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This excerpt taken from the SIRI DEF 14A filed Apr 30, 2009. Payments
to Named Executive Officers Upon Termination or
Change-in-Control
The employment agreements we have entered into with our named
executive officers provide for severance payments and, in
connection with a severance that occurs after a
change-in-control,
additional payments (including tax
“gross-up”
payments to protect certain named executive officers from
so-called “golden parachute” excise taxes that could
arise in such circumstances). These arrangements vary from
executive to executive due to individual negotiations based on
executive history and individual circumstances.
We believe that these severance and
change-in-control
arrangements mitigate some of the risk that exists for
executives working in a nascent 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.
There is a possibility that we could be acquired in the future.
Accordingly, we believe that severance payments in connection
with a
change-in-control
are necessary to enable key executives to evaluate objectively
the benefits to our stockholders of a proposed transaction,
notwithstanding its potential effects on their own job security.
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