Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as
of September 26, 2008 (this “ Agreement ”),
between SIRIUS XM RADIO INC., a Delaware corporation (the “
Company ”), and Dara F. Altman (the “
Executive ”).
In consideration of the mutual
covenants and conditions set forth herein, the Company and the
Executive agree as follows:
1.
Employment . Subject to the terms and conditions of this
Agreement, the Company hereby employs the Executive, and the
Executive hereby accepts employment with the Company.
2.
Duties . (a) The Executive shall be employed in the capacity
of Executive Vice President and Chief Administrative Officer, which
shall include being the head of each of the Human Resources and
Facilities functions. The Executive shall perform such activities
and duties consistent with her position as the Company’s
Chief Executive Officer shall, from time to time, reasonably
specify and direct. The Executive shall not be required to perform
duties for any entity other than the Company and its
subsidiaries.
(b)
The Executive shall generally
perform her duties and conduct her business at the offices of the
Company in Washington, DC.
(c)
The Executive shall report directly to the Chief Executive Officer
of the Company.
3.
Term . The term of this Agreement shall commence on
September 26, 2008 and end on September 25, 2011, unless terminated
earlier pursuant to the provisions of Section 6 (the “
Term ”).
4.
Annual Base Salary . (a) During the Term, the Executive
shall be paid an annual base salary of $446,331.71, subject to any
increases that the Company shall approve (the “ Base
Salary ”); provided that, consistent with state
and federal law and the Company’s policies, the Company
reserves the right to (i) require that any leave, including Family
Medical Leave Act leave, be unpaid, (ii) require the Executive to
exhaust any paid leave available to the Executive, such as sick
pay, vacation or short term disability benefits, during any leave
and for any absence or inability to work due to illness, injury or
disability, and (iii) make lawful deductions from the
Executive’s salary for any period where the Executive is
unable to work or absent from work, and for which no such paid
benefits are available. All amounts paid to the Executive under
this Agreement shall be in U.S. dollars. The Base Salary shall be
paid at least monthly and, at the option of the Company, may be
paid more frequently.
(b) All compensation
paid to the Executive hereunder shall be subject to any payroll and
withholding deductions required by any applicable law, including,
without limitation, federal, state and local income tax
withholding, federal unemployment tax and social security
(FICA).
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5.
Additional Compensation, Expenses and Benefits . (a) During
the Term, the Company shall promptly reimburse the Executive for
all reasonable and necessary business expenses incurred and
advanced by her in carrying out her duties under this Agreement.
The Executive shall be entitled to fly business, or if business is
not offered on such flight first, class when traveling for business
purposes. The Executive shall present to the Company an itemized
account of such expenses in such form as may be required by the
Company from time to time.
(b)
During the Term, the Executive shall be entitled to participate, at
the same level and on the same terms, in all benefit plans,
programs and policies and fringe benefits which are made available
to the executive officers of the Company generally, including,
without limitation, medical, dental and life insurance;
provided that the Executive shall participate in any stock
option or stock purchase or compensation plan currently in effect
or subsequently established by the Company to the extent, and only
to the extent, authorized by the plan document or by the Board of
Directors of the Company (the “ Board ”) or the
Compensation Committee thereof.
(c)
During the Term, the Executive
shall be entitled to participate in any bonus plans generally
offered to employees at the same level. Bonuses are subject to
satisfaction of objectives established by the Board, and the
Compensation Committee thereof, and may be paid in the form of
cash, stock options, restricted stock, restricted stock units or
other securities of the Company. It is currently the
Company’s practice to pay any annual bonus one half in cash
and one half in restricted stock units that vest approximately one
year from the date of issue so long as the Executive remains an
employee of the Company on that date. The Executive shall not be
entitled to any guaranteed bonus, and the Executive understands
that all annual bonuses are discretionary. The Company agrees that
the Executive shall be entitled to be considered for annual
bonuses, if any, on the same basis as other senior officers of the
Company at the same level.
(d)
The Executive shall be entitled to
accrue vacation under the Company’s policy at a rate of not
less than four weeks per year.
6.
Termination . The date upon which the Executive’s
employment and this Agreement is deemed to be terminated in
accordance with any of the provisions of this Section 6 is referred
to herein as the “Termination Date.” Any reference in
this Agreement to a termination of employment of the Executive
shall mean a “separation from service” within the
meaning of Section 409A of the Internal Revenue Code of 1986, as
amended (the “ Code ”).
(a) (i) Subject to Section 6(e), the Company has
the right and may elect to terminate the Executive for Cause at any
time. For purposes of this Agreement, “Cause” means the
occurrence or existence of any of the following:
(A) the willful and continued
failure by the Executive to substantially perform the
Executive’s duties with the Company (other than any such
failure resulting from the Executive’s incapacity due to
physical or mental illness or any such actual or anticipated
failure after the issuance of a Notice of Termination for Good
Reason by the Executive) that has not been cured within 30 days
after a written demand for substantial performance is delivered to
the Executive by the Board, which demand specifically identifies
the
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manner in which the Board
believes that the Executive has not substantially performed the
Executive’s duties; or
(B) the willful
engaging by the Executive in conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily
or otherwise; or
(C) a breach by
the Executive of her duty not to engage in any transaction that
represents, directly or indirectly, self-dealing with the Company
or any of its affiliates (which, for purposes hereof, shall mean
any individual, corporation, partnership, association, limited
liability company, trust, estate, or other entity or organization
directly or indirectly controlling, controlled by, or under direct
or indirect common control with the Company) which has not been
approved by a majority of the disinterested directors of the Board,
if any such material breach remains uncured after thirty days have
elapsed following the date on which the Company gives the Executive
written notice of such breach;
(D) a breach by
the Executive of any duty referred to in clause (C) above with
respect to which at least one prior notice was given under clause
(C);
(E) any act of
dishonesty, misappropriation, embezzlement, intentional fraud, or
similar intentional misconduct by the Executive involving the
Company or any of its affiliates;
(F) the
conviction or the plea of nolo contendere or the equivalent
in respect of a felony or a misdemeanor with respect to which fraud
or dishonesty is a material element;
(G) any damage of
a material nature to any property of the Company or any of its
affiliates caused by the Executive’s willful misconduct or
gross negligence; or
(H) conduct by
the Executive that, in the reasonable good faith written
determination of the Company, demonstrates unfitness to serve as an
officer of the Company or its affiliates, including, without
limitation, (1) the repeated nonprescription use of any controlled
substance or the repeated use of alcohol or any other
non-controlled substance; or (2) a finding by the Company or any
judicial or regulatory authority that the Executive committed acts
of unlawful harassment or violated any other state, federal or
local law or ordinance prohibiting discrimination in employment
applicable to the business of the Company or any of its
subsidiaries.
Termination of the Executive for
Cause pursuant to this Section 6(a)(i) shall be communicated by a
Notice of Termination. This Agreement shall terminate on the date
specified in such Notice of Termination.
(ii)
Subject to Section 6(e), the Company shall have the absolute right
to terminate the Executive’s employment without Cause at any
time. If the Company elects to terminate the Executive without
Cause, the Company shall give seven days written notice to the
Executive. This Agreement shall terminate seven days following
receipt of such notice by the Executive, however, the Company, at
its sole discretion may request that the Executive cease
active
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employment and perform no more
job duties immediately upon provision of such notice to the
Executive.
(b) This Agreement and the Executive’s
employment hereunder shall terminate upon the death of the
Executive.
(c) If the Executive is unable to perform the
essential duties and functions of her position because of a
disability, even with a reasonable accommodation, for one hundred
eighty days within any three hundred sixty-five day period, and the
Company, in its reasonable judgment, determines that the exigencies
created by the Executive’s disability are such that
termination is warranted, the Company shall have the right and may
elect to terminate the services of the Executive by a Notice of
Disability Termination. For purposes of this Agreement, a
“Notice of Disability Termination” shall mean a written
notice which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under this Section 6(c). For purposes
of this Agreement, no such purported termination by the Company
shall be effective without such Notice of Disability Termination.
This Agreement shall terminate on the day after such Notice of
Disability Termination is received by the Executive.
(d) (i) The Executive shall have the right, and may
elect, to resign for Good Reason. Good Reason shall mean the
occurrence (without the Executive’s express written consent
referencing this Agreement) of any of the following acts or
failures to act:
(A)
the assignment to the Executive of any duties not reasonably
consistent with the Executive’s status as an executive
officer of the Company and as Executive Vice President and Chief
Administrative Officer; or
(B) a
substantial adverse alteration in the Executive’s title or in
the nature or status of the Executive’s responsibilities from
those in effect immediately prior to the event or occurrence
constituting Good Reason; or
(C) a
change in the Executive’s line of reporting to a position
other than the Company’s Chief Executive Officer;
or
(D) a reduction in the Base Salary;
or
(E)
the relocation of the Executive’s principal place of
employment to a location more than 35 miles from the
Executive’s principal place of employment as of the date of
this Agreement or the Company’s requiring the Executive to be
based anywhere other than such principal place of employment (or
permitted relocation thereof), except for required travel on the
Company’s business to an extent substantially consistent with
the Executive’s present business travel obligations;
or
(F)
any failure by the Company to pay to the Executive any portion of
the Base Salary or any annual bonus when due; or
(G)
any failure of the Company to comply with the terms of Section 5(b)
as it relates to the Executive’s annual bonuses, if any;
or
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(H)
any material breach by the Company of any provision of this
Agreement.
In no event will the Executive
have reason to terminate employment for Good Reason unless the act
or failure to act which constituted the Good Reason event or
occurrence has not been cured within 30 days after a Notice of
Termination for Good Reason is delivered by the Executive to the
Company. The Executive’s right to terminate the
Executive’s employment for Good Reason shall not be affected
by the Executive’s incapacity due to physical or mental
illness. The Executive’s continued employment shall not
constitute consent to, or a waiver or rights with respect to, any
act or failure to act constituting Good Reason hereunder;
provided that the Executive provides the Company a written
notice of Termination for Good Reason within ninety (90) days
following the occurrence of the event. At its sole discretion, the
Company may request that the Executive perform no job
responsibilities and cease her active employment immediately upon
receipt of the notice.
(ii)
The Executive shall have the absolute right, and may elect, to
resign without Good Reason at any time. The Executive shall give
fourteen days prior written notice to the Company. Failure to
provide such notice shall entitle the Company to terminate this
Agreement effective on the last business day on which the Executive
reported for work at her principal place of employment with the
Company. This Agreement will terminate on the effective date of the
resignation as defined above, however, the Company may, at its sole
discretion, request that the Executive perform no job
responsibilities and cease her active employment immediately upon
receipt of the notice.
(e) (i) Subject to execution by the Executive of
the release required by Section (e)(v) below, if the employment of
the Executive is terminated without Cause or the Executive resigns
for Good Reason before the end of the Term then the Executive shall
have the right to receive, and the Company shall pay to the
Executive without setoff, counter claim or other withholding,
except as set forth in Section 4(b), an amount (in addition to any
salary, benefits or others sums earned and due to the Executive
through the Termination Date) equal to the following:
(A) In lieu of any further salary
payments to the Executive for periods subsequent to the Termination
Date and in lieu of any severance benefit otherwise payable to the
Executive, the Company shall pay to the Executive a lump sum
severance payment, in cash, equal to two times the sum of (1) the
Executive’s annualized base salary as in effect immediately
prior to the Termination Date or, if higher, in effect immediately
prior to the first occurrence of an event or circumstance
constituting Good Reason, and (2) the higher of (a) the last annual
bonus actually paid to the Executive and (b) fifty-five percent
(55%) of the Executive’s base salary as in effect immediately
prior to the Termination Date or, if higher, in effect immediately
prior to the first occurrence of an event or circumstance
constituting Good Reason.
(B) (1) For the twenty-four (24)
month period immediately following the Termination Date, the
Company shall arrange to provide the Executive and her dependents
health, medical, dental, disability and similar health insurance
benefits substantially similar to those provided to the Executive
and her dependents immediately prior to the Termination Date or, if
more favorable to the Executive, those provided to the
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Executive and her dependents
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater after-tax cost
to the Executive than the after-tax cost to the Executive
immediately prior to such date or occurrence; provided that,
unless the Executive consents to a different method, such health
insurance benefits shall be provided through a third-party insurer,
including if available, through a third-party insurer pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985.
Benefits otherwise receivable by the Executive pursuant to this
Section 6(e)(i)(B) shall be reduced to the extent benefits of the
same type are received by or made available to the Executive during
the twenty-four (24) month period following the Executive’s
termination of employment (and any such benefits received by or
made available to the Executive shall be reported to the Company by
the Executive); provided , that the Company shall reimburse
the Executive for the excess, if any, of the after-tax cost of such
benefits to the Executive over such cost immediately prior to the
Termination Date or, if more favorable to the Executive, the first
occurrence of an event or circumstance constituting Good Reason.
Amounts eligible for reimbursement to the Executive in one taxable
year may not affect the amounts eligible for reimbursement in any
other taxable year.
(2) If, during the time the
Executive is receiving benefits pursuant to Section 6(e)(i)(B)(1),
benefits of the same type are received by or made available to the
Executive, the Executive agrees to notify the Company of this fact
in writing within ten (10) days of the date such benefits are
received or made available. The Executive further agrees to provide
the Company with all reasonably requested information necessary to
offset such benefits.
(C) Notwithstanding any provision
of any annual or long term incentive plan to the contrary, the
Company shall pay to the Executive a lump sum amount, in cash,
equal to the sum of (i) any unpaid incentive compensation which has
been allocated or awarded to the Executive for a completed fiscal
year or other measuring period preceding the Date of Termination
under any such plan and which, as of the Date of Termination, is
contingent only upon the continued employment of the Executive to a
subsequent date, and (ii) a pro rata portion to the Termination
Date of the aggregate value of any contingent cash incentive
compensation awards to the Executive for all then uncompleted
periods under any such plan, calculated as to each such award by
multiplying the award that the Executive would have earned on the
last day of the performance award period, assuming the achievement,
at the target level, of the individual and corporate performance
goals established with respect to such award, by the fraction
obtained by dividing the number of full months and any fractional
portion of a month during such performance award period through the
Termination Date by the total number of months contained in such
performance award period. For purposes of this Section 6(e)(C), the
target level shall be the higher of (a) the last annual bonus
actually paid to the Executive and (b) fifty-five percent (55%) of
the Executive’s base salary as in effect immediately prior to
the Termination Date or, if higher, in effect immediately prior to
the date when either the Executive is terminated without Cause or
the first occurrence of an event or circumstance constituting Good
Reason.
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(D) The Company shall provide the
Executive with outplacement services suitable to the
Executive’s position for a period of two years or, if
earlier, until the first acceptance by the Executive of an offer of
employment.
(E) As of the Termination Date, all
restrictions relating to the sale or disposal of restricted shares
of common stock granted to the Executive on March 14, 2006, as set
forth in a letter agreement between XM and the Executive dated May
18, 2006, shall lapse notwithstanding anything to the contrary
contained in the award agreement, letter agreement or otherwise. If
the employment of the Executive is terminated by the Company
without Cause or by the Executive for Good Reason, all options to
purchase the Company’s common stock, restricted stock units
or restricted shares of common stock issued by the Company to the
Executive that are held by the Executive on the Termination Date
shall immediately vest. Any such vested stock options shall expire
90 days following the Termination Date.
(ii) This Agreement shall be interpreted in a manner
consistent with the Parties’ intention that payments and
benefits hereunder qualify for exemption from, or comply with the
requirements of, Section 409A of the Code. Notwithstanding any
other provisions of this Agreement, to the extent required in order
to avoid accelerated taxation and/or tax penalties under Section
409A of the Code, amounts that would otherwise be payable and
benefits that would otherwise be provided pursuant to this Section
during the six-month period immediately following the Termination
Date shall instead be paid on the first business day after the date
that is six months following the Executive’s
“separation from service” with
