XM Radio 2009 Annual Report Download - page 34

Scott A. Greenstein
In July 2009, we entered into a new employment agreement with Scott A. Greenstein to continue to serve
as our President and Chief Content Officer through July 27, 2013. The employment agreement provides for an
annual base salary in 2010 of $925,000, with specified increases.
In connection with the execution of the employment agreement, we granted Mr. Greenstein an option to
purchase 27,768,136 shares of our common stock at an exercise price of $0.43 per share (the closing price of
our common stock on the date of the employment agreement). These options vest in four equal installments on
each of July 26, 2010, July 26, 2011, July 26, 2012 and July 26, 2013. The vesting of these stock options will
accelerate upon the termination of Mr. Greenstein’s employment by us without cause, by him for good reason,
and upon his death or disability. These options will generally expire on July 27, 2019, subject to earlier
termination following Mr. Greenstein’s termination of employment.
If Mr. Greenstein’s employment is terminated without cause or he terminates his employment for good
reason, subject to an execution of a release of claims, we are obligated to pay him a lump sum payment equal
to his then annual salary and the cash value of the bonus last paid or payable to him in respect of the
preceding fiscal year and to continue his health and life insurance benefits for one year.
In the event that any payment we make, or benefit we provide, to Mr. Greenstein would require him to
pay an excise tax under Section 280G of the Internal Revenue Code, we have agreed to pay Mr. Greenstein
the amount of such tax and such additional amount as may be necessary to place him in the exact same
financial position that he would have been in if the excise tax was not imposed.
James E. Meyer
In October 2009, we entered into a new employment agreement with James E. Meyer to continue to serve
as our President, Operations and Sales, through May 1, 2013. The employment agreement provides for an
initial annual base salary of $950,000, with specified increases.
In connection with the execution of the employment agreement, we granted Mr. Meyer an option to
purchase 25,184,984 shares of our common stock at an exercise price of $0.5752 per share (the closing price
of our common stock on date of the employment agreement). The option will generally vest in four equal
installments on each of October 14, 2010, October 14, 2011, October 14, 2012 and October 14, 2013, and
expire on October 14, 2019, subject to earlier acceleration or termination under certain circumstances.
If Mr. Meyer’s employment is terminated without cause or he terminates his employment for good reason,
subject to an execution of a release of claims, we are obligated to continue his health benefits for 18 months
and his life insurance benefits for one year and pay him a lump sum payment equal to Mr. Meyer’s annual
base salary plus, the greater of (x) a bonus equal to 60% of his then annual base salary or (y) the prior year’s
bonus actually paid to him (the “Designated Amount”). In the event Mr. Meyer elects to retire in April 2011,
subject to an execution of a release of claims and generally in lieu of any other payments under the
employment agreement, we are obligated to continue his health and life benefits for two years and pay him a
lump sum payment equal to two times the Designated Amount.
Upon the expiration of the employment agreement in May 2013 or following his retirement in April
2011, we have agreed to offer Mr. Meyer a one-year consulting agreement for no additional consideration,
other than reimbursement of reasonable out-of-pocket expenses associated with the performance of his
obligations under the consulting agreement.
In the event that any payment we make, or benefit we provide, to Mr. Meyer would require him to pay an
excise tax under Section 280G of the Internal Revenue Code, we have agreed to pay Mr. Meyer the amount of
such tax and such additional amount as may be necessary to place him in the exact same financial position
that he would have been in if the excise tax was not imposed.
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