Exhibit 10.1
EMPLOYMENT
AGREEMENT
EMPLOYMENT AGREEMENT, dated as of
July 28, 2009 (this “ Agreement ”), between
SIRIUS XM RADIO INC., a Delaware corporation (the “
Company ”), and SCOTT A. GREENSTEIN (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 agrees to continue
his employment with the Company.
2. Duties and Reporting
Relationship . (a) The Executive shall be employed in the
capacity of President and Chief Content Officer of the Company. In
such capacity, the Executive shall be responsible for management of
all aspects of the Company’s programming and corporate brand
marketing functions and all personnel working in such areas shall
report to the Executive. During the Term (as defined below), the
Executive shall, on a full-time basis and consistent with the needs
of the Company, use his skills and render services to the best of
his ability. The Executive shall perform such activities and duties
consistent with his position as the Chief Executive Officer of the
Company shall from time to time reasonably specify and direct.
During the Term, the Executive shall not perform any consulting
services for, or engage in any other business enterprises with, any
third parties without the express written consent of the Chief
Executive Officer of the Company or the General Counsel of the
Company, other than passive investments.
(b) The Executive shall generally
perform his duties and conduct his business at the principal
offices of the Company in New York, New York.
(c) The Executive shall report
solely to the Chief Executive Officer of the Company.
3. Term . The term of this
Agreement shall commence on July 28, 2009 (the “ Effective
Date ”) and end on July 27, 2013, unless terminated
earlier pursuant to the provisions of Section 6 (the “
Term ”).
4. Compensation . (a)
During the Term, the Executive shall be paid an annual base salary
of $850,000; provided that on (i) January 1, 2010 such
annual base salary shall be increased to no less than $925,000,
(ii) January 1, 2011 such annual base salary shall be increased to
no less than $1,000,000, (iii) January 1, 2012 such annual base
salary shall be increased to no less than $1,100,000, (iv) January
1, 2013 such annual base salary shall be increased to no less than
$1,250,000, and (v) thereafter may be subject to increase from time
to time by recommendation of the Chief Executive Officer of the
Company to, and approval by, the
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Board of Directors of the Company (the “ Board
”) (such amount, as increased, the “ Base
Salary ”). 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) On the date hereof, the
Company shall grant to the Executive an option to purchase
27,768,136 shares of the Company’s common stock, par value
$.001 per share (the “ Common Stock ”), at an
exercise price of $0.43 per share, the closing price of the Common
Stock on the Nasdaq Global Select Market on the date hereof. Such
options shall be subject to the terms and conditions set forth in
the Option Agreement attached to this Agreement as Exhibit A.
(c) All compensation paid to the
Executive hereunder shall be subject to any payroll and withholding
deductions required by applicable law, including, as and where
applicable, federal, New York state and New York City 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 Executive for all reasonable and necessary business
expenses incurred and advanced by him in carrying out his duties
under this Agreement. The Executive shall present to the Company an
itemized account of all 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 fully in any other benefit plans,
programs, policies and fringe benefits which may be made available
to the executive officers of the Company generally, including,
without limitation, disability, medical, dental and life insurance
and benefits under the Company’s 401(k) savings plan.
(c) During the Term, the Executive
shall be entitled to participate in any bonus plans generally
offered to executive officers of the Company. Bonuses may be
subject to the Executive’s individual performance and
satisfaction of objectives established by the Board or the
compensation committee thereof (the “ Compensation
Committee ”). Bonuses may be paid in the form of cash,
stock options, restricted stock, restricted stock units or other
securities of the Company.
6. Termination . The date
upon which the Executive’s employment with the Company under
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 termination of
employment shall not be deemed to have occurred for purposes of any
provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment
unless such termination also constitutes a “separation from
service” within the meaning of Section 409A (“
Section 409A ”) of the Internal Revenue Code of 1986,
as amended (the “ Code ”), and the regulations
thereunder (a “ Separation from Service ”), and
notwithstanding anything contained herein to the contrary, the date
on which a Separation from Service takes place shall be the
Termination Date.
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(a) The Company has the right and
may elect to terminate this Agreement for Cause at any time. For
purposes of this Agreement, “ Cause ” means the
occurrence or existence of any of the following:
(i) (A)
a material breach by the Executive of the terms of this Agreement,
(B) a material breach by the Executive of the Executive’s
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, or (C) the
Executive’s violation of the Company’s Code of Ethics
which is demonstrably and materially injurious to the Company, if
any such material breach or violation described in clauses (A), (B)
or (C), to the extent curable, remains uncured after 15 days have
elapsed following the date on which the Company gives the Executive
written notice of such material breach or violation;
(ii)
the Executive’s act of dishonesty, misappropriation,
embezzlement, intentional fraud, or similar intentional misconduct
by the Executive involving the Company or any of its
affiliates;
(iii)
the Executive’s conviction or the plea of nolo
contendere or the equivalent in respect of a felony;
(iv)
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;
(v) the
repeated nonprescription use of any controlled substance or the
repeated use of alcohol or any other non-controlled substance that,
in the reasonable good faith opinion of the Board, renders the
Executive unfit to serve as an officer of the Company or its
affiliates;
(vi)
the Executive’s failure to comply with the Chief Executive
Officer’s reasonable written instructions on a material
matter within 5 days; or
(vii)
conduct by the Executive that in the reasonable good faith written
determination of the Board demonstrates unfitness to serve as an
officer of the Company or its affiliates, including a finding by
the Board 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.
Termination of the Executive for Cause pursuant to this Section
6(a) shall be communicated by a Notice of Termination for Cause.
For purposes of this Agreement, a “ Notice of Termination
for Cause ” shall mean delivery to the Executive
of a copy of a resolution or resolutions duly adopted by the
affirmative vote of not less than a majority of the directors
(other than the Executive, if the Executive is then serving on the
Board) present (in person or by teleconference) and voting at a
meeting of the Board called and held for that purpose after 15
days’ notice to the Executive (which notice the Company shall
use reasonable efforts to confirm that Executive has actually
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received and which notice for purposes of this Section 6(a) may
be delivered, in addition to the requirements set forth in Section
17, through the use of electronic mail) and a reasonable
opportunity for the Executive, together with the Executive’s
counsel, to be heard before the Board prior to such vote, finding
that in the good faith opinion of the Board, the Executive was
guilty of conduct set forth in any of clauses (i) through (vii) of
this Section 6(a) and specifying the particulars thereof in
reasonable detail. For purposes of this Section 6(a), this
Agreement shall terminate on the date specified by the Board in the
Notice of Termination for Cause.
(b) (i) This Agreement and the
Executive’s employment shall terminate upon the death of the
Executive.
(ii) If the Executive 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
(“ Disability ”), the Company shall have the
right and may elect to terminate the services of the Executive by a
Notice of Disability Termination. The Executive shall not be
terminated following a Disability except pursuant to this Section
6(b)(ii). For purposes of this Agreement, a “ Notice of
Disability Termination ” shall mean a written notice that
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(b)(ii). For purposes of this
Agreement, no such purported termination shall be effective without
such Notice of Disability Termination. This Agreement shall
terminate on the day such Notice of Disability Termination is
received by the Executive.
(c) The Executive shall have the
absolute right to terminate his employment at any time with or
without Good Reason. Should the Executive wish to resign from his
position with the Company during the Term, for other than Good
Reason (as defined below), the Executive shall give at least
fourteen days prior written notice to the Company. This Agreement
shall terminate on the effective date of the resignation set forth
in the notice of resignation, however, the Company may, at its sole
discretion, instruct that the Executive perform no job
responsibilities and cease his active employment immediately upon
receipt of the notice from the Executive.
(d) The Company shall have the
absolute right to terminate the Executive’s employment
without Cause at any time. This Agreement shall terminate one day
following receipt of such notice by the Executive, however, the
Company may, at its sole discretion, instruct that the Executive
cease active employment and perform no more job duties immediately
upon provision of such notice to the Executive.
(e) Should the Executive wish to
resign from his position with the Company for Good Reason during
the Term, the Executive shall give seven days prior written notice
to the Company. This Agreement shall terminate on the date
specified in such notice, however, the Company may, at its sole
discretion, instruct that the Executive cease active employment and
perform no more job duties immediately upon receipt of such notice
from the Executive.
For purposes of this Agreement,
“ Good Reason ” shall mean the continuance of
any of the following events (without the Executive’s prior
written consent) for a period of thirty days after delivery to the
Company by the Executive of a notice of the occurrence of such
event:
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(i) the
assignment to the Executive by the Company of duties not reasonably
consistent with the Executive’s positions, duties,
responsibilities, titles or offices at the commencement of the
Term, any material reduction in the Executive’s duties or
responsibilities as described in Section 2 or any removal of the
Executive from or any failure to re-elect the Executive to any of
such positions or the Executive not being the most senior
executive, other than the Company’s Chief Executive Officer,
who is responsible for all programming and corporate brand
marketing activities and personnel (except in connection with the
termination of the Executive’s employment for Cause,
Disability or as a result of the Executive’s death or by the
Executive other than for Good Reason); or
(ii)
the Executive ceasing to report directly to the Chief Executive
Officer of the Company; or
(iii)
any requirement that the Executive report for work to a location
more than 25 miles from the Company’s current headquarters
for more than 30 days in any calendar year, excluding any
requirement that results from the damage or destruction of the
Company’s current headquarters as a result of natural
disasters, terrorism, acts of war or acts of God; or
(iv)
any reduction in the Base Salary; or
(v) the
Company’s failure to make a bona fide offer in writing
to renew this Agreement, for an additional one-year term, on the
terms and conditions set forth in this Agreement (including the
Base Salary set forth in Section 4(a), but excluding any
equity–based compensation set forth in Section 4(b)), at
least 90 days prior to (x) the fourth anniversary of the Effective
Date and (y) each subsequent anniversary of the Effective Date
following the fourth anniversary of the Effective Date;
provided that (for purposes of this clause (y) only) this
Agreement has been renewed on the previous anniversary of the
Effective Date; or
(vi)
any material breach by the Company of this Agreement.
(f) (i) If the employment of the
Executive is terminated by the Company for Cause, by the Executive
other than for Good Reason or due to death or Disability, the
Executive shall, in lieu of any future payments or benefits under
this Agreement, be entitled to (A) any earned but unpaid Base
Salary and any business expenses incurred but not reimbursed, in
each case, prior to the Termination Date and (B) any other vested
benefits under any other benefit plans or programs in accordance
with the terms of such plans and programs (collectively, the
“ Accrued Payments and Benefits ”).
(ii) If the employment of the
Executive is terminated without Cause or the Executive terminates
his employment for Good Reason, then the Executive shall have an
absolute and unconditional right to receive, and the Company shall
pay to the Executive without setoff, counterclaim or other
withholding, except as set forth in Section 4(c), (A) the Accrued
Payments and Benefits, (B) a lump sum amount equal to the sum of
(x) the Executive’s annualized Base Salary then in effect and
(y) an amount in cash equal to the bonus, whether
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denominated as an annual, performance, incentive, retention or
other bonus, last paid (or due and payable) to the Executive in
respect of the fiscal year immediately preceding the year in which
the Termination Date occurs, and (C) the continuation, at the
Company’s expense (by direct payment, not reimbursement to
the Executive) of (1) medical and dental benefits in a manner that
will not be taxable to the Executive and (2) life insurance
benefits, on the same terms as provided by the Company for active
employees for one year following the Termination Date. The lump sum
amount contemplated by clause (B) above shall be paid on the 60
th day following the Termination Date.
(g) The Company’s
obligations under Section 6(f)(ii) shall be conditioned upon the
Executive executing, delivering, and not revoking during the seven
day revocation period a waiver and release of claims against the
Company, substantially in the form attached as Exhibit B (the
“ Release ”) within 60 days following the
Termination Date; provided that the Executive shall have no
obligation to execute such Release in order to receive the payments
and benefits under Section 6(f)(ii) in the event that a Release
executed by the Company has not been delivered by the Company to
the Executive within five days following the Termination Date.
(h) Notwithstanding any provisions
of this Agreement to the contrary, if the Executive is a
“specified employee” (within the meaning of Section
409A and determined pursuant to policies adopted by the Company) at
the time of his Separation from Service and if any portion of the
payments or benefits to be received by the Executive upon
Separation from Service would be considered deferred compensation
under Section 409A (“ Nonqualified Deferred
Compensation ”), amounts that would otherwise be payable
pursuant to this Agreement during the six-month period immediately
following the Executive’s Separation from Service that
constitute Nonqualified Deferred Compensation and benefits that
would otherwise be provided pursuant to this Agreement during the
six-month period immediately following the Executive’s
Separation from Service that constitute Nonqualified Deferred
Compensation will instead be paid or made available on the earlier
of (x) the first business day of the seventh month following the
date of the Executive’s Separation from Service and (y) the
Executive’s death.
7. Nondisclosure of
Confidential Information . (a) The Executive acknowledges that
in the course of his employment he will occupy a position of trust
and confidence. The Executive shall not, except in connection with
the performance of his functions or as required by applicable law,
disclose to others or use, directly or indirectly, any Confidential
Information.
(b) “ Confidential
Information ” shall mean information about the
Company’s business and operations that is not disclosed by
the Company for financial reporting purposes and that was learned
by the Executive in the course of his employment by the Company,
including, without limitation, any business plans, product plans,
strategy, budget information, proprietary knowledge, patents, trade
secrets, data, formulae, sketches, notebooks, blueprints,
information and client and customer lists and all papers and
records (including computer records) of the documents containing
such Confidential Information, other than information that is
publicly disclosed by the Company in writing. The Executive
acknowledges that such Confidential Information is specialized,
unique in nature and of great value to the Company, and that such
information gives the Company a competitive advantage. The
Executive agrees to deliver or return to the Company, at the
Company’s request at any time or upon termination or
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expiration of his employment or as soon as possible thereafter,
all documents, computer tapes and disks, records, lists, data,
drawings, prints, notes and written information (and all copies
thereof) furnished by or on behalf of the Company or prepared by
the Executive in the course of his employment by the Company,
provided that the Executive will be able to keep his cell phones,
blackberries, personal computers, personal rolodex and the like so
long as any Confidential Information is removed from such
items.
(c) The provisions of this
Section 7 shall survive indefinitely.
8. Covenant Not to Compete
. During the Restricted Period (as defined below), the Executive
shall not, directly or indirectly, enter into the employment of,
render services to, or acquire any interest whatsoever in (whether
for his own account as an individual proprietor, or as a partner,
associate, stockholder, officer, director, consultant, trustee or
otherwise), or otherwise assist, any person or entity engaged in
any operations in North America involving the transmission of radio
entertainment programming, the production of radio entertainment
programming, the syndication of radio entertainment programming,
the promotion of radio entertainment programming or the marketing
of radio entertainment programming, in each case, in competition
with the Company (each, a “ Competitive Activity
”); provided that nothing in this Agreement shall
prevent the purchase or ownership by the Executive by way of
investment of less than five percent of the shares or equity
interest of any corporation or other entity. Without limiting the
generality of the foregoing, the Executive agrees that during the
Restricted Period, the Executive shall not call on or otherwise
solicit business or assist others to solicit business from any of
the customers of the Company as to any product or service described
above that competes with any product or service provided or
marketed by the Company on the date of the Executive’s
termination of employment with the Company during the Term (as such
Term may be extended in accordance with Section 6(e)(5) of the
Agreement) (the “ Milestone Date ”). The
Executive agrees that during the Restricted Period he will not
solicit or assist others to solicit the employment of or hire any
employee of the Company without the prior written consent of the
Company. For purposes of this Agreement, the “ Restricted
Period ” shall mean the period of one year following the
Milestone Date. For purposes of this Agreement, the term
“radio” shall mean terrestrial radio, satellite radio,
HD radio, internet radio and other audio delivered terrestrially,
by satellite, HD or the internet (which audio is not coupled with
moving visual elements, such as television, movies, or other moving
visual images delivered via the internet or otherwise).
Notwithstanding anything to the contrary in this Section 8, it
shall not be a violation of this Section 8 for the Executive to
join a division or business line of a commercial enterprise with
multiple divisions or business lines if such division or business
line is not engaged in a Competitive Activity; provided that the
Executive performs services solely for such non-competitive
division or business line.
9. Change of
