XM Radio 2012 Annual Report Download - page 23

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to which a candidate would fill a present need on the board of directors. After conducting an initial evaluation of
a candidate, the Nominating and Corporate Governance Committee will interview that candidate if it believes the
candidate might be qualified to be a director and may ask the candidate to meet with other directors and
management. If the Nominating and Corporate Governance Committee believes a candidate would be a valuable
addition to the board of directors, it will recommend to the board that candidate’s nomination as a director.
What is the board’s leadership structure?
Gregory B. Maffei is the Chairman of our board of directors. The chairman of our board organizes the work
of the board and ensures that the board has access to sufficient information to enable the board to carry out its
functions, including monitoring our performance and the performance of management. The Chairman, among
other things, presides over meetings of the board of directors, establishes the agenda for each meeting of the
board in consultation with our Chief Executive Officer, oversees the distribution of information to directors, and
performs other duties or assignments as agreed with either the board of directors or our Chief Executive Officer.
The board of directors has determined that it is currently in our best interests to separate the Chairman of the
board position and the Chief Executive Officer position because it allows the Chief Executive Officer to focus on
our day-to-day business, including risk management, while allowing the Chairman of the board to lead the board
and assist the board in its fundamental role of providing advice to, and oversight of, management. Further, the
board recognizes that the Chief Executive Officer position requires a significant dedication of time, effort, and
energy in the current business environment. Our Corporate Governance Guidelines (the “Guidelines”) do not
establish this approach as a policy, but as a matter that is considered from time-to-time.
Does the board have a lead independent director?
Liberty Media beneficially owns, directly and indirectly, over 50% of our outstanding common stock. In
light of that control relationship, the board of directors believes it is appropriate, and a matter of good corporate
governance, to designate a director to serve as the lead independent director. The board has designated Eddy W.
Hartenstein, the former Chairman of our board of directors, to serve as the lead independent director. The lead
independent director will coordinate the activities of the other independent directors, and will perform such other
duties and responsibilities as the board of directors may determine.
Are all of the directors required to be independent?
Liberty Media beneficially owns, directly and indirectly, over 50% of our outstanding common stock. As a
result, we are exempt from certain corporate governance requirements of the NASDAQ Rules including, among
other items, the requirement that our board of directors be comprised of a majority of independent directors and
that we have independent director oversight over executive officer compensation and director nominations. We
may, in the future, rely on these exemptions available to a controlled company. The controlled company
exemption does not extend to the audit committee independence requirements. Accordingly, our audit committee
will continue to be comprised solely of directors meeting the independence standards under the applicable
NASDAQ listing standards, Section 10A(m)(3) of the of the Exchange Act and our Guidelines. References to
Liberty Media in this proxy statement include Liberty Media Corporation and its predecessors, unless the context
otherwise requires.
How does the board determine which directors are considered independent?
Our board reviews the independence of our directors annually. The provisions of our Guidelines regarding
director independence meet, and in some areas exceed, the listing standards of The NASDAQ Global Select
Market (“NASDAQ”). A copy of the Guidelines is available on our website at http://investor.siriusxm.com.
The Nominating and Corporate Governance Committee undertook a review of director independence in March
2013. As part of this review, the committee reviewed with our Corporate Secretary written questionnaires submitted by
directors. These questionnaires disclose transactions and relationships between each director or members of his
immediate family, on one hand, and Sirius XM, other directors, members of our senior management and our affiliates,
on the other hand.
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