XM Radio 2009 Annual Report Download - page 35

Dara F. Altman
In September 2008, we entered into a three year employment agreement with Dara F. Altman to serve as
our Executive Vice President and Chief Administrative Officer. We pay Ms. Altman an annual salary of
$446,332.
If Ms. Altman’s employment is terminated without cause or she terminates her employment for good
reason, she is entitled to receive a lump sum severance payment, in cash equal to two times the sum of (1) her
base salary as in effect immediately prior to the termination date or, if higher, in effect immediately prior to
the first occurrence of an event or circumstance constituting good reason, and (2) the higher of (a) the last
annual bonus actually paid to her and (b) 55% of her base salary as in effect immediately prior to the
termination date or, if higher, in effect immediately prior to the first occurrence of an event or circumstance
constituting good reason. In the event Ms. Altman’s employment is terminated without cause or she terminates
her employment for good reason, all options to purchase our common stock, restricted stock units or restricted
shares of common stock issued by us to her during the term that are held by her on the termination date shall
immediately vest. Any such vested stock options shall expire 90 days following the termination. In addition, in
the event Ms. Altman’s employment is terminated without cause or she terminates her employment for good
reason, we are also obligated to continue her medical, dental and life insurance benefits for 24 months
following her termination.
In the event that any payment we make, or benefit we provide, to Ms. Altman would require her to pay
an excise tax under Section 280G of the Internal Revenue Code, we have agreed to pay Ms. Altman the
amount of such tax and any additional amount as may be necessary to place her in the exact same financial
position that she would have been in if the excise tax was not imposed.
Patrick L. Donnelly
In January 2010, we entered into a new employment agreement with Patrick L. Donnelly to continue to
serve as our Executive Vice President, General Counsel and Secretary, through January 13, 2014. The
employment agreement provides for an initial annual base salary of $575,000, with specified increases.
In connection with the execution of the employment agreement, we granted Mr. Donnelly an option to
purchase 13,163,495 shares of our common stock at an exercise price of $0.6669 per share (the last sale price
of our common stock on The NASDAQ Global Select Market prior to the execution of the employment
agreement). The option will generally vest in four equal installments on each of January 14, 2011, January 14,
2012, January 14, 2013 and January 14, 2014, and expires on January 14, 2020, subject to earlier acceleration
or termination under certain circumstances.
If Mr. Donnelly’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. Donnelly would require him to pay
an excise tax under Section 280G of the Internal Revenue Code, we have agreed to pay Mr. Donnelly the
amount of such tax and any 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.
David J. Frear
Mr. Frear has agreed to serve as our Executive Vice President and Chief Financial Officer through July
2011. We pay Mr. Frear an annual salary of $750,000.
If Mr. Frear’s employment is terminated without cause or he terminates his employment for good reason,
we are obligated to pay him a lump sum payment equal to the sum of his annual salary and the annual bonus
last paid to him and to continue his medical and life insurance benefits for one year.
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