XM Radio 2014 Annual Report Download - page 134

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which weights observable historical volatility and implied volatility of qualifying actively traded
options on our common stock. The expected life assumption represents the weighted-average
period stock-based awards are expected to remain outstanding. These expected life assumptions
are established through a review of historical exercise behavior of stock-based award grants with
similar vesting periods. Where historical patterns do not exist, contractual terms are used. The risk-
free interest rate represents the daily treasury yield curve rate at the grant date based on the
closing market bid yields on actively traded U.S. treasury securities in the over-the-counter market
for the expected term. Our assumptions may change in future periods.
Stock-based awards granted to employees, non-employees and members of our board of
directors include warrants, stock options, and restricted stock units.
2009 Long-Term Stock Incentive Plan
In May 2009, our stockholders approved the Sirius XM Radio Inc. 2009 Long-Term Stock
Incentive Plan (the “2009 Plan”). Employees, consultants and members of our board of directors are
eligible to receive awards under the 2009 Plan. The 2009 Plan provides for the grant of stock
options, restricted stock awards, restricted stock units and other stock-based awards that the
compensation committee of our board of directors may deem appropriate. Vesting and other terms
of stock-based awards are set forth in the agreements with the individuals receiving the awards.
Stock-based awards granted under the 2009 Plan are generally subject to a vesting requirement.
Stock-based awards generally expire ten years from the date of grant. Each restricted stock unit
entitles the holder to receive one share of common stock upon vesting. As of December 31, 2014,
approximately 19,950,000 shares of common stock were available for future grants under the 2009
Plan.
Other Plans
We maintain four other share-based benefit plans—the XM 2007 Stock Incentive Plan, the
Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan, the XM 1998
Shares Award Plan and the XM Talent Option Plan. No further awards may be made under these
plans, and all outstanding awards are fully vested.
The following table summarizes the weighted-average assumptions used to compute the fair
value of options granted to employees and members of our board of directors:
2014 2013 2012
For the Years Ended December 31,
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6% 1.4% 0.8%
Expected life of options—years . . . . . . . . . . . . . . . . . 4.72 4.73 5.06
Expected stock price volatility. . . . . . . . . . . . . . . . . . . 33% 47% 49%
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . 0% 0% 0%
There were no options granted to third parties during the years ended December 31, 2014,
2013 and 2012. We do not intend to pay regular dividends on our common stock. Accordingly, the
dividend yield percentage used in the Black-Scholes-Merton option value was zero for all periods.
F-28
SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollar amounts in thousands, unless otherwise stated)