XM Radio 2015 Annual Report Download - page 53

Potential Payments or Benefits Upon Termination or Change in Control
Employment Agreements
We have entered into employment agreements with each of our named executive officers that
contain provisions regarding payments or benefits upon a termination of employment. We do not
have any provisions in any of our employment agreements for the named executive officers that
provide for any payments solely in the event of a change in control.
None of the employment agreements with our named executive officers provides for a so-called
“golden parachute” excise tax gross up. Each of the employment agreements with our executive
officers includes a compensation clawback provision, pursuant to which any incentive-based or
other compensation paid to an executive officer by us or any of our affiliates is subject to
deductions and clawback as required by applicable law, regulation or stock exchange listing
requirement.
James E. Meyer
In August 2015, we entered into a new employment agreement with Mr. Meyer to continue to
serve as our Chief Executive Officer through April 30, 2018. The employment agreement provides
for an increase in Mr. Meyer’s base salary from $1,550,000 to $1,800,000, subject to increases
approved by the Compensation Committee, and obligates us to offer Mr. Meyer a three-year
consulting agreement upon the expiration of his employment agreement on April 30, 2018.
Mr. Meyer is also entitled to participate in any bonus plans generally offered to our executive
officers, with an annual target bonus opportunity of 250% of his annual base salary.
If Mr. Meyer’s employment is terminated by us without “cause” or he terminates his
employment for “good reason” (each as described in his employment agreement), then, subject to
his execution of a release of claims and his compliance with certain restrictive covenants, we are
obligated to (i) continue his health benefits for eighteen months and his life insurance benefits for
one year, (ii) pay him a lump sum equal to his annual base salary plus the amount of $6,600,000,
as consideration for a loss of three-year consulting agreement, and (iii) pay him a lump sum equal
to the greater of (x) a bonus equal to 60% of his then annual base salary or (y) the prior year’s
bonus actually paid to him. We are also obligated to pay Mr. Meyer any earned but unpaid bonus
for the year prior to the year of his termination, and a prorated bonus for the year in which his
employment is terminated. Further, Mr. Meyer’s equity awards are subject to accelerated vesting.
David J. Frear
In July 2015, we entered into a new employment agreement with David J. Frear to continue to
serve as our Senior Executive Vice President and Chief Financial Officer through May 31, 2018.
The employment agreement provides for an annual base salary of $1,200,000, subject to increases
approved by the Compensation Committee. Mr. Frear is also entitled to participate in any bonus
plans generally offered to our executive officers.
If Mr. Frear’s employment is terminated by us without “cause” or he terminates his employment
for “good reason” (each as described in his employment agreement), subject to his execution of a
release of claims, we are obligated to pay him a lump sum equal to his annual salary as of the
date of the termination and the cash value of the bonus last paid or payable to him in respect of
the preceding calendar year and to continue his health and life insurance benefits for one year.
Further, Mr. Fear’s equity awards are subject to accelerated vesting.
Dara F. Altman
In June 2015, we entered into a new employment agreement with Dara F. Altman to continue
to serve as our Executive Vice President and Chief Administrative Officer through June 18, 2018.
The agreement provides for an annual base salary of $600,000, subject to increases approved by
the Compensation Committee. Ms. Altman is also entitled to participate in any bonus plans
generally offered to our executive officers.
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