This excerpt taken from the DTV DEF 14A filed Apr 27, 2007.
2006 GRANTS OF PLAN-BASED AWARDS
Non-Equity Incentive Compensation. The amounts shown in columns (c), (d) and (e) for 2006 represent potential incentive bonus amounts for 2006 under the bonus plan, in each case for performance during the year, but actually paid in the subsequent year. The target amount is based on the percentage of base salary established in each executive's employment agreement or by the Committee for 2006. The maximum funding amount is determined under the Executive Officer Cash Bonus Plan approved by stockholders in 2004. The amounts actually earned and paid to the executive officers under this plan for 2006 are shown in the 2006 Summary Compensation Table in column (e).
Estimated Future Payouts Under Equity Incentive Plan Awards. The amounts shown in columns (f), (g) and (h) represent RSUs granted in 2006 under the 2004 Stock Plan. Mr. Carey received a grant of RSUs in 2004; no additional stock-based grants are currently contemplated for the remainder of the term of Mr. Carey's employment agreement and Mr. Carey did not receive an RSU grant in 2006. Based in part on the report of the Consultant, which indicated that the value of long-term incentive awards for some of the named executives were lower than and not competitive with peer companies and general industry amounts, in 2006, the number of RSUs granted to Messrs. Hunter and Palkovic were increased as compared to the number of RSUs granted in 2005.
The performance period for the 2006 RSU award is January 1, 2006 to December 31, 2008. To determine the number of RSUs earned at the end of the performance period, the Committee will measure performance against targets that were set in 2006 in net subscriber growth, churn, ARPU, SAC and pre-SAC margin improvement. The value of the RSU award to an individual executive officer varies with the market price of the underlying stock and the Company's performance.
Grant Date Fair Value of Stock and Option Awards. The amounts shown in column (i) represent the fair value on the grant date of the 2006 stock-based RSU awards computed in accordance with SFAS No. 123R. The RSUs in column (g) were granted on February 7, 2006, and are valued in column (i) at the closing stock price of the Common Stock on that date ($13.57). During 2006, there were no material modifications to any current or previous stock awards made to the named executive officers.
Note that the value in this column (i) of 2006 Grants of Plan-Based Awards differs from the 2006 Stock Awards value shown in column (d) of the 2006 Summary Compensation Table. The value in column (i) in this table is the fair value of the stock grant made in 2006, while the value in the 2006 Summary Compensation Table column (d) is the value of all stock awards made in 2006 and in previous years that were recognized in the financial statements for 2006.