XM Radio 2015 Annual Report Download - page 47

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Compensation Plan to be an important benefit to participants, it is not included in any quantitative
valuation with respect to the three main components of our executive compensation packages,
because participation in the Deferred Compensation Plan, and to what extent, is at each
participant’s discretion and there is no matching contribution from us at this time.
Pursuant to the Deferred Compensation Plan, eligible employees may elect to defer up to (i)
50% of his or her cash-paid base salary; and (ii) 75% of his or her annual cash bonus. We may
elect to make additional contributions beyond amounts deferred by participants, but we are under
no obligation to do so. At the time of making a deferral election, participants designate the time and
form of the distribution of deferrals to be made for the year to which that election relates.
Distributions may occur earlier upon a change in control or a termination of employment, subject to
certain conditions provided for under the Deferred Compensation Plan and Section 409A of the
Internal Revenue Code. Participants have the opportunity to designate the investment funds to
which the deferred amounts are to be credited. All investment gains and losses in a participant’s
account under the Deferred Compensation Plan are entirely based upon the investment selections
made by the participant. We have established a grantor (or “rabbi”) trust to facilitate payment of our
obligations under the Deferred Compensation Plan.
The contributions, earnings and account balances for the named executive officers in the
Deferred Compensation Plan are described in the “Non-Qualified Deferred Compensation” table.
Perquisites and Other Benefits for Named Executive Officers
The Compensation Committee supports providing other benefits to named executive officers
that are almost identical to those offered to our other full time employees and are provided to
similarly situated executives at companies with which we compete for executive talent.
In limited circumstances, a named executive officer may receive certain tailored benefits. For
example, in 2015, Mr. Cady, due to his principal residence being in the State of Oregon, was
reimbursed for the reasonable costs of coach class airfare from his home to our various offices,
along with reasonable hotel and meal expenses. The costs of these benefits for Mr. Cady
constituted less than 10% of his compensation in 2015.
Payments to Named Executive Officers Upon Termination or Change in Control
The employment agreements with our named executive officers provide for severance
payments upon an involuntary termination of employment without “cause” or for “good reason” (as
each term is defined in their employment agreement). These arrangements vary among executives
due to individual negotiations. The material terms of these arrangements are described under
“Potential Payments or Benefits Upon Termination or Change in Control—Employment Agreements.”
None of the employment agreements for the named executive officers provide for any special
payments solely due to a change in control. Under the terms of both the Sirius XM Radio Inc. 2009
Long-Term Stock Incentive Plan and the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive
Plan (collectively, the “Plans”), if the employment of any of our named executive officers is
terminated by us without cause, or by the executive for good reason, within two years following a
change in control, then in accordance with the Plans, their equity awards are subject to accelerated
vesting.
We believe that these severance arrangements mitigate some of the risk that exists for
executives working in our highly competitive industry. These arrangements are intended to attract
and retain qualified executives who could have other job alternatives that may appear to them, in
the absence of these arrangements, to be less risky, and such arrangements allow the executives
to focus exclusively on our interests.
Fiscal Year 2016 Compensation Considerations
The Compensation Committee plans to review our executive compensation program in 2016
with a view to ensuring that it continues to provide the correct incentives and is properly sized
given the scope and complexity of our business and the competition we face.
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