XM Radio 2014 Annual Report Download - page 26

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.
The Nominating and Corporate Governance Committee undertook a review of director
independence in March 2015. 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 or her immediate family, on one hand,
and us, other directors, members of our senior management and our affiliates, on the other hand.
As a result of this review, the Nominating and Corporate Governance Committee determined
that all of our directors and nominees are independent under the standards set forth in our
Guidelines and the applicable NASDAQ listing standards, with the exception of James E. Meyer,
our Chief Executive Officer, Gregory B. Maffei and Mark D. Carleton, each of whom is an employee
of Liberty Media, and Evan D. Malone, whose father is the Chairman of Liberty Media. David J.A.
Flowers resigned as a member of our board of directors in 2014. Mr. Flowers was an employee of
Liberty Media and was not considered an independent director.
With respect to Vanessa A. Wittman, the board evaluated an ordinary course transaction that
occurred during 2011 between us and an indirect wholly-owned subsidiary of Marsh & McLennan
Companies, Inc. (“MMC”). Ms. Wittman served as an executive officer of MMC until March 2012.
The board found that the amount we paid to this subsidiary of MMC was less than one tenth of one
percent of MMC’s reported consolidated revenues in the applicable year. Similarly, with respect to
Anthony J. Bates and George W. Bodenheimer, the board evaluated the ordinary course
transactions during the last three fiscal years between us and Microsoft and ESPN, respectively, for
which each served as an executive officer during the last three years, and found that the amounts
paid by us to Microsoft and ESPN was not material to either entity.
The board has determined that a majority of the members of the Compensation Committee
meet the independence standards under the applicable NASDAQ listing standards and our
Guidelines and qualify as “non-employee directors” for purposes of Rule 16b-3 of the Exchange Act
and as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as
amended. The board has determined that a majority of the members of the Nominating and
Corporate Governance Committee meet the independence requirements mandated by NASDAQ
applicable to serving on the Nominating and Corporate Governance Committee and our Guidelines.
The board has also determined that all of the members of the Audit Committee are financially
literate and meet the independence requirements mandated by the applicable NASDAQ listing
standards, Section 10A(m)(3) of the Exchange Act and our Guidelines.
Our independent directors meet regularly in executive sessions.
What are the current standing committees of the board of directors and who are the
members of these committees?
Our board of directors has three standing committees: the Audit Committee, the Compensation
Committee and the Nominating and Corporate Governance Committee. From time to time the board
may also form ad hoc committees. In 2014, our board of directors formed a Special Committee of
independent directors to consider Liberty Media’s proposal (as discussed further below. See
“Governance of the Company—What is the relationship between Sirius XM and Liberty Media
Corporation?”). The board of directors selected Joan L. Amble, Eddy W. Hartenstein and James P.
Holden to serve on the Special Committee. The Special Committee is chaired by Mr. Hartenstein.
Copies of the current charters for the Audit Committee and the Nominating and Corporate
Governance Committee are available on our website at http://investor.siriusxm.com. The
Compensation Committee has not adopted a charter.
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