XM Radio 2008 Annual Report Download - page 122

As a result of this review, the board determined that all of our directors and nominees are independent of
the company and its management under the standards set forth in our Guidelines, with the exception of Mel
Karmazin and Gary M. Parsons, each of whom is an employee, Chester A. Huber, Jr. and John W. Mendel,
who are employees of General Motors and American Honda, respectively, and Gregory B. Maffei, John C.
Malone and David J.A. Flowers, each of whom is an employee of Liberty Media Corporation. With respect to
Joan L. Amble, the board evaluated ordinary course transactions during the last three fiscal years between us
and the American Express Company, for which she serves as an executive officer, and found that the amount
paid by us to American Express was less than 5% of American Express’ consolidated gross revenues during
its last three fiscal years.
The board has also determined that all of the members of the Audit Committee are financially literate and
meet the independence requirements mandated by the applicable NASDAQ listing standards, Section 10A(m)(3)
of the Securities Exchange Act of 1934 and our Guidelines. The board has determined that all of the members
of the Compensation Committee meet the independence requirements mandated by the applicable NASDAQ
listing standards, the rules of the SEC and the Internal Revenue Service applicable to serving on the
Compensation Committee and our Guidelines. The board has determined that all of the members of the
Nominating and Corporate Governance Committee meet the independence requirements mandated by the
NASDAQ listing standards applicable to serving on the Nominating and Corporate Governance Committee and
our Guidelines.
What are our policies and procedures for related party transactions?
We have adopted a written policy and written procedures for the review, approval and monitoring of
transactions involving the company and “related persons.” For the purposes of the policy, “related persons”
include executive officers, directors and director nominees or their immediate family members, or stockholders
owning five percent or greater of our common stock.
Our related person transaction policy requires:
• that any transaction in which a related person has a material direct or indirect interest and which
exceeds $120,000, such transaction referred to as a “related person” transaction, and any material
amendment or modification to a related person transaction, be reviewed and approved or ratified by a
committee of the board composed solely of independent directors who are disinterested or by the
disinterested members of the board; and
• that any employment relationship or transaction involving an executive officer and any related
compensation must be approved by the Compensation Committee of the board or recommended by the
Compensation Committee to the board for its approval.
In connection with the review and approval or ratification of a related person transaction, management must:
• disclose to the committee or disinterested directors, as applicable, the material terms of the related
person transaction, including the approximate dollar value of the amount involved in the transaction,
and all the material facts as to the related person’s direct or indirect interest in, or relationship to, the
related person transaction;
• advise the committee or disinterested directors, as applicable, as to whether the related person
transaction complies with the terms of our agreements governing our material outstanding indebtedness
that limit or restrict our ability to enter into a related person transaction;
• advise the committee or disinterested directors, as applicable, as to whether the related person
transaction will be required to be disclosed in our SEC filings. To the extent required to be disclosed,
management must ensure that the related person transaction is disclosed in accordance with SEC
rules; and
• advise the committee or disinterested directors, as applicable, as to whether the related person
transaction constitutes a “personal loan” for purposes of Section 402 of the Sarbanes-Oxley Act of
2002.
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