XM Radio 2015 Annual Report Download - page 35

among many others. The board is informed about and regularly discusses our risk profile,
including legal, regulatory and operational risks to our business.
What are our policies and procedures for related party transactions?
We have adopted a written policy and written procedures for the review, approval and
monitoring of transactions involving the Company or its subsidiaries and “related persons.” For the
purposes of the policy, “related persons” include executive officers, directors or their immediate
family members, or stockholders owning more than five percent of our common stock.
Our related person transaction policy requires:
•that any transaction in which the Company is a participant, a related person has a material
direct or indirect interest and which exceeds $120,000 (such transaction referred to as a
“related person” transaction) and any material amendment or modification to a related person
transaction, be reviewed and approved or ratified by a committee of the board composed
solely of independent directors who are disinterested or by the disinterested members of the
board; and
•that any employment relationship or transaction involving an executive officer and the
Company must be approved by the Compensation Committee or recommended by the
Compensation Committee to the board for its approval.
In connection with the review and approval or ratification of a related person transaction,
management must:
•disclose to the committee or disinterested directors, as applicable, the material terms of the
related person transaction, including the approximate dollar value of the amount involved in
the transaction, and all the material facts as to the related person’s direct or indirect interest
in, or relationship to, the related person transaction;
•advise the committee or disinterested directors, as applicable, as to whether the related
person transaction complies with the terms of our agreements governing our material
outstanding indebtedness that limit or restrict our ability to enter into a related person
transaction;
•advise the committee or disinterested directors, as applicable, as to whether the related
person transaction will be required to be disclosed in our SEC filings. To the extent required
to be disclosed, management must ensure that the related person transaction is disclosed in
accordance with SEC rules; and
•advise the committee or disinterested directors, as applicable, as to whether the related
person transaction constitutes a “personal loan” for purposes of Section 402 of the Sarbanes-
Oxley Act of 2002.
In addition, the related person transaction policy provides that the Compensation Committee, in
connection with any approval or ratification of a related person transaction involving a non-employee
director or director nominee, should consider whether such transaction would compromise the
director or director nominee’s status as an “independent,” “outside,” or “non-employee” director, as
applicable, under the rules and regulations of the SEC, NASDAQ and the Internal Revenue Code.
Since the beginning of fiscal 2015, there were no related party transactions that are required to
be disclosed pursuant to the SEC rules and regulations.
What is the relationship between Sirius XM and Liberty Media Corporation?
In February and March 2009, we entered into several transactions to borrow up to $530 million
from Liberty Media Corporation and its affiliates. All of these loans were repaid in cash in 2009.
As part of the transactions with Liberty Media, in February 2009, we entered into an investment
agreement (the “Investment Agreement”) with Liberty Radio, LLC, an indirect wholly-owned
subsidiary of Liberty Media. Pursuant to the Investment Agreement, we issued to Liberty Radio,
LLC 12,500,000 shares of convertible preferred stock in partial consideration for the loan
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