This excerpt taken from the DTV 10-K filed Mar 1, 2005.
PERFORMANCE STOCK UNIT AWARD AGREEMENT
THIS PERFORMANCE STOCK UNIT AWARD AGREEMENT (this Agreement), dated as of March 16, 2004, is entered into between The DIRECTV Group, Inc., a Delaware corporation (DIRECTV) and Chase Carey (Executive).
WHEREAS, at its meeting on March 15, 2004, the Compensation Committee of DIRECTVs Board of Directors (the Committee) approved The DIRECTV Group, Inc. 2004 Stock Plan (as it may be amended from time to time, the Plan) and the grant to Executive of 1.3 million stock units (the Stock Units), upon the terms and conditions set forth herein and subject to approval of the Plan by DIRECTVs Board of Directors and further subject to the approval of the Plan by DIRECTVs stockholders at their 2004 annual meeting; and
WHEREAS, at its meeting on March 16, 2004, the Board of Directors of DIRECTV approved the Plan and ratified the grant to Executive, effective as of March 16, 2004 (the Award Date), of the Stock Units, upon the terms and conditions set forth herein and subject to the approval of the Plan by DIRECTVs stockholders at their 2004 annual meeting; and
WHEREAS, the Committee and the Board of Directors of DIRECTV each has also approved the terms and conditions of an employment agreement with Executive effective as of January 1, 2004 (such agreement, as it may be amended from time to time, is referred to herein as the Employment Agreement).
NOW THEREFORE, in consideration of services rendered and to be rendered by Executive, and the mutual promises made herein and the mutual benefits to be derived therefrom, DIRECTV and Executive agree as follows:
1. Defined Terms. Any capitalized term used herein and not otherwise defined herein shall have the meaning assigned to such term in the Plan. Whenever the following words or phrases are used herein with the first letter capitalized, they shall have the respective meaning specified below:
Adjustment Factor means the factor that is to be multiplied by the number of Stock Units comprising the Award to determine the number of Stock Units that vest as a result of the performance by DIRECTV Holdings LLC and its Subsidiaries with respect to the Performance Measures. The Adjustment Factor shall be the product of all of the Performance Factors, but in no event shall the Adjustment Factor be greater than one (1).
Award means the grant to Executive of Stock Units pursuant to this Agreement and the Plan.
Company means DIRECTV and its Subsidiaries.
Early Vesting Date means Executives Termination Date if Executive is terminated without Cause (as defined in the Employment Agreement) prior to the Vesting Date and means December 31 of the year in which Executives Termination Date occurs if Executives employment terminates due to death or disability (as determined in accordance with the Employment Agreement) prior to the Vesting Date.
Performance Factor means the factor determined with respect to each Performance Measure pursuant to the table in Exhibit A hereto and used to compute the Adjustment Factor.
Performance Measure means one of the five performance measures established by the Committee in accordance with Section 10 of the Plan for the Performance Period and set forth in Exhibit A hereto.
Performance Period means the period beginning on January 1, 2004 and ending on December 31, 2007 (or, if applicable, the Early Vesting Date).
Termination Date means the date on which Executives employment with the Company terminates.
Vesting Date means December 31, 2007.
2. Grant. Subject to the terms of this Agreement and approval of the Plan by DIRECTVs stockholders at their 2004 annual meeting, DIRECTV hereby grants to Executive a Performance Stock Unit Award with respect to an aggregate of 1.3 million Stock Units (subject to adjustment as provided in Section 14 of the Plan). As used herein, the term Stock Unit shall mean a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of DIRECTVs Common Stock (subject to adjustment as provided in Section 14 of the Plan) solely for purposes of the Plan and this Agreement. The Stock Units shall be used solely as a device for the determination of the payment to eventually be made to Executive if such Stock Units vest pursuant to Section 3 or Section 7. The Stock Units shall not be treated as property or as a trust fund of any kind.
3. Performance Based Vesting. Subject to Section 7, if DIRECTV achieves positive Net Annual Subscriber Growth over the Performance Period, then, as of the Vesting Date (or the Early Vesting Date, if applicable), the Award shall vest and become nonforfeitable with respect to that number of Stock Units determined by multiplying the Adjustment Factor times the total number of Stock Units comprising the Award (subject to adjustment under Section 14 of the Plan). Except as provided in Section 7(a), none of the Stock Units comprising this Award shall vest unless DIRECTV achieves positive Net Annual Subscriber Growth (as determined in accordance with Exhibit A) over the Performance Period.
4. Continuance of Employment. Except as otherwise provided in Section 7 or pursuant to the Plan or the Employment Agreement, Executives continued employment or service through the Vesting Date is required as a condition to the vesting of the Award and the rights and benefits under this Agreement. Partial employment or service, even if substantial, during the Performance Period will not entitle Executive to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 7 below or under the Plan.
5. Limitations on Rights Associated with Stock Units. Executive shall have no rights as a stockholder of DIRECTV, no dividend rights (except as expressly provided in Section 8(c) with respect to Dividend Equivalents, if any) and no voting rights, with respect to the Stock Units and any shares of Common Stock underlying or issuable in respect of such Stock Units until such shares of Common Stock are actually issued to and held of record by Executive. No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the stock certificate, except as otherwise provided in Section 8(c).
6. Restrictions on Transfer. Neither the Stock Units nor any interest therein or amount or shares payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily. The transfer restrictions in the preceding sentence shall not apply to (a) transfers to DIRECTV or (b) transfers by will or the laws of descent and distribution.
7. Effect of Termination of Employment on Vesting. If DIRECTV terminates Executives employment for Cause (as defined in the Employment Agreement) or if Executives employment terminates other than due to his death, disability (as determined in accordance with the Employment Agreement) or termination without Cause, the Award of Stock Units hereunder and all other rights and benefits of Executive under this Agreement shall terminate on Executives Termination Date, unless otherwise approved by the Committee. The following vesting rules apply in the event that Executive is terminated without Cause or his termination is due to death or disability:
(a) If the Company terminates Executives employment without Cause prior to the Vesting Date, the Award shall immediately vest as to the total number of Stock Units comprising the Award (subject to Section 14 of the Plan) without regard to the level of performance with respect to the Performance Measures.
(b) If Executives employment terminates as a result of death or disability prior to the Vesting Date, and if DIRECTV achieves positive Net Annual Subscriber Growth over the period beginning on January 1, 2004 and ending on December 31 of the year in which Executives Termination Date occurs, the Award shall vest as to that number of Stock Units determined by multiplying (i) 25% of the number of Stock Units comprising the Award by (ii) the number of full and partial calendar years of Executives employment with DIRECTV from January 1, 2004 to the Termination Date and by (iii) the Adjustment Factor, except that such Adjustment Factor shall be determined as of the last day of the calendar year in which the Termination Date occurs based on the Performance Factors determined as of that date.