Exhibit 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as
of September 26, 2008 (this “ Agreement ”),
between SIRIUS XM RADIO INC., a Delaware corporation (the “
Company ”), and James J. Rhyu (the “
Employee ”).
In consideration of the mutual
covenants and conditions set forth herein, the Company and the
Employee agree as follows:
1.
Employment . Subject to the terms and conditions of this
Agreement, the Company hereby employs the Employee, and the
Employee hereby accepts employment with the Company.
2.
Duties . (a) The Employee shall be employed in the capacity
of Senior Vice President and Chief Accounting Officer of the
Company. The Employee shall perform such activities and duties as
the Company shall, from time to time, reasonably specify and
direct.
(b)
The Employee shall generally perform his duties and conduct his
business at the offices of the Company in Washington,
DC.
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 Employee shall
be paid an annual base salary of $325,000 (the “ Base
Salary ”), subject to any increases that the Company
shall approve; 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 Employee to exhaust
any paid leave available to the Employee, 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
Employee’s salary for any period where the Employee is unable
to work or absent from work, and for which no such paid benefits
are available. All amounts paid to the Employee 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 Employee 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).
5.
Additional Compensation, Expenses and Benefits . (a) During
the Term, the Company shall reimburse the Employee for all
reasonable and necessary business expenses incurred and advanced by
him in carrying out his duties under this Agreement. The Employee
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.
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(b)
During the Term, the Employee shall be entitled to participate in
any benefit plans, programs and policies which may be made
available to the officers of the Company generally, including,
without limitation, medical, dental and life insurance;
provided that the Employee 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 Employee 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 Employee remains an employee of the Company on that
date. The Employee shall not be entitled to any guaranteed
bonus.
(d)
The Employee shall be entitled to carry forward any unused vacation
balance he has accrued while an employee of XM Satellite Radio Inc.
as of the date of this Agreement to the same extent that other
employees of XM Satellite Radio Inc. are entitled to carry forward
unused vacation days.
6.
Termination . The date upon which 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.”
(a)
The Company has the right and may elect to terminate the Employee
for Cause at any time. For purposes of this Agreement,
“Cause” means the occurrence or existence of any of the
following:
(i) a
breach by the Employee of (A) the terms of this Agreement or (B)
his 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 described in clause (A) or clause (B) remains
uncured after thirty days have elapsed following the date on which
the Company gives the Employee written notice of such
breach;
(ii)
a breach by the Employee of any duty referred to in clause (i)
above with respect to which at least one prior notice was given
under clause (i);
(iii)
any act of dishonesty, misappropriation, embezzlement, intentional
fraud, or similar intentional misconduct by the Employee involving
the Company or any of its affiliates;
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(iv) 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;
(v) any damage of a material nature to any property
of the Company or any of its affiliates caused by the
Employee’s willful misconduct or gross negligence;
(vi) the Employee’s failure to comply with (A)
the policies and procedures of the Company in effect from time to
time, other than inadvertent failures which do not have an adverse
effect on the Company; or (B) the Company’s reasonable
written instructions within five days after delivery to the
Employee of such written instructions; or
(vii) conduct by the Employee 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, (A) the repeated nonprescription use
of any controlled substance or the repeated use of alcohol or any
other non-controlled substance; or (B) a finding by the Company or
any judicial or regulatory authority that the Employee 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 operating
subsidiaries.
Termination of the Employee for
Cause pursuant to this Section 6(a) shall be communicated by a
Notice of Termination. This Agreement shall terminate on the date
specified in such Notice of Termination.
(b) (i) This Agreement and the Employee’s
employment hereunder shall terminate upon the death of the
Employee.
(ii) If the Employee is unable to perform the
essential duties and functions of his 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 Employee’s disability are such that
termination is warranted, the Company shall have the right and may
elect to terminate the services of the Employee 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
Employee’s employment under this Section 6(b)(ii). 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
Employee.
(c) (i) If the Employee resigns for Good Reason on
or before July 27, 2009, the Employee will be entitled to the
benefits set forth in Section 6(e). Good Reason shall mean the
occurrence (without the Employee’s written consent
referencing this Agreement) of any of the following acts or
failures to act by the Company:
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(A)
the assignment to the Employee of any duties inconsistent with the
Employee’s status as Chief Accounting Officer of the
Company;
(B)
a substantial adverse alteration in
the Employee’s title or in the nature or status of the
Employee’s responsibilities; provided that any such
alteration shall not constitute Good Reason if the scope of the
Employee’s duties is substantially expanded by reason of an
increase in the Company’s size;
(C)
a reduction by the Company in the
Base Salary or as the same may be increased from time to
time;
(D)
the relocation of the Employee’s principal place of
employment to a location more than 35 miles from the
Employee’s principal place of employment as of the date of
this Agreement or the Company’s requiring the Employee 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 Employee’s business travel obligations; or
(E)
the failure by the Company to pay to the Employee any portion of
the Base Salary or annual bonus when due.
In no event will the Employee
have reason to terminate employment for Good Reason unless such act
or failure to act results in a material negative change to the
Employee’s employment that has not been cured within 30 days
after a Notice of Termination for Good Reason is delivered by the
Employee to the Company. The Employer’s right to terminate
the Employee’s employment for Good Reason shall not be
affected by the Employee’s incapacity due to physical or
mental illness. The Employee’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 Employee provides the Company a written
notice of Termination for Good Reason within ninety (90) days
following the occurrence of the event or July 27, 2009, whichever
occurs earlier.
(ii)
Should the Employee wish to resign from his position with the
Company during the Term, but after July 27, 2009, the Employee
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 Employee reported for work at his principal place of
employment with the Company. The Agreement will terminate on the
effective date of the resignation as defined above, however, the
Company may, at its sole discretion, request that the Employee
perform no job responsibilities and cease his active employment
immediately upon receipt of the notice.
(d)
The Company shall have the absolute right to terminate the
Employee’s employment without Cause at any time. If the
Company elects to terminate the Employee without Cause, the Company
shall give seven days written notice to the Employee. This
Agreement shall terminate seven days following receipt of such
notice by the Employee,
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however, the Company, at its
sole discretion may request that the Employee cease active
employment and perform no more job duties immediately upon
provision of such notice to the Employee.
(e) (i) If the employment of the Employee is
terminated without Cause or the Employee resigns for Good Reason on
or before July 27, 2009:
(A)
In lieu of any further salary
payments to the Employee for periods subsequent to the Termination
Date and in lieu of any severance benefit otherwise payable to the
Employee, the Company shall pay to the Employee a lump sum
severance payment, in cash, equal to two times the sum of (1) the
Employee’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, and (2) the Employee’s target annual bonus under any
annual bonus or incentive plan maintained by the Company in respect
of the fiscal year in which occurs the Termination Date or, if
higher, the fiscal year in which the first event or circumstance
constituting Good Reason occurred.
(B)
For the twenty-four (24) month
period immediately following the Termination Date, the Company
shall arrange to provide the Employee and his dependents health,
medical, dental, and similar health insurance benefits
substantially similar to those provided to the Employee and his
dependents immediately prior to the Termination Date or, if more
favorable to the Employee, those provided to the Employee and his
dependents immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater after-tax cost
to the Employee than the after-tax cost to the Employee immediately
prior to such date or occurrence; provided that, unless the
Employee consents to a different method, such health insurance
benefits shall be provided through a third-party insurer. Benefits
otherwise receivable by the Employee 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 Employee during the
twenty-four (24) month period following the Employee’s
termination of employment (and any such benefits received by or
made available to the Employee shall be reported to the Company by
the Employee); provided , that the Company shall reimburse
the Employee for the excess, if any, of the after-tax cost of such
benefits to the Employee over such cost immediately prior to the
Termination Date or, if more favorable to the Employee, the first
occurrence of an event or circumstance constituting Good Reason.
Amounts reimbursed to the Employee in one taxable year may not
affect the amounts eligible for reimbursement in any other taxable
year.
(C)
Notwithstanding any provision of any annual or long term incentive
plan to the contrary, the Company shall pay to the Employee a lump
sum amount, in cash, equal to the sum of (1) any unpaid incentive
compensation which has been allocated or awarded to the Employee
for a completed fiscal year or other measuring period preceding the
Termination Date under any such plan and which, as of the
Termination Date, is contingent only upon the continued employment
of the Employee to a subsequent date, and (2) a pro rata portion to
the Termination Date of the aggregate value of all contingent cash
incentive compensation awards to the Employee for all
then
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uncompleted periods under any
such plan, calculated as to each
