XM Radio 2013 Annual Report Download - page 22

expertise (including expertise that could qualify a director as a “financial expert,” as that term is defined by the
rules of the SEC), local or community ties, and (b) minimum individual qualifications, including strength of
character, mature judgment, familiarity with our business and related industries, independence of thought and
ability to work collegially. The Nominating and Corporate Governance Committee also may consider the extent
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 coordinates the activities of the other independent directors and performs such other duties
and responsibilities as the board of directors determines.
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 Global Select Market
(“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 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 NASDAQ. A copy of the
Guidelines is available on our website at http://investor.siriusxm.com.
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