES OF THE BOARD OF DIRECTORS

Executive Committee

Our board of directors has established an executive committee, whose members are John C. Malone, Gregory B. Maffei and Michael A. George. 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 Larry E. Romrell and whose other members are Mark C. Vadon 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 our Chief Executive Officer, Chief Legal Officer, Chief Financial Officer and Chief Corporate Development Officer, and oversees the compensation of the chief executive officers of our operating subsidiaries. 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." A subcommittee, whose members are Larry E. Romrell and Andrea L. Wong, was formed in 2017 to review compensation matters for purposes of Section 16 of the Exchange Act and Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code).

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

Larry E. Romrell
Mark C. Vadon
Andrea L. Wong

Compensation Committee Interlocks and Insider Participation

No member of our compensation committee during 2017 is or has been an officer or employee of our company. In April 2017, our audit committee approved a transaction between zulily and chewy.com. Mr. Vadon was previously executive chairman of the board of chewy.com. For additional information regarding this 2017 related party transaction, see "Certain Relationships and Related Transactions."

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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 Richard N. Barton and Mark C. Vadon. 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.

The nominating and corporate governance committee will consider candidates for director recommended by any stockholder provided that such recommendations 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, Qurate Retail, Inc., 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(s), if different, and any other person(s) (including their names) under which the proposing stockholder is making the nomination and any affiliates or associates (as defined in Rule 12b-2 of the Exchange Act) of such proposing stockholder(s) or beneficial owner (each a Proposing Person);

    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 Person 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 by each Proposing Person who is a holder of record of our common stock as to whether the notice is being given on behalf of the holder of record and/or one or more beneficial owners, the number of shares held by any beneficial owner along with evidence of such beneficial ownership and that such holder of record is 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 written 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 Person 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 Person, 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

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      of share price changes for, or increase or decrease the voting power of, the Proposing Person, 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 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 important 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. Barton, George and Maffei, who are nominated for election at the annual meeting, continue to be qualified to serve as directors of our company and such nominations were 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.qurateretail.com.

Audit Committee

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

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Our board of directors has determined that Mr. Robison and Mr. Gilchrist are our company's "audit committee financial experts" 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.qurateretail.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 Nasdaq. Each member of the audit committee also satisfies the SEC's independence requirements for members of audit committees. Our board of directors has determined that Mr. Robison and Mr. Gilchrist are "audit committee financial experts" 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 Public Company Accounting Oversight Board Auditing Standard No. 1301, Communications with Audit Committees, 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

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on Form 10-K for the year ended December 31, 2017 (the 2017 Form 10-K), which was filed on March 1, 2018 with the SEC.

Submitted by the Members of the Audit Committee

M. Ian G. Gilchrist
David E. Rapley
M. LaVoy Robison
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 2017, there were eight meetings of our full board of directors, no meetings of our executive committee, nine meetings of our compensation committee, two meetings of our nominating and corporate governance committee and six 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. Eight of the 11 directors then serving attended our 2017 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 Qurate Retail, Inc., 12300 Liberty Boulevard, Englewood, Colorado 80112. All such communications from stockholders will be forwarded to our directors on a timely basis.

EXECUTIVE SESSIONS

In 2017, the independent directors of our company, then serving, met at three 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 Qurate Retail, Inc., c/o Qurate Retail, Inc., 12300 Liberty Boulevard, Englewood, Colorado 80112. The current independent directors of our company are Richard N. Barton, Fiona P. Dias, M. Ian G. Gilchrist, David E. Rapley, M. LaVoy Robison, Larry E. Romrell, Mark C. Vadon 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;

    Mark D. Carleton, our Chief Financial Officer; and

    Michael A. George, Richard N. Baer and Albert E. Rosenthaler, our other three most highly compensated executive officers at the end of 2017.

This section does not give effect to the completion of the Transactions, including the redemption of shares of LVNTA and LVNTB in connection with the Split-Off, on March 9, 2018 or any adjustments to the named executive officers' awards of stock options, restricted stock or restricted stock units in connection with the Transactions. In addition, references to our Chief Executive Officer in this section refer to Mr. Maffei, who served as President and Chief Executive Officer of our company until March 9, 2018. As noted below in "—Compensation Discussion and Analysis—Changes for 2018," Mr. Maffei became executive Chairman of the Board on March 9, 2018, and Mr. George became President and Chief Executive Officer of our company on the same date.

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Overview

Our 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 our executives to increase long-term stockholder value. To that end, the compensation packages provided to the named executive officers include significant performance-based bonuses and significant equity incentive awards, including equity awards that vest many years after initial grant.

Our 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. Our compensation committee does not engage in any regular benchmarking analysis; rather, it is familiar with the range of total compensation paid by other companies and periodically reviews survey information provided by Mercer (US) Inc. (Mercer) and others. Our compensation committee uses this range and survey data as a guide to ensure that the named executive officers receive attractive compensation packages. Our compensation committee believes that our compensation packages should assist our company in attracting and retaining key executives critical to our long-term success.

Our feedback from stockholders on this pay philosophy has been positive. At our 2017 annual stockholder meeting, stockholders representing 88.8% of the aggregate voting power of Liberty Interactive present and entitled to vote on our say-on-pay proposal voted in favor of, on an advisory basis, our executive compensation disclosed in our proxy statement for the 2017 annual meeting of stockholders. No material changes were implemented to our executive compensation program as a result of this vote. At our 2017 annual stockholder meeting, stockholders elected to hold a say-on-pay vote every three years and our board of directors adopted this as the frequency at which future say-on-pay votes would be held.

Services Agreement

In September 2011, we completed the split-off (the LMC Split-Off) of our former subsidiary then-known as Liberty Media Corporation (currently known as Starz Acquisition, LLC, 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). In connection with the LMC Split-Off, we entered into a services agreement with Old LMC, which was assumed by Liberty Media in the LMC Spin-Off (the services agreement). Pursuant to the services agreement, in 2017, we reimbursed Liberty Media for the portion of the base salary and certain other

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compensation Liberty Media paid to our employees that was allocable to us for time spent by each such employee related to our company. We do not reimburse Liberty Media for time spent by Mr. Maffei on Qurate matters. Rather, we pay Mr. Maffei directly pursuant to his employment agreement with our company. All of Mr. George's compensation was paid by QVC, and none of his time was allocated to Liberty Media because Mr. George did not provide any services to Liberty Media in 2017. The 2017 performance-based bonuses earned by the named executive officers of our company were paid directly by our company. During 2017, the estimate of the allocable percentages of time spent performing services for Liberty Media, on the one hand, and our company, on the other hand, were reviewed quarterly by our audit committee for appropriateness. 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) include the portion of the compensation allocable to our company and for which we reimbursed Liberty Media and do not include the portion of the compensation allocable to Liberty Media. During the year ended December 31, 2017, the weighted average percentage of each such named executive officer's time that was allocated to our company was: Mr. Baer—47%; Mr. Carleton—25%; and Mr. Rosenthaler—38%.

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 compensation, including salary, bonus, equity compensation, perquisites and other personal benefits, and weights equity compensation most heavily;

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

    the scope of the named executive officer's responsibilities;

    the competitive nature of the compensation packages offered based on general industry knowledge of the media, telecommunications and entertainment industries and periodic use of survey information provided by Mercer and others; and

    the performance of the group reporting to the named executive officer.

In addition, when setting compensation, our compensation committee considers the recommendations obtained from our Chief Executive Officer as to all elements of the compensation packages of Messrs. Baer, Carleton and Rosenthaler. Our Chief Executive Officer also makes recommendations with regard to Mr. George's compensation. To make these recommendations, our Chief Executive Officer evaluates the performance and contributions of each such named executive officer. He also considers whether the pay packages afforded to such named executive officers are competitive and are aligned internally. He also evaluates the named executive officer's performance against individual, department and corporate goals.

In December 2014, our compensation committee approved a five-year employment agreement with Mr. Maffei (the Maffei Employment Agreement), which establishes his compensation for the term of the agreement. See "—Executive Compensation Arrangements—Gregory B. Maffei" below. Prior to entering into the Maffei Employment Agreement, our compensation committee reviewed information from Mercer with respect to chief executive officer compensation packages at e-commerce and brick and mortar retailers, television shopping networks, and entertainment, media, communications and travel companies and discussed this comparative information and alternative equity award structures with Mercer.

In September 2015, our compensation committee approved a new five-year employment agreement with Mr. George (the George Employment Agreement) and granted equity awards in connection with the execution of the George Employment Agreement. See "—Executive Compensation Arrangements—Michael A. George—2015 Term Options" and "—Elements of 2017 Executive Compensation—Equity Incentive Compensation—Annual Performance Awards—QVC CEO RSUs" below. Prior to entering into the George Employment Agreement, our compensation committee considered the recommendation of Mr. Maffei with respect to Mr. George's compensation package. When considering Mr. Maffei's recommendations concerning Mr. George's compensation, our compensation committee reviewed compensation data from companies similar to QVC, which was compiled by Mercer, as a reference point for the proposed new compensation arrangement.

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Based on this review, our compensation committee determined to confirm and approve the proposed arrangement.

In May 2016, our compensation committee approved a new four-year compensation arrangement with Mr. Baer (the 2016 Baer Employment Agreement), which establishes his compensation for the term of the agreement. See "—Executive Compensation Arrangements—Richard N. Baer" below. Prior to entering into the 2016 Baer Employment Agreement, our compensation committee considered the recommendation of Mr. Maffei with respect to Mr. Baer's compensation package. When considering Mr. Maffei's recommendations concerning Mr. Baer's compensation, our compensation committee reviewed compensation data with respect to chief legal officer compensation packages at media, telecommunications, e-commerce, and entertainment and travel companies.

Elements of 2017 Executive Compensation

For 2017, the principal components of compensation for the named executive officers were:

    base salary;

    a performance-based bonus, payable in cash;

    time-vested and performance-based stock option awards and restricted stock units (RSUs);

    grants of equity incentive awards in connection with the Option Modification Program (as defined below); and

    perquisites and other limited personal benefits.

Base Salary

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. The base salaries of the named executive officers are reviewed on an annual basis (other than Mr. Maffei's base salary, the increases of which are governed by his employment agreement), as well as at the time of any change in responsibilities. Typically, after establishing a named executive officer's base salary, salary increases are limited to cost-of-living adjustments, adjustments based on changes in the scope of the named executive officer's responsibilities, and adjustments to align the named executive officer's salary level with those of our other named executive officers. After completion of the annual review in December 2016, the 2017 base salaries of Messrs. Baer, Carleton and Rosenthaler were increased by 2%, reflecting a cost-of-living adjustment. In 2017, Mr. Maffei received the base salary increase prescribed by the Maffei Employment Agreement. Mr. George's base salary has remained at the initial amount fixed in the George Employment Agreement.

2017 Performance-based Bonuses

Liberty Awards—Overview. For 2017, 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 Bonus Award" below), which was structured to comply with Section 162(m) of the Code. The 2017 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 2017 bonus program unless a minimum corporate performance was achieved: the combined Adjusted OIBDA of QVC, Evite, Inc. (Evite) and zulily (collectively, the Operating Companies) for the year ended December 31, 2017 was required to exceed $750 million (the Bonus Threshold). If the Bonus Threshold was met, the notional bonus pool for our company would be funded with 0.72% of the amount by which such combined Adjusted OIBDA exceeded $750 million (the Cash Bonus Pool). If the Cash 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. For purposes of the bonus program, Adjusted OIBDA is defined as revenue less cost of sales, operating expense and selling, general and administrative expense (excluding stock compensation).

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Each participant was assigned a maximum bonus under the performance-based bonus program for each of Liberty Interactive and Liberty Media. The maximum bonuses for this program were as follows: Mr. Maffei—$5,296,135; Mr. Baer—$919,530; Mr. Carleton—$893,010; and Mr. Rosenthaler—$893,010 (each participant's LIC Maximum Performance Bonus). Liberty Media also established maximum performance-based bonuses for our participants as follows: Mr. Maffei—$7,944,203; Mr. Baer—$1,379,295; Mr. Carleton—$1,339,515; and Mr. Rosenthaler—$1,339,515.

To determine the LIC Maximum Performance Bonus for each of Messrs. Baer, Carleton and Rosenthaler, our compensation committee divided the aggregate base salary paid by Liberty Media to the named executive officers in half, recognizing that the other half would be subject to Liberty Media's bonus program. Our compensation committee then set the LIC Maximum Performance Bonus at two times the quotient above for Mr. Baer, Mr. Carleton and Mr. Rosenthaler. Mr. Maffei's LIC Maximum Performance Bonus was set at five times the base salary paid by our company, which is consistent with the terms of the Maffei Employment Agreement.

Assuming the Bonus Threshold was met (and after taking into account any reductions associated with a shortfall in the Cash Bonus Pool), each participant was entitled to receive from our company an amount (the LIC Maximum Individual Bonus) equal to 60% of the LIC Maximum Performance Bonus for that participant. The LIC Maximum Individual Bonus was 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. Under Liberty Media's corollary program, each participant was entitled to receive from Liberty Media a maximum individual bonus, equal to 60% of his Liberty Media maximum performance 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 Liberty Media. 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.

Also, assuming the Bonus Threshold was met (and after taking into account any reductions associated with a shortfall in the Cash Bonus Pool), each participant was entitled to receive from our company an amount (the LIC Maximum Corporate Bonus) equal to 40% of his LIC Maximum Performance Bonus, subject to reduction based on a subjective determination of the corporate performance of our company. Liberty Media has a corollary program pursuant to which each participant was entitled to receive from Liberty Media a bonus that is 40% of the Liberty Media maximum bonus, which was subject to reduction based on a subjective determination of the corporate performance of Liberty Media.

In December 2017, our compensation committee and the Liberty Media compensation committee reviewed contemporaneously our respective named executive officers' performance under each company's program. Notwithstanding this joint 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 2017, our compensation committee determined that the combined Adjusted OIBDA for the Operating Companies was approximately $2,000.8 million using the formula described above, exceeding the Bonus Threshold by approximately $1,250.8 million, thereby creating a notional Cash Bonus Pool of approximately $9.01 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 under the performance-based bonus program up to his maximum bonus amount. Our company's Adjusted OIBDA was determined after the end of 2017 to be $1,996 million, which determination did not affect the amounts payable or amounts actually paid under the program. These calculations were done on a constant currency basis.

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. Our 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 each named executive officer's LIC

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Maximum Individual Bonus, our compensation committee considered the various performance objectives related to our company which had been assigned to each participant for 2017, including:

Individual
Performance Objectives
Gregory B. Maffei

With QVC management, develop strategy to increase sales and manage costs at QVC

Pursue corporate development initiatives; consider strategic acquisitions

Assess capital allocation strategies

Evaluate and pursue strategic options for equity affiliate investments

Pursue additional capital funding strategies, particularly permanent capital alternatives

Support development and goals of management team; conduct succession planning at all levels

Richard N. Baer

Complete legal work associated with General Communication Inc. acquisition and related transactions

Provide sound and timely advice to senior management and board on key issues

Provide effective legal support in connection with mergers, acquisitions, investments and other transactional matters

Facilitate, along with other members of senior management team, sound approach to governance and compliance; evaluate cybersecurity approach at portfolio companies

Provide legal support to, and assess and appropriately manage significant legal matters of subsidiaries, controlled companies, and spin-off companies

Mark D. Carleton

Actively manage Liberty's involvement in QVC, including coordinating HSN, Inc./QVC integration process and assisting with corporate development opportunities

Support the accounting department to maintain timely and accurate internal and external financial reports

Participate in rationalization efforts pertaining to equity affiliate investments

Albert E. Rosenthaler

Obtain IRS issue resolution agreement in connection with Liberty Expedia split-off

Evaluate strategies for separation of Liberty Ventures tracking stock group

Assist in analysis and negotiation of acquisition of HSN, Inc. by QVC

Evaluate alternative capital raising strategies and identify possible acquisition targets

Continue oversight of tax department

Increase resources in corporate development department

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EXECUTIVE COMPENSATION

Following a review of the participants' performance and a review of the time allocated to matters for our company, 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

  $ 1,906,609     81.25 % $ 1,549,120  

Richard N. Baer

  $ 518,615   87.50 % $ 453,788  

Mark D. Carleton

  $ 267,903     75.00 % $ 200,927  

Albert E. Rosenthaler

  $ 407,213   81.25 % $ 330,860  

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 2017 Adjusted OIBDA, revenue and free cash flow (as defined below) for the Operating Companies, all of which forecasts were prepared in December 2017 and are set forth in the table below. Also set forth in the table below are the corresponding actual financial measures achieved for 2017, which were within one percent of our forecasts except that actual free cash flow was 18% of the forecast. 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 free cash flow in comparison to budget.

 
  (dollar amounts in millions)  
 
  2017 Forecast
  2017 Actual
  Actual /
Forecast

 

Revenue(1)

  $ 10,448   $ 10,441     100%  

Adjusted OIBDA(1)

  $ 2,001   $ 1,996   100%  

Free Cash Flow(1)(2)

  $ 1,012   $ 1,191     118%  
(1)
Revenue, Adjusted OIBDA and Free Cash Flow information represent the summation for QVC and Operating Companies. All calculations were done on a constant currency basis.

(2)
Defined for purposes of the bonus program as Adjusted OIBDA less all other operating and investing items on a constant currency basis.

Based on a review of these forecasts and our compensation committee's consideration of our company's performance against plan for these measures, our compensation committee determined that the growth metrics were achieved to the extent described below:

Growth Factor
Liberty Interactive
Corporation

Revenue

10% of a possible 25%

Adjusted OIBDA

30% of a possible 50%

Free Cash Flow

20% of a possible 25%

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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

  $ 1,586,356     60 % $ 951,814  

Richard N. Baer

  $ 275,428   60 % $ 165,257  

Mark D. Carleton

  $ 267,484     60 % $ 160,490  

Albert E. Rosenthaler

  $ 267,484   60 % $ 160,490  

Aggregate Results. The following table presents information concerning the aggregate 2017 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

  $ 1,549,120   $ 951,814   $ 2,500,933  

Richard N. Baer

  $ 453,788   $ 165,257   $ 619,045  

Mark D. Carleton

  $ 200,927   $ 160,490   $ 361,418  

Albert E. Rosenthaler

  $ 330,860   $ 160,490   $ 491,351  

Our compensation committee then noted that, when combined with the total 2017 performance-based bonus amounts paid by Liberty Media to the overlapping named executive officers, each of our named executive officers received the following payments:

Name
  Combined
Performance Bonus

 

Gregory B. Maffei

  $ 8,567,306  

Richard N. Baer

  $ 1,556,445  

Mark D. Carleton

  $ 1,377,604  

Albert E. Rosenthaler

  $ 1,444,580  

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

QVC Bonus Award. Mr. George's 2017 performance-based bonus was structured to align with the 2017 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 cash bonus based upon 2017 QVC Consolidated Global EBITDA performance, including zulily performance, on a constant currency basis (QVC Global EBITDA). His target bonus amount would be 100% of his base salary as required by the terms of his employment agreement and his maximum bonus amount would be 240% of his base salary. For this purpose, QVC Global EBITDA was defined as earnings before interest, taxes, depreciation and amortization of QVC and zulily (consolidated, on a constant currency basis).

For any bonus to be paid, 2017 QVC Global EBITDA would need to equal or exceed $1,808 million. If 2017 QVC Global EBITDA equaled or exceeded $1,808 million, then Mr. George would be eligible to receive a maximum bonus of 240% 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. QVC Global EBITDA for 2017 was $1,974,634 (excluding $8.7 million of one-time costs associated with the HSN, Inc. integration), which exceeded the threshold for receiving a bonus payment. Our compensation committee then reviewed Mr. George's individual performance and the QVC Global EBITDA performance and awarded Mr. George a bonus of $2 million.

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EXECUTIVE COMPENSATION

Equity Incentive Compensation

The Liberty Interactive Corporation 2016 Omnibus Incentive Plan, as amended (the 2016 incentive plan) provides, and prior to their expiration, the Liberty Interactive Corporation 2012 Incentive Plan and the Liberty Interactive Corporation 2010 Incentive Plan (As Amended and Restated Effective November 7, 2011) (each as amended) provided, for the grant of a variety of incentive awards, including stock options, restricted shares, RSUs, stock appreciation rights and performance awards. Our compensation committee has a preference for grants of stock-based incentive awards (RSUs, restricted stock and options) as compared with cash incentive awards based on the belief that they 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, typically measured by reference to the closing price on the grant date.

Maffei Performance-based Equity Awards. In December 2014, we entered into the Maffei Employment Agreement which provides Mr. Maffei with the opportunity to earn annual equity incentive awards during the employment term. See "—Executive Compensation Arrangements—Gregory B. Maffei" for additional information about the annual awards to be provided under the Maffei Employment Agreement.

The Maffei Employment Agreement provides that Mr. Maffei was entitled to receive from our company and Liberty Media in 2017 a combined target value equity award of $18 million and contemplates that the equity awards would be structured to comply with Section 162(m) of the Code. The Maffei Employment Agreement contemplated that the $18 million equity award would be divided between our company and Liberty Media according to relative market capitalization. Mr. Maffei is also eligible to receive above-target equity awards from our company and Liberty Media equaling in the aggregate $9 million (split by relative market capitalization) that would be granted at the end of the performance period in each compensation committee's sole discretion. The Maffei Employment Agreement also sets forth provisions for determining and establishing any performance criteria for equity awards.

In 2017, our compensation committee, with the consent of Mr. Maffei, elected to waive for purposes of the 2017 equity awards the provisions of the Maffei Employment Agreement that set forth the process for establishing the annual performance criteria. Instead, our compensation committee decided to grant a combination of time-vested stock options and performance-based RSUs. Our compensation committee believes that time-vested stock options are consistent with its philosophy of aligning the interests of the named executive officers with those of our stockholders, with the ultimate goal of appropriately motivating our executives to increase long-term stockholder value. In addition, our compensation committee believed that Mr. Maffei's RSU grants should be subject to performance metrics that incentivize and reward Mr. Maffei for successful completion of our company's strategic initiatives. Further, our compensation committee adjusted the division of the award value between QRTEB awards and LVNTB awards from that which would have resulted from a split according to relative market capitalization of our two tracking stock groups and Liberty Media's three tracking stock groups. Our compensation committee determined to grant 18% of the total award value of $18 million in QRTEB awards and 19% of the total award value of $18 million in LVNTB awards instead of 26% in QRTEB awards and 11% in LVNTB awards. With Mr. Maffei's consent, our compensation committee determined to increase the value granted from LVNTB to compensate Mr. Maffei for his expected efforts related to the Liberty Ventures tracking stock group, including his efforts related to the Transactions. The parties did not amend the Maffei Employment Agreement and made no decision as to whether to formalize the above process for future grants.

As a result, our compensation committee granted to Mr. Maffei 153,806 QRTEB time-vested options, 268,889 LVNTB time-vested options and 115,207 QRTEB performance-based RSUs (the Maffei RSUs). The stock options had a grant date of May 11, 2017 and had a term of seven years. The QRTEB stock options had a base price of $23.87, and the LVNTB stock options had a base price of $52.39. Pursuant to our policy of determining fair market value in the absence of sufficient trading volume on the day in question, these base prices were set at 1.0075 of the closing price of the corresponding Series A tracking stock group stock. In addition, the stock options vested in full on December 31, 2017, and were subject to other applicable terms and conditions for option grants as set forth in the Maffei Employment Agreement. Our compensation

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committee also granted to Mr. Maffei the Maffei RSUs on March 30, 2017. The Maffei RSUs would vest only upon attainment of the performance objectives described below.

Our compensation committee adopted an annual, performance-based program for payment of the Maffei RSUs, which was structured to comply with Section 162(m) of the Code. None of the Maffei RSUs would vest unless a minimum corporate performance was achieved: the combined Adjusted OIBDA of the Operating Companies for the year ended December 31, 2017 was required to exceed $750 million (the Maffei RSU Threshold). If the Maffei RSU Threshold was met, the notional pool for payment of the Maffei RSUs would be funded with 0.50% of the amount by which such combined Adjusted OIBDA exceeded $750 million (the Maffei RSU pool). A maximum payout equal to 1.5 times the target number of Maffei RSUs or $ 5.625 million of initial grant value was established.

For purposes of the Maffei RSU pool, Adjusted OIBDA was defined in the same manner as the cash performance bonus program. See "—2017 Performance-based Bonuses—Liberty Awards—Overview" above. Assuming the Maffei RSU Threshold of $750 million was met and the Maffei RSU pool was funded, the amount earned would be subject to reduction from the maximum amount payable by our compensation committee based on subjective performance criteria. After review of our company's 2017 Adjusted OIBDA results, our compensation committee determined and certified that the maximum Maffei RSU awards could be paid to Mr. Maffei. Our compensation committee decided to review Mr. Maffei's performance for purposes of payment of the Maffei RSUs based on his corporate development activity, financial engineering/restructuring activities, executive development activities and industry and investor relations activities. After considering Mr. Maffei's performance in these areas as well as his performance in achieving the metrics under the cash performance bonus program, our compensation committee determined to reduce the maximum payment to target award level and then approved the vesting of 100% of the Maffei RSUs previously granted. For more information regarding the target equity awards, see the "Grants of Plan-Based Awards" table below.

Multiyear Stock Options. Consistent with its previous practices, our compensation committee has made larger stock option grants (equaling approximately four to five years' value of the named executive officer's annual grants) that vest between four and five years after grant, rather than making annual grants over the same period. These multiyear grants provide for back-end weighted vesting and generally expire seven to ten 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. Our compensation committee made such an award to Mr. Maffei in connection with the execution of the Maffei Employment Agreement. See "—Executive Compensation Arrangements—Gregory B. Maffei" below. Also, in March 2015, our compensation committee granted to each of Messrs. Carleton and Rosenthaler multiyear stock options that equaled the value of the named executive officer's annual grants that were expected to be granted to them for the period from January 1, 2016 through December 31, 2020. See "Summary Compensation Table" below. Also, Mr. Baer received a multi-year stock option award in June 2016 in connection with entering into the 2016 Baer Employment Agreement. See "—Executive Compensation Arrangements—Richard N. Baer—2016 Baer Employment Agreement—2016 Term Options" below. Mr. Baer's grant equaled the value of his annual grants that were expected to be granted to him for the period from January 1, 2017 through December 31, 2020. In September 2015, Mr. George received a multiyear stock option grant that equaled the value of his annual grants that were expected to be granted to him for the period from January 1, 2016 through December 31, 2020.

Annual Performance Awards

Chief RSU Awards. Consistent with our practice since December 2014 of granting a combination of multiyear stock options and annual performance awards to senior officers, our compensation committee granted annual performance RSUs to Messrs. Baer, Carleton and Rosenthaler in March 2017. Our compensation committee granted to each of Messrs. Baer, Carleton and Rosenthaler, 24,982, 18,638, and 18,638 QVCA performance-based RSUs, respectively, and 4,718, 3,522, and 3,522 LVNTA performance-based RSUs, respectively, on March 30, 2017 (the Chief RSUs). The Chief RSUs would vest only upon attainment of the performance objectives described below.

Our compensation committee adopted an annual, performance-based program for payment of the Chief RSUs, which was structured to comply with Section 162(m) of the Code. None of the Chief RSUs would vest unless a minimum corporate performance was achieved: the combined Adjusted OIBDA of the Operating Companies for the year ended December 31, 2017 was required to exceed $750 million (the Chief Threshold). If the Chief

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EXECUTIVE COMPENSATION

Threshold was met, the notional pool for payment of the Chief RSUs would be funded with 0.46% of the amount by which such combined Adjusted OIBDA exceeded $750 million (the Chief RSU pool). If the Chief RSU pool was not funded so that the maximum awards could be paid to all participants, each participant's maximum award would be reduced pro rata. The maximum payout set for each of Messrs. Baer, Carleton and Rosenthaler was $1.875 million, $1.4 million and $1.4 million, respectively.

For purposes of the Chief RSU pool, Adjusted OIBDA was defined in the same manner as the performance cash bonus program. See "—2017 Performance-based Bonuses—Liberty Awards—Overview" above. Assuming the Chief Threshold of $750 million was met and the Chief RSU pool was fully funded, the amount earned would be subject to reduction from the maximum amount payable by our compensation committee based on subjective performance criteria. After review of our company's 2017 Adjusted OIBDA results, our compensation committee determined and certified that the maximum Chief RSU awards could be paid to Messrs. Baer, Carleton and Rosenthaler. Our compensation committee then determined to review each named executive officer's performance to determine what portion of the maximum award would be paid. Our compensation committee reviewed Messrs. Baer, Carleton and Rosenthaler's performance and also considered the recommendations from Mr. Maffei. Mr. Maffei recommended that our committee vest 100% of the Chief RSUs previously granted to each of Messrs. Carleton and Rosenthaler based on his assessment of their individual performance against the goals established in connection with the performance cash bonus program and his general observation of their leadership and executive performance. Accordingly, our compensation committee determined to reduce the payouts down to the target award levels and then approved vesting of all of the Chief RSUs previously granted to Messrs. Baer, Carleton and Rosenthaler.

QVC CEO RSUs. Pursuant to the George Employment Agreement, Mr. George is eligible for an annual $4.125 million target grant of performance-based RSUs with respect to QRTEA stock. Accordingly, our compensation committee granted to Mr. George 214,174 QRTEA performance-based RSUs (the George RSUs) on March 30, 2017. The George RSUs would vest only upon attainment of the performance objectives described below.

Our compensation committee adopted an annual, performance-based program for payment of the George RSUs, which was structured to comply with Section 162(m) of the Code. None of the George RSUs would vest unless a minimum corporate performance was achieved: the QVC Global EBITDA was required to exceed $750 million (the George Threshold). If the George Threshold was met, the notional pool for payment of the George RSUs would be funded with 0.55% of the amount by which such combined QVC Global EBITDA exceeded $750 million (the George RSU pool). A maximum payout equal to 1.5 times the target number of George RSUs or $6,187,500 of initial grant value was established.

For purposes of the George RSU pool, QVC Global EBITDA was defined in the same manner as the cash performance bonus program for Mr. George. See "—2017 Performance-based Bonuses—QVC Bonus Award" above. Assuming the George Threshold of $750 million was met and the George RSU pool was funded, the amount earned would be subject to reduction from the maximum amount payable under the program based 60% on subjective performance criteria and 40% on objective performance criteria.

After review of our company's 2017 QVC Global EBITDA results, our compensation committee determined and certified that the maximum George RSU awards could be paid to Mr. George. Our compensation committee then determined to review Mr. George's performance on the subjective and objective criteria discussed below to determine what portion of the maximum award would be paid.

Our compensation committee and Mr. George had previously established subjective performance criteria for payment of the George RSUs. Our compensation committee evaluated Mr. George on the following subjective criteria:

    Successful launch of employee engagement initiatives

    Achievement of core business growth initiatives, including:

    o
    Increasing product and programming diversity;

    o
    Expanding business model reach and growing adjacent business segments; and

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      o
      Delivering exceptional customer experiences

    Successful buildout of technology platforms

    Improvement of execution and reduction of costs globally to fund growth initiatives

In addition, our compensation committee established objective criteria for determining the payout of 40% of any award. For any payout to be made, QVC Global EBITDA would need to exceed $1,808 million. Assuming that the threshold was achieved, Mr. George would be eligible for higher payouts based on QVC Global EBITDA performance. Based on these subjective and objective metrics, our compensation committee reduced down to the target award level represented by the George RSUs and then determined to vest 100% of the George RSUs.

Option Modification Program. In December 2017, our compensation committee determined to complete an option modification program (the Option Modification Program) with four of our named executive officers (collectively, the Eligible Optionholders) to obtain certain tax benefits in the 2017 tax year. Our tax rate was expected to decrease for tax years after 2017 due to the enactment of the Tax Cuts and Jobs Act of 2017 (Tax Act). As a result, our compensation committee determined to effect the Option Modification Program to realize the compensation deduction in respect of the affected incentive awards during a tax year when the compensation deduction is taxed at a higher corporate tax rate.

For income tax purposes, the exercise of the vested and unvested options pursuant to the Option Modification Program would allow our company to record deductions in 2017 for compensation expenses totaling $104 million. The cash tax benefit of these deductions was estimated at $38 million.

On December 21, 2017, our compensation committee approved the acceleration on December 26, 2017 (the Grant Date) of (i) each unvested in-the-money option to acquire shares of LVNTA and (ii) each unvested in-the-money option to acquire shares of LVNTB, in each case, held by the Eligible Optionholders. Following this acceleration, also on the Grant Date, each Eligible Optionholder exercised, on a net settled basis, all of his outstanding in-the-money vested and unvested options to acquire QRTEA shares, LVNTA shares and LVNTB shares (the Eligible Options) and:

    with respect to each vested Eligible Option:

    o
    the company 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 is, in the case of options to acquire shares of QRTEA or LVNTA, the closing price per QRTEA or LVNTA share, as applicable, on The Nasdaq Global Select Market on the Grant Date, and, in the case of options to acquire shares of LVNTB, the fair market value of the LVNTB shares as determined pursuant to the incentive plan under which the awards were granted; and

    and with respect to each unvested Eligible Option:

    o
    in satisfaction of the exercise, on a net settled basis, of the unvested Eligible Options, the company granted the Eligible Optionholder a number of restricted LVNTA or LVNTB shares (the Restricted Shares) with a vesting schedule identical to that of the unvested Eligible Option so exercised, and the Eligible Optionholder made an election under Section 83(b) of the Internal Revenue Code with respect to such Restricted Shares; and

    o
    the company granted the Eligible Optionholder a new option (the Unvested New Option) to acquire the same series of common stock, and with substantially the same terms and conditions, including with respect to vesting and expiration, as the unvested Eligible Option exercised as set forth above, except that the number of LVNTA or LVNTB shares subject to such Unvested New Option is equal to the number of shares subject to the unvested Eligible Option exercised as set forth above minus the number of Restricted Shares received upon exercise of such unvested Eligible Option, and the exercise price of such new option is, in the case of a LVNTA option, the closing price per share of LVNTA on the Nasdaq Global Select Market on the Grant Date, or, in the case of a LVNTB option, the fair value of the LVNTB shares as determined pursuant to the incentive plan under which the Unvested New Options were granted.

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EXECUTIVE COMPENSATION

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.

Also, our company provided each of the Eligible Optionholders with a supplemental QRTEA option grant and a supplemental LVNTA option grant each of which had a Black-Scholes value equal to the estimated amount of certain incremental tax liabilities that each Eligible Optionholder will incur as a result of participation in the Option Modification Program. Each Eligible Optionholder was expected to incur an incremental tax liability with respect to QRTEA awards and LVNTA and LVNTB awards, respectively, due to the reduction under the Tax Act of the maximum individual tax rate for the 2018 tax year for U.S. federal income tax purposes, as compared to such rate in effect for 2017. Our company also provided each Eligible Optionholder with certain rights of indemnification and advancement in connection with the Option Modification Program.

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

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) consist of:

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

    in the case of Mr. Carleton, reimbursement for use of private housing while on New York City business trips;

    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.

Taxable income may be incurred by our executives in connection with their receipt of perquisites and personal benefits. Other than with respect to Mr. George, as described below, we have not provided gross-up payments to our executives in connection with any such taxable income incurred during the past three years.

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 our Chief Executive Officer, our Chairman and our Chief Executive Officer and their guests may use the corporate aircraft we share with Liberty Media for non-business purposes subject to specified limitations.

Pursuant to a February 5, 2013 letter agreement between Liberty Media and Mr. Maffei, Mr. Maffei was 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. Effective November 11, 2015, pursuant to a letter agreement between Liberty Media and Mr. Maffei of the same date, Mr. Maffei is entitled to 30 additional hours per year of personal flight time if he reimburses Liberty Media for such usage through the first to occur of (i) the termination of his employment or (ii) the cessation of ownership or lease of corporate aircraft. Under the Maffei Employment Agreement, if Mr. Maffei's employment had been terminated due to disability, for good reason or without cause, Mr. Maffei would have been entitled to continued use of the corporate aircraft under the terms of the February 5, 2013 letter agreement for 12 months after termination of his employment under the Maffei Employment Agreement. Mr. Maffei incurs taxable income, calculated in accordance with the Standard Industry Fare Level (SIFL) rates, for all personal use of the corporate aircraft under the February 5, 2013 letter agreement. Mr. Maffei incurs taxable income at the SIFL rates minus amounts paid under time sharing agreements with Liberty Media for travel pursuant to the November 11, 2015 letter agreement. Flights where there are no passengers on company-owned aircraft were not charged against the 120 hours of personal flight time per year allotted to

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Mr. Maffei 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 incremental cost 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 our 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 Liberty Media's corporate aircraft that are allocable to our company. Pursuant to aircraft time sharing agreements between Liberty Media and Mr. Maffei, Mr. Maffei reimburses Liberty Media for costs associated with his up to 30 hours of personal use of its corporate aircraft under the November 11, 2015 letter agreement, and such costs include the expenses listed above, insurance obtained for the specific flight and an additional charge equal to 100% of the aircraft fuel and oil expenses for the specific flight.

For purposes of determining an executive's taxable income, personal use of Liberty Media's 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. In 2017, Mr. George received a tax gross-up from QVC relating to certain out of state income taxes to which he was subject in connection with the performance of his duties outside of QVC's headquarters.

Changes for 2018

In March 2018, our compensation committee determined, with the consent of Mr. Maffei, to waive again the process required by the Maffei Employment Agreement to set performance criteria for Mr. Maffei's 2018 annual performance awards. Our compensation committee determined to implement the same general process as used in 2017 and 2016. The parties have not determined whether to formalize this process for future annual performance awards.

In connection with the closing of the Transactions, Mr. Maffei was appointed as the executive Chairman of the Board of our company. At the same time, Mr. George was appointed as President and CEO of our company. In connection with Mr. Maffei's change in role, our company and Mr. Maffei executed an amendment to the Maffei Employment Agreement to reflect the change in role from President and CEO to executive Chairman of the Board and to reflect the changes in our equity securities after the Transactions. Pursuant to the amendment, Mr. Maffei agreed that the change in role would not constitute a good reason termination under the Maffei Employment Agreement.

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EXECUTIVE COMPENSATION

Deductibility of Executive Compensation

In developing the 2017 compensation packages for the named executive officers, the deductibility of executive compensation under Section 162(m) of the Code is considered. That provision prohibits the deduction of compensation of more than $1 million paid to certain executives, subject to certain exceptions. For 2017 and prior years, one exception was for performance-based compensation, including stock options granted under our incentive plans, although in order to maintain flexibility in making compensation decisions, our compensation committee did not adopt a policy requiring all compensation to be deductible under Section 162(m) of the Code. Following the enactment of the Tax Act, beginning with the 2018 calendar year, the executives potentially affected by the limitations of Section 162(m) of the Code has been expanded and there is no longer any exception for qualified performance-based compensation. Although some performance-based awards will not result in a compensation deduction until after 2017, we believe the transition rules in effect for binding contracts in effect on November 2, 2017 should continue to allow certain of these awards to maintain their exemption from the $1 million annual deduction limitation for so long as such contracts are not materially modified. However, portions of the compensation we pay to the named executive officers may not be deductible due to the application of Section 162(m) of the Code. Our compensation committee believes that the lost deduction on compensation payable in excess of the $1 million limitation for the named executive officers is not material relative to the benefit of being able to attract and retain talented management.

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.

Stock Ownership Guidelines

Our board of directors adopted stock ownership guidelines that require each named executive officer to own shares of our company's stock equal to (i) at least three times the base salary paid by our company to Mr. Maffei, with respect to Mr. Maffei's requirement, (ii) at least three times 50% of the base salary paid by our company to Messrs. Baer, Carleton and Rosenthaler, in the case of Messrs. Baer, Carleton and Rosenthaler, and (iii) at least three times the base salary paid to Mr. George by Qurate, in the case of Mr. George. The named executive officers other than Mr. George have a similar stock ownership requirement at Liberty Media with respect to the base salary paid by Liberty Media, in the case of Mr. Maffei, or allocated to Liberty Media per our company's stock ownership guidelines, in the case of Messrs. Baer, Carleton and Rosenthaler. The named executive officers will have until March 2021 to comply with these guidelines.

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SUMMARY COMPENSATION TABLE

Name and Principal
Position
(as of 12/31/17)

  Year
  Salary
($)(1)

  Bonus
($)

  Stock
Awards
($)(2)

  Option
Awards
($)(3)(4)

  Non-Equity
Incentive
Plan
Compensation
($)

  Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(5)

  All Other
Compensation
($)(6)(7)(8)

  Total
($)

 

Gregory B. Maffei

    2017     1,059,227         2,292,619     41,792,609 (11)   2,500,933         164,368 (9)(10)(11)   47,809,756  

President and Chief

    2016     1,045,739         1,969,633     8,064,242     2,006,909         186,194 (9)(10)   13,272,717  

Executive Officer

    2015     960,750         5,928,866     3,626,072     3,981,886         370,418 (9)(10)   14,867,993  

Richard N. Baer

  2017   432,179     706,695   1,462,847 (11) 619,045     16,226 (11) 3,236,992  

Chief Legal Officer

  2016   327,307       4,415,468   372,379     11,057   5,126,211  

  2015   437,622         768,167     15,701   1,221,490  
                 

Mark D. Carleton(12)

    2017     223,253         527,625     779,982 (11)   361,418     7,285     11,076 (10)(11)   1,910,639  

Chief Financial Officer

    2016     127,147         1,630,734         145,058     4,434     5,655 (10)   1,913,028  

    2015     n/a     n/a     n/a     n/a     n/a     n/a     n/a     n/a  

Michael A. George

  2017   1,250,000     4,262,063     2,000,000     171,432 (13) 7,683,495  

President and Chief Executive

  2016   1,254,788     4,075,940         97,707 (13)(14)(15) 5,428,435  

Officer, QVC, Inc.

  2015   1,125,509       17,474,524   1,000,000     100,512 (13)(14)) 19,700,545  
                 

Albert E. Rosenthaler

    2017     339,344           527,625     1,313,221 (11)   491,351         12,058 (11)   2,683,599  

Chief Corporate Development

    2016     336,031         1,630,734         380,024         16,689 (14)   2,363,478  

Officer

    2015     464,860             6,302,802     822,513         17,271     7,607,447  
(1)
The amounts set forth in the table reflect compensation paid to our named executive officers by Liberty Media but allocable to our company under the services agreement (except with respect to Mr. Maffei's 2017, 2016 and 2015 base salary, which we paid directly pursuant to the Maffei Employment Agreement, and Mr. George, whose compensation reported above was paid directly by QVC with respect to the entire year, neither of which is covered by the services agreement). See "—Compensation Discussion and Analysis—Services Agreement."

(2)
Reflects the grant date fair value of restricted stock and RSUs granted to our named executive officers during 2017, 2016 and 2015. The table reflects the grant date fair value of the 2015 performance-based RSUs granted to Mr. Maffei, the 2016 performance-based RSUs granted to Messrs. Maffei, Carleton, George and Rosenthaler, the 2017 Maffei RSUs granted to Mr. Maffei, the 2017 George RSUs granted to Mr. George and the 2017 Chief RSUs granted to each of Messrs. Baer, Carleton and Rosenthaler as described in "—Compensation Discussion and Analysis—Elements of 2017 Executive Compensation—Equity Incentive Compensation." A maximum payout equal to 1.5 times the target number of Maffei RSUs, or $5.625 million of initial grant value was established. The maximum payout set for Mr. Baer was $1.875 million of initial grant value, and the maximum payout set for each of Messrs. Carleton and Rosenthaler was $1.4 million of initial grant value of the Chief RSUs. A maximum payout equal to 1.5 times the target number of George RSUs or $6.188 million of initial grant value was also established. The grant date fair value of these awards 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 15 to our consolidated financial statements for the year ended December 31, 2017 (which are included in the 2017 Form 10-K).

(3)
Certain Option Awards set forth in this column were received by our named executive officers (other than Mr. George) in connection with the Option Modification Program (as described in more detail above), wherein our compensation committee approved the acceleration on December 26, 2017, the Grant Date, of (i) each unvested in-the-money option to acquire shares of LVNTA and (ii) each unvested in-the-money option to acquire shares of LVNTB, in each case, held by the Eligible Optionholder. Following this acceleration, also on the Grant Date, each Eligible Optionholder exercised, on a net settled basis, all of his outstanding 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 is, in the case of options to acquire shares of QRTEA or LVNTA, the closing price per QRTEA or LVNTA share, as applicable, on The Nasdaq Global Select Market on the Grant Date, and, in the case of options to acquire shares of LVNTB, the fair market value of the LVNTB shares as determined pursuant to the incentive plan under which the awards were granted; and

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    with respect to each unvested Eligible Option:

      o
      in satisfaction of the exercise, on a net settled basis, of the unvested Eligible Option, our compensation committee granted to the Eligible Optionholder a number of LVNTA or LVNTB Restricted Shares with a vesting schedule identical to that of the unvested Eligible Option so exercised; and

      o
      our compensation committee granted the Eligible Optionholder an Unvested New Option to acquire the same series of common stock, and with substantially the same terms and conditions, including with respect to vesting and expiration, as the unvested Eligible Option exercised as set forth above, except that the number of LVNTA or LVNTB shares subject to such Unvested New Option is equal to the number of shares subject to the unvested Eligible Option exercised as set forth above minus the number of Restricted Shares received upon exercise of such unvested Eligible Option, and the exercise price of such new option is, in the case of a LVNTA option, the closing price per share of LVNTA on the Nasdaq Global Select Market on the Grant Date, or, in the case of a LVNTB option, the fair market value of the LVNTB shares as determined pursuant to the incentive plan under which the Unvested New Options were granted.

    With respect to option awards issued in connection with the Option Modification Program, the Option Awards column includes the incremental fair value of each award. With respect to Restricted Shares awards issued in connection with the Option Modification Program, such awards have no incremental fair value to report.

(4)
The grant date fair value of Mr. Maffei's Term Options (as defined below) and 2017, 2016 and 2015 stock option awards, Mr. Baer's 2016 Term Options and Messrs. George and Rosenthaler's 2015 stock option awards (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 15 to our consolidated financial statements for the year ended December 31, 2017 (which are included in the 2017 Form 10-K).

(5)
Reflects the above-market earnings credited to Mr. Carleton's deferred compensation accounts. See "—Executive Compensation Arrangements—2006 Deferred Compensation Plan" and "—Nonqualified Deferred Compensation Plans" below.

(6)
The Liberty Media 401(k) Savings Plan 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 Liberty Media contributed a matching contribution based on the participants' own contributions up to the maximum matching contribution set forth in the plan. Our company reimburses Liberty Media under the services agreement for our allocable portion of the matching contribution. 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, to whom matching contributions of $12,150, $16,411 and $15,900 were made by QVC under its 401(k) savings plan in 2017, 2016 and 2015, respectively), are the following matching contributions made by Liberty Media to the Liberty Media 401(k) Savings Plan and allocated to our company under the services agreement in each of 2017, 2016 and 2015, respectively:

 
  Amounts ($)
 
Name
  2017
  2016
  2015
 

Gregory B. Maffei

    8,100     8,480     11,925  

Richard N. Baer

  12,690   9,275   13,250  

Mark D. Carleton

    6,750     3,710     n/a  

Albert E. Rosenthaler

  10,195   9,805   14,575  

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

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(7)
Included in this column are the following life insurance premiums paid by Liberty Media (with the exception of Mr. George, whose life insurance premium was paid by QVC), on behalf of each of the named executive officers and allocated to our company under the services agreement:
 
  Amounts ($)
 
Name
  2017
  2016
  2015
 

Gregory B. Maffei

    1,471     1,629     2,206  

Richard N. Baer

  3,536   1,782   2,451  

Mark D. Carleton

    1,226     713     n/a  

Michael A. George

  2,322   2,709   1,242  

Albert E. Rosenthaler

    1,863     1,884     2,696  
(8)
Liberty Media makes available to our personnel, including our named executive officers, tickets to various sporting events with no aggregate incremental cost attributable to any single person.

(9)
Includes the following:
 
  Amounts ($)
 
 
  2017
  2016
  2015
 

Reimbursement for legal services

            147,883  

Compensation related to personal use of corporate aircraft(a)

  152,900   174,853   204,962  
(a)
Calculated based on aggregate incremental cost of such usage to our company.
(10)
Prior to the 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 LMC Split-Off and later to Liberty Media in the LMC Spin-Off. Messrs. Maffei and Carleton occasionally used this apartment for personal reasons. From time to time, we reimburse Mr. Carleton for his use of private housing while on New York City business trips, and we also pay the cost of miscellaneous shipping and catering expenses for Mr. Maffei.

(11)
Included in the Option Awards column is the grant date fair value of supplemental stock options awarded to the named executive officers for incremental tax liability to be incurred by them in connection with the Option Modification Program.

(12)
Mr. Carleton was a named executive officer of our company for the first time in the proxy statement for our 2017 annual meeting of stockholders and his compensation for 2015 has been omitted in reliance upon the SEC's interpretive guidance.

(13)
Includes tax gross-ups in the following amounts 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:
 
  Amounts ($)
 
 
  2017
  2016
  2015
 

    156,960     64,333     83,370  
(14)
Includes $10,000 in each of 2016 and 2015 in charitable contributions made on behalf of Mr. George and $5,000 in 2016 in charitable contributions made on behalf of Mr. Rosenthaler pursuant to our political action committee matching contribution program.

(15)
Includes a reimbursement for legal services in 2016.

EXECUTIVE COMPENSATION ARRANGEMENTS