EXHIBIT 99.1

 

IMPORTANT NOTICE CONCERNING LIMITATIONS

ON YOUR ABILITY TO TRADE IN HSN, INC. SECURITIES

DURING 401(k) BLACKOUT PERIOD

 

December 10, 2008

 

To:  Directors and Executive Officers of HSN, Inc.

 

As of this date, the employees of HSN, Inc. (“HSNi”) currently participate in the IAC/InterActiveCorp Retirement Savings Plan (“IAC Plan”).  In connection with the changing of trustees and record-keepers of the IAC Plan and the establishment of the HSN, Inc. Retirement Savings Plan, a blackout period will be imposed under the IAC Plan.  During the blackout period, participants in the IAC Plan will be temporarily unable to effect certain transactions under the IAC Plan, including making investment exchanges into or out of, or taking distributions or loans of money invested in, common stock under the IAC Plan.  The Sarbanes-Oxley Act of 2002 and SEC regulations promulgated thereunder require that HSNi directors and executive officers generally be prohibited from engaging in most transactions involving HSNi equity securities (including options and other derivatives based on HSNi stock) during this blackout period.

 

The blackout period is expected to last from 4:00 p.m., Eastern Time, on January 8, 2009 and end during the week of January 25, 2009.   You can confirm the status of the blackout period by contacting me (Phone: (727) 872-7451  or email: jim.warner@hsn.net) or Linda Frazier (phone: (727) 872-4980 or email: linda.frazier@hsn.net).

 

Generally, during the blackout period, you are prohibited from directly or indirectly purchasing, selling or otherwise transferring any equity securities of HSNi that you acquired in connection with your service as a director or executive officer.  Covered transactions are not limited to those involving your direct ownership, but include any transaction relating to HSNi securities in which you have a pecuniary interest.  Dispositions of equity securities of IAC in connection with the spin-offs are excluded from trading restrictions.  Securities acquired outside of an individual’s service as a director or executive officer (such as shares acquired when the person was an employee but not yet an executive officer or shares acquired before a person became an HSNi director) are not covered.  However, if you hold both covered shares and non-covered shares, any shares that you sell will be presumed to come first from the covered shares unless you can identify the source of the sold shares and show that you use the same identification for all related purposes (such as tax reporting and disclosure requirements).

 

The following are examples of transactions that you may not engage in during the blackout period:

 

 

·                  exercising stock options granted to you in connection with your service as a director or executive officer;

 

·                  selling HSNi stock that you acquired by exercising options;  or

 

·                  selling HSNi stock that you originally received as a restricted stock grant.

 

If you engage in a transaction that violates these rules during the blackout period, you could be required to disgorge your profits from the transaction.  You could also be subject to civil and criminal penalties.

 

The rules summarized above are complex and the criminal and civil penalties that could be imposed upon directors and executive officers who violate them could be severe.  Therefore, please contact me before engaging in any transaction involving HSNi stock or derivative securities based on HSNi stock during the blackout period or if you believe that any such transaction in which you have a pecuniary interest may occur during the blackout period.