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DTV > SEC Filings for DTV > Form 8-K on 2-Nov-2012All Recent SEC Filings

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Form 8-K for DIRECTV


2-Nov-2012

Change in Directors or Principal Officers, Financial Statements and Exhibits


ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

At its meeting on November 2, 2012, the Board of Directors ("Board") of DIRECTV (which is referred to as "DIRECTV" or the "Company") approved employment arrangements with Mr. Michael D. White who will continue as DIRECTV's Chairman, President and Chief Executive Officer ("CEO") after his 2010 employment agreement ("2010 Employment Agreement") expires on January 1, 2013. Mr. White's new employment arrangements are described below.

                    Summary of Cash and Equity Compensation

Base Salary    Mr. White's annual base salary will be $1.7 million, effective
               January 1, 2013. Such base salary will be subject to annual
               review by the Compensation Committee and the Board beginning in
               2014.
Bonus          Mr. White's target performance-based bonus opportunity for 2013
               will be 200% of base salary for achievement of the performance
               goals set by the Compensation Committee and the Board at the
               beginning of the year. The actual bonus determined may vary from
               the target value based on Mr. White's and the Company's
               performance. The Executive Officer Cash Bonus Plan, pursuant to
               which the bonus will be awarded, was approved by shareholders in
               2010 and limits the maximum bonus which is payable.
Stock Option   Mr. White will receive a non-qualified stock option award valued
Awards         at $12 million in November 2012 pursuant to the terms of the 2012
               Non-Qualified Stock Option Award Agreement substantially in the
               form attached as Exhibit 10.1. The award date will be the date
               that is one business day after the Company reports the 2012 third
               quarter earnings and the exercise price for the options will be
               the closing price on that date. This is consistent with the
               methodology used for equity awards to directors and option awards
               to other senior executives. The number of stock options to be
               awarded will be determined based on the Black-Scholes model
               valuation per share using the fair market value of the common
               stock of the Company on the award date. The options may not be
               exercised until they vest 100% on December 31, 2015, with no
               prior or interim scheduled vesting unless otherwise approved by
               the Committee or as summarized below. The 2010 Stock Plan,
               pursuant to which the stock options will be awarded, was approved
               by shareholders in 2010 and sets additional terms and conditions
               for the stock option award.
Employee and   Mr. White will continue to be provided with benefits and
Executive      perquisites as currently provided and as described in the
Benefits and   Company's Definitive Proxy Statement filed with the Securities
Perquisites    and Exchange Commission, or SEC, on March 18, 2012, or the 2012
               Proxy Statement.


CEO Severance Plan The Board has approved a CEO Severance Plan effective on January 1, 2013 in the form attached as Exhibit 10.2, the terms of which are summarized below.

    Summary of the CEO Severance Plan and Stock Option Terms and Conditions

               Treatment of Compensation Upon Termination of Employment
                                                                         During the 2
                                                                       Years Following
                                                                         a Change in
                                                                           Control
                                                      For Involuntary  For Involuntary
                    For Cause or        For Death,      Term Without     Term Without
                      Voluntary       Disability, or    Cause or For     Cause or For
                     Resignation        Retirement     Effective Term   Effective Term
Performance      Cancelled           Pro rata target  Same as death,   Same as death,
Bonus                                bonus            disability and   disability and
                                                      retirement       retirement
2012 Stock       For
Option Award     Cause: Cancelled,
                 including vested
                 stock options

                 For
                 Resignation: Cancel
                 unvested options;   Pro rata
                 vested options      vesting;         100% vesting;    100% vesting;
                 exercisable for     exercisable for  exercisable for  exercisable for
                 full term           full term        3 years          full term
                                     Per plan rules   Per plan rules   Same as
                                     and practices    and practices    involuntary term

                                     For disability,  Continue medical
                                     continue medical benefits until
                                     benefits until   the earliest of
Employee and                         the earlier of   12 months or the
Executive                            12 months or the end of COBRA
Benefits and     Per plan rules and  end of COBRA     coverage or
Perquisites      practices           coverage         other employment
Other Severance  None                None             1 (one) times    Same as
                                                      the sum of base  involuntary term
                                                      salary and
                                                      target bonus
                                                      payable at
                                                      termination

Restrictions for non-compete and non-solicit While employed and for two years after leaving the company, the CEO will not compete with the Company or solicit employees to leave the Company. In consideration for complying with the post-employment restrictions following resignation, retirement, involuntary termination without cause or for Effective Termination and following the end of the 2-year post-employment restriction period, the Company will provide a cash payment equal to one year's base salary plus target bonus (base salary and target bonus in effect at time of retirement). Eligibility for this payment may be cancelled at the time of retirement, upon notice. Upon failure to comply with the post-employment restrictions, the cash amount will not be paid and unvested equity awards are subject to forfeiture and cancellation.

Other Terms Related to Termination Following a Change in Control


"Double-trigger" structure The CEO Severance Plan provides no compensation following a change in control as defined in the CEO Severance Plan, or CIC, unless a "double trigger" event has occurred, that is, both (i) the completion of a CIC transaction, and (ii) a termination of Mr. White's employment.

No excise tax gross up. There is no excise tax gross up payment under the CEO Severance Plan.

Potential reduction in payouts Provide "best net" calculation of payouts such that parachute payments under IRC 280G, if any, would be reduced to the IRC 280G limit to avoid related excise taxes if this lesser amount would provide the better after-tax value as compared to a calculation without the reduction.

Further Information

Further information regarding factors considered in deliberations by the Board and the Committee is provided in Exhibit 99.1, which is attached hereto and incorporated herein by reference. Reference is also made to: the 2010 Employment Agreement, which was previously filed as Exhibit 10.1 to the Form 8-K filed by DIRECTV with the SEC, on January 7, 2010, or the January 2010 8-K; the Executive Cash Bonus Plan (incorporated by reference to Annex B to DIRECTV's Definitive Proxy Statement, filed with the SEC on April 21, 2010; the 2010 Stock Plan (incorporated by reference to Annex A to DIRECTV's Definitive Proxy Statement, filed with the SEC on April 21, 2010); ; the DIRECTV Non-Qualified Stock Option Agreement, which was previously filed as Exhibit 10.2 to the January 2010 8-K; the form of 2012 Non-Qualified Stock Option Award Agreement attached as Exhibit 10.2 hereto; the CEO Severance Plan attached as Exhibit 10.2; and the 2012 Proxy Statement. The descriptions and references to each of these documents are qualified in their entirety by reference to the applicable document.

A copy of the press release relating to the announcement, dated November 2, 2012, is attached hereto as Exhibit 99.2 and is incorporated herein by reference.



ITEM 9.01 Financial Statements and Exhibits

(d)    Exhibits.

10.1   Form of 2012 Non-Qualified Stock Option Award Agreement
10.2   CEO Severance Plan
99.1   Establishing the CEO's New Employment Arrangements
99.2   Press release, dated November 2, 2012


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