This excerpt taken from the NDAQ 10-K filed Feb 28, 2007.
Principal Terms and Conditions
Performance Period: Three calendar years (i.e., January 1 to December 31)
Vesting: Continued employment until the last day of the performance period, except upon termination of employment under certain circumstances as set forth below, and achievement of performance goals
Conversion: Performance Share Units to be converted into equivalent number of shares of Company common stock in accordance with their terms
Performance Earnout Range
The following is provided as an example of a way in which Performance Share Units may be designed. It is understood that each year, following consultation with the Executive, the Management Compensation Committee of the Company will determine the performance targets and the design of the Performance Share Units.
For performance levels between 50% below target and 50% above target, the number of shares earned will be calculated as a percentage equal to the percentage that actual performance is higher or lower than target. For example, if Target Performance is 12% Annual EPS Growth then:
Annual EPS Growth below 6% earns NO (-0- ) shares
Annual EPS Growth equal to 6% earns 50% (40,000) of the granted shares
Annual EPS Growth equal to 9% earns 75% (60,000) of the granted shares
Annual EPS Growth equal to 12% earns 100% (80,000) of the granted shares
Annual EPS Growth equal to 15% earns 125% (100,000) of the granted shares
Annual EPS Growth equal to 18% or more earns 150% (120,000) of the granted shares
Performance Goals and Earnout Schedule
Effect of Termination of Employment