XM Radio 2012 Annual Report Download - page 45

If Mr. Meyer’s employment is terminated without cause or he terminates his employment for good reason,
subject to his execution of a release of claims and his compliance with certain restrictive covenants, 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 within 60 days, 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 October 2013, subject to his execution of a release of claims
and his compliance with certain restrictive covenants and generally in lieu of any other payments under his
employment agreement, we are obligated to continue his health benefits for two years and pay him a lump sum
within 60 days equal to two times the Designated Amount.
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.
Mel Karmazin
In November 2004, we entered into an employment agreement with Mel Karmazin to serve as our Chief
Executive Officer. On December 18, 2012, Mr. Karmazin resigned as our Chief Executive Officer for good
reason under the employment agreement.
The unvested portion of the options granted to Mr. Karmazin, that was scheduled to vest on December 31,
2012, vested on December 18, 2012 as a result of his resignation for good reason. The value of these options as
of the vesting date (calculated as the difference between the closing price on the NASDAQ Global Select Market
of the stock underlying these options less the exercise price, multiplied by the number of options) was
$75,900,000. All of the options granted to Mr. Karmazin were exercised by him prior to the end of 2012. The
value realized on the exercise of these option that vested on December 18, 2012 was $74,382,000.
Mr. Karmazin was paid his base salary through January 2013 and a bonus for his 2012 work in February
2013. He did not receive any severance payment from us as a result of his termination for good reason.
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
initial annual base salary of $850,000 and specified increases to no less than $925,000 in January 2010,
$1,000,000 in January 2011, $1,100,000 in January 2012, and $1,250,000 in January 2013. Mr. Greenstein
waived the increase in his base salary that was scheduled to take effect in January 2012 under his employment
agreement. Mr. Greenstein is also entitled to participate in any bonus plans generally offered to our executive
officers.
In the event Mr. Greenstein’s employment is terminated by us without cause or he terminates his
employment for good reason, subject to his execution of a release of claims, we are obligated to pay him a lump
sum payment equal to his then annual base salary and the cash value of the bonus last paid or payable to him in
respect of the fiscal year preceding the fiscal year in which the termination occurs 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.
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