The DirecTV Group (DTV)

2008 Long-Term Performance and Stock Awards

        2006-2008 RSU Grants.    The performance period for the 2006-2008 RSU grants was January 1, 2006 to December 31, 2008. In 2006, with input from management, the Committee set annual performance targets and ranges as shown in the Supplementary Table 1. Other than pre-SAC margin improvement, the annual performance factor for each performance measure was averaged over the three years to determine the final performance factor for that measure. Pre-SAC margin improvement was measured at the end of the three years as the change from the beginning to the final year of the performance period, with no interim measurements. The final overall performance factor was the average of the five average performance factors. The maximum payout in shares of common stock was limited to 100% of the RSU grant.

        For the 2006-2008 RSU Plan, the Committee annually reviewed Company performance and determined the annual performance factors as shown in Supplementary Table 2 and determined 0.952 or 95.2% as the overall performance for this RSU Plan. The Committee approved the conversion of the RSUs to shares and the payout of 95.2% of the original RSU grant to each named executive officer (other than the CEO, who did not receive an RSU grant in 2006); these final stock awards are shown in the 2008 Option Exercises and Stock Vested Table on page 49.

Long-Term Performance and Stock Awards

        2004 RSU Program.    The performance period for the 2004 RSU award was January 1, 2004 to December 31, 2006. RSUs are not earned until the end of the performance period. With input from management, the Committee set annual performance targets in 2004 as shown in 2006 Supplementary Table 1 on page 29 to focus on revenue, cost management and profitability. Management had proposed a table of performance levels and related performance factors for each target, to address potential performance that may either exceed or fall short of the target. For example, for achieving net subscriber growth of 1.5 million subscribers as compared to a target of 1 million, the performance factor was set at 1.5, while only achieving 0.5 million subscribers would result in a performance factor of 0.5. The performance targets were equally weighted. Each target had a maximum performance level above which no additional award value may be earned and the maximum final award an executive could earn was equal to 100% of the initial RSU grant.

        For the 2004 RSU awards granted to the named executive officers other than Mr. Carey (whose 2004 RSU Award was for four years ending December 31, 2007), the Committee reviewed Company performance as of the end of each year and determined the aggregate performance of the Company as shown in 2006 Supplementary Table 1. Management noted that adopting the set-top box leasing program in March 2006 had the effect (among other things) of reducing SAC and improving margin, both of which had the effect of improving performance for each measure and for the plan as a whole. Consequently, management recommended a reduction in the performance for those two factors for calendar years 2006, 2007 and 2008, applied to each of the 2004, 2005 and 2006 RSU grant programs. The Committee agreed and approved the 2006 annual performance factor and determined the final adjustment factor for the 2004 RSU program, which was 107.3%. Because this exceeded the cap on maximum performance, the Committee approved the payout at 100% of the RSUs granted to each executive officer in 2004, other than Mr. Carey. Because of the reduction in performance for SAC and margin that the Committee approved for 2006, the Committee did not exercise its discretion to reduce

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further the final performance awards. The final number of shares awarded to and the value realized by each of the named executive officers for the 2004 RSU Program are shown in the 2006 Option Exercises and Stock Vested Table on page 42.

2006 SUPPLEMENTARY TABLE 1—2004 RSU PROGRAM TARGETS AND PERFORMANCE

        For Mr. Carey, the Committee has deferred the decisions on the calculation of the interim (annual) performance factors for his 2004 RSU award until the four-year performance period ends on December 31, 2007. This delay provides the Committee the benefit of evaluating the Company's performance against the targets over the entire four-year performance period and allows it to evaluate any one-time events and changes in business strategy that affected Company performance. The Committee believes that this approach will provide a broader view of overall performance. As with the other RSU grants, the Committee retains the discretion to reduce payments or otherwise adjust downward Mr. Carey's RSU awards in accordance with the 2004 Stock Plan.

        2005 RSU Program.    The performance period for the 2005 RSU award is January 1, 2005 to December 31, 2007. With input from management, the Committee set annual performance targets in 2005. The performance measures are net subscriber growth, churn, ARPU growth, SAC and pre-SAC margin improvement. The Company believes that the actual numeric targets are competitively sensitive information. Sharing those specific numeric targets might inform competitors as to future decisions and would result in competitive harm to the Company. The targets can be achieved provided that the Company sustains or improves its performance from year to year. The Committee approved a table for performance levels and related performance factors for each target, which was similar to the 2004 RSU Program. The performance targets were equally weighted. Each target had a maximum performance level above which no additional award value may be earned and the maximum final award an executive may earn is equal to 100% of the initial RSU grant.

        For the 2005 RSU awards granted to the named executive officers, the Committee reviewed Company performance as of the end of each year and determined the aggregate performance of the Company as shown in 2006 Supplementary Table 2 on page 30. The performance factor for 2006 included the same adjustment to SAC and pre-SAC margin improvement performance as discussed for the 2004 RSU program.

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2006 SUPPLEMENTARY TABLE 2—2005 RSU PROGRAM PERFORMANCE

        2006 RSU Program.    The performance period for the 2006 RSU award is January 1, 2006 to December 31, 2008. With input from management, the Committee set annual performance targets in 2006. The performance measures are net subscriber growth, churn, ARPU growth, SAC and pre-SAC margin improvement. The Company believes that the actual numeric targets are competitively sensitive information. Sharing those specific numeric targets might inform competitors as to future decisions and would result in competitive harm to the Company. The targets can be achieved provided that the Company sustains or improves its performance from year to year. The Committee approved a table for performance levels and related performance factors for each target, which was similar to the 2004 and 2005 RSU Programs. The performance targets were equally weighted. Each target had a maximum performance level above which no additional award value may be earned and the maximum final award an executive may earn is equal to 100% of the initial RSU grant.

        The Committee approved changes in the methodology to compute performance and, as a result, there will not be a combined annual performance factor for each year as in the 2004 and 2005 RSU programs. Among these changes, performance for each measure will continue to be determined annually, except for pre-SAC margin improvement, which will be determined only at the end of the 3-year performance period. The change in methodology applies only to the RSU program that commenced in 2006 and does not affect the RSU programs that commenced in 2004 and 2005.

        For the 2006 RSU awards granted to the named executive officers, the Committee reviewed the Company's performance as of the end of the year and determined the 2006 annual performance factor for each target other than pre-SAC margin improvement. For the 2006 RSUs awards, the Committee determined that the performance in 2006 for net subscriber growth and churn fell short of the targets, while performance for ARPU growth and SAC exceeded the targets. The Committee deferred determination of pre-SAC margin improvement until the end of the 3-year performance period. The performance for 2006 included the same adjustment to SAC as discussed for the 2004 RSU program and the pre-SAC margin improvement performance at the end of 2008 will be similarly adjusted.