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This excerpt taken from the SIRI DEF 14A filed Nov 4, 2008. Payments
to Named Executive Officers Upon Termination or Change in
Control
The employment agreements we 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.
Table of Contents
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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