<PAGE>
Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SIRIUS SATELLITE RADIO INC.
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
.......................................................
(4) Proposed maximum aggregate value of transaction:
.......................................................
(5) Total fee paid:
.......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
<PAGE>
[LOGO]
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 19, 2000
-------------------
You are cordially invited to attend our Annual Meeting of stockholders which
will be held on Tuesday, September 19, 2000, at 10:00 a.m. in the Auditorium on
the first floor of U.S. Trust, 114 West 47th Street, New York, New York 10036.
The Annual Meeting is being held for the following purposes:
1. To elect five directors.
2. To ratify the appointment of Arthur Andersen LLP as independent
accountants of the Company for the fiscal year ending December 31,
2000.
3. To transact any other business that may properly come before the
meeting.
These items are described in this Proxy Statement.
Only stockholders of record at the close of business on July 24, 2000 are
entitled to vote at the Annual Meeting. If you plan to attend the Annual
Meeting, please mark the appropriate area on your proxy card. A list of
stockholders entitled to vote at the Annual Meeting will be available for
examination for ten days prior to the Annual Meeting, between the hours of
9:00 a.m. and 4:00 p.m., at our offices at 1221 Avenue of the Americas,
36th Floor, New York, New York 10020.
For your comfort, we ask that you do not bring any packages, briefcases,
large pocketbooks or bags into the meeting. Also, cellular and digital phones,
audio tape recorders and video and still cameras will not be permitted into the
meeting.
YOUR VOTE IS IMPORTANT. WE ENCOURAGE YOU TO READ THIS PROXY STATEMENT AND
SIGN AND RETURN YOUR PROXY CARD IN THE ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
This Proxy Statement and our 1999 Annual Report to Stockholders are being
distributed on or about August 21, 2000.
By Order of the Board of Directors,
PATRICK L. DONNELLY
-------------------------------------
PATRICK L. DONNELLY
Senior Vice President,
General Counsel and Secretary
New York, New York
August 21, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Questions & Answers......................................... 1
Business Matters To Be Voted On............................. 4
Nominees for the Board of Directors......................... 5
Board Governance and Operations............................. 7
Meetings of the Board of Directors...................... 7
Committees of the Board of Directors.................... 7
Directors' Compensation................................. 8
Compensation Committee Interlocks and Insider
Participation.......................................... 8
Information about Our Common Stock Ownership................ 9
Voting Trust Agreement.................................. 10
Executive Compensation...................................... 12
Summary Compensation Table.............................. 12
Option Grants in Last Fiscal Year....................... 12
Employment Agreements................................... 13
Report of Compensation Committee............................ 14
Performance Graph........................................... 18
</TABLE>
<PAGE>
QUESTIONS & ANSWERS
Q: WHAT AM I VOTING ON?
A: 1. The election of five directors to our Board of Directors (David
Margolese, Robert D. Briskman, Lawrence F. Gilberti, Joseph V. Vittoria
and Ralph V. Whitworth).
2. To ratify the appointment of Arthur Andersen LLP as our independent
accountants for the current fiscal year.
--------------------------------------------------------------------------------
Q: HOW DO I VOTE?
A: Stockholders should sign, date and return their proxy cards in the
pre-addressed, postage-paid envelope that is provided.
If you attend the Annual Meeting you may vote in person by ballot, even if
you have previously returned a proxy card.
--------------------------------------------------------------------------------
Q: WHO IS ENTITLED TO VOTE AND HOW MANY VOTES DO THEY HAVE?
A: Holders of our Common Stock and holders of our 9.2% Series A Junior
Cumulative Convertible Preferred Stock, 9.2% Series B Junior Cumulative
Convertible Preferred Stock and 9.2% Series D Junior Cumulative Convertible
Preferred Stock as of the close of business on July 24, 2000 (the 'Record
Date') are entitled to vote at the Annual Meeting. Each share of our Common
Stock is entitled to one vote. Each share of our Series A Junior Preferred
Stock and Series B Junior Preferred Stock is entitled to three and one-third
votes. Each share of our Series D Junior Preferred Stock is entitled to
2.9412 votes. As of the Record Date, the number of shares outstanding were
as follows: 41,968,425 shares of Common Stock; 1,461,270 shares of Series A
Junior Preferred Stock; 655,406 shares of Series B Junior Preferred Stock;
and 2,000,000 shares of Series D Junior Preferred Stock.
--------------------------------------------------------------------------------
Q: WHAT IS A PROXY?
A: A proxy is a person you appoint to vote on your behalf. We are soliciting
proxies so that all shares of our Common Stock, Series A Junior Preferred
Stock, Series B Junior Preferred Stock and Series D Junior Preferred Stock
may be voted at the Annual Meeting. You must complete and return the
enclosed proxy card to have your shares voted by proxy.
--------------------------------------------------------------------------------
Q: BY COMPLETING AND RETURNING THE PROXY CARD, WHO AM I DESIGNATING AS MY
PROXY?
A: You will be designating Patrick L. Donnelly, our Senior Vice President,
General Counsel and Secretary, and Edward Weber, Jr., our Vice President and
Controller, as your proxies.
--------------------------------------------------------------------------------
Q: HOW WILL MY PROXY VOTE MY SHARES?
A: Your proxy will vote according to the instructions on your proxy card. If
you complete and return your proxy card but do not indicate your vote on
some or all of the business matters, your proxy will vote 'FOR' these items.
Also, your proxy is authorized to vote on any other business that properly
comes before the Annual Meeting in accordance with the recommendation of the
Board of Directors.
1
<PAGE>
Q: CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
A: Yes. You may change your vote at any time before your shares are voted at
the Annual Meeting by:
Notifying our Corporate Secretary, Patrick L. Donnelly, in writing at
Sirius Satellite Radio Inc., 1221 Avenue of the Americas, 36th Floor, New
York, New York 10020 that you are revoking your proxy;
Executing and delivering a later dated proxy card; or
Voting in person at the Annual Meeting.
However, if you have shares held through a brokerage firm, bank or other
custodian, and you vote by proxy, you may revoke your proxy instructions
only by informing the custodian in accordance with any procedures it has
established.
--------------------------------------------------------------------------------
Q: WHAT IS A QUORUM OF STOCKHOLDERS?
A: Shares representing the majority of votes, present or represented by proxy,
constitute a quorum. If you vote by proxy card, your shares will be
considered part of the quorum.
--------------------------------------------------------------------------------
Q: WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
A: Assuming a quorum of stockholders is present at the Annual Meeting, the
affirmative vote of a plurality of all votes cast is required to elect each
director and the affirmative vote of a majority of all the votes cast is
needed to approve the appointment of Arthur Andersen LLP as our independent
accountants.
--------------------------------------------------------------------------------
Q: HOW DO YOU COUNT SHARES THAT AREN'T VOTED FOR THE NOMINEES FOR DIRECTOR, OR
ABSTAIN ON ANY MATTER?
A: With respect to the election of directors, votes withheld will be treated as
shares present for purposes of determining a quorum. Directors are elected
by a plurality vote, so the five persons receiving the greatest number of
votes will be elected and withheld votes will not affect the outcome of the
election. With respect to the approval of Arthur Andersen LLP or any other
matter properly brought before the meeting, abstentions will be treated as
shares present for purposes of determining a quorum. Because a majority of
the shares represented at the meeting and entitled to vote is required for
approval of these matters, abstentions will have the same effect as a vote
against approval.
--------------------------------------------------------------------------------
Q: HOW DO YOU COUNT SHARES THAT ARE HELD BY BROKERS BUT NOT VOTED?
A: Valid proxies submitted by a broker or its nominee that are not voted on a
matter or that are marked 'abstain' will be counted for purposes of
determining a quorum at the Annual Meeting, but will not be considered as
having voted on that matter.
Q: WHO WILL COUNT THE VOTES?
A: A representative of The Bank of New York, our transfer agent, will tabulate
the votes and act as inspector of election.
--------------------------------------------------------------------------------
2
<PAGE>
Q: HOW DO I ATTEND THE ANNUAL MEETING?
A: If you are a registered stockholder, an admission ticket is enclosed with
your proxy card. If you wish to attend the Annual Meeting, please vote your
proxy but keep the admission ticket and bring it with you to the Annual
Meeting.
If your shares are held in the name of a bank, broker or other holder of
record and you wish to attend the Annual Meeting, you need to bring a copy
of a bank or brokerage statement to the Annual Meeting reflecting your stock
ownership as of the Record Date.
--------------------------------------------------------------------------------
Q: WHO IS SOLICITING MY PROXY AND WHO PAYS THE COST?
A: The Company is soliciting your proxy. The cost of soliciting proxies will be
borne by the Company. The Company has engaged Georgeson Shareholder
Communications to assist in the distribution and solicitation of proxies. We
have agreed to pay Georgeson $5,000 plus their reasonable out-of-pocket
expenses. The Company will also reimburse brokerage firms, banks and other
custodians for their reasonable out-of-pocket expenses for forwarding these
proxy materials to you. Directors, officers and regular employees of the
Company may solicit proxies on our behalf by telephone or in writing.
--------------------------------------------------------------------------------
Q: WHEN ARE THE STOCKHOLDER PROPOSALS DUE FOR NEXT YEAR'S ANNUAL MEETING?
A: To be eligible for inclusion in our proxy statement and form of proxy for
next year's Annual Meeting, stockholder proposals must be submitted in
writing by the close of business on April 18, 2001 to Patrick L. Donnelly,
Senior Vice President, General Counsel and Secretary, Sirius Satellite Radio
Inc., 36th Floor, 1221 Avenue of the Americas, New York, New York 10020.
If any proposal that is not submitted for inclusion in next year's proxy (as
described in the preceding paragraph) is instead sought to be presented
directly at next year's annual meeting, the proxies may vote in their
discretion if (a) we receive notice of the proposal before the close of
business on July 2, 2001 and advise stockholders in next year's proxy
statement about the nature of the matter and how management intends to vote
on such matter or (b) we do not receive notice of the proposal prior to the
close of business on July 2, 2001. Notices of intention to present proposals
at next year's annual meeting should be addressed to Patrick L. Donnelly,
Senior Vice President, General Counsel and Secretary, Sirius Satellite Radio
Inc., 1221 Avenue of the Americas, 36th Floor, New York, New York 10020.
3
<PAGE>
BUSINESS MATTERS TO BE VOTED ON
ITEM 1. ELECTION OF DIRECTORS
Five directors will be elected at this year's Annual Meeting. Directors
serve until the next annual meeting of stockholders or until the director is
succeeded by another qualified director who has been elected. Each of the
nominated directors has agreed to serve if elected. However, if for some reason
one of them is unable to accept nomination or election, proxies will be voted
for the election of a nominee designated by the Board of Directors. Biographical
information for each of the nominees is presented below under the caption
'Nominees for the Board of Directors'.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE 'FOR' EACH OF THE NOMINEES.
ITEM 2. RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP ('Arthur Andersen')
as our independent accountants for 2000. As such, Arthur Andersen will audit and
report on our financial statements for the fiscal year ending December 31, 2000.
During October 1998, we engaged Arthur Andersen to provide us tax consulting
services.
Representatives of Arthur Andersen are expected to be present at the Annual
Meeting. They will have an opportunity to make a statement if they desire to do
so and are expected to be available to respond to appropriate questions.
PricewaterhouseCoopers LLP ('PricewaterhouseCoopers') were our independent
accountants for our fiscal year ended December 31, 1998. On April 6, 1999, we
dismissed PricewaterhouseCoopers. The decision to change accountants was
approved by the Audit Committee of our Board of Directors.
During the fiscal years ended December 31, 1997 and December 31, 1998 and
the period January 1, 1999 through April 6, 1999, there were no disagreements
with PricewaterhouseCoopers on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of PricewaterhouseCoopers,
would have caused them to make a reference to the subject matter of such
disagreements in connection with their reports.
PricewaterhouseCoopers' report on our financial statements for the fiscal
year ended December 31, 1998 was modified to include an explanatory paragraph as
to our ability to continue as a going concern through December 31, 1999. This
modification was due to the fact that we did not have the financial resources to
meet our capital expenditure obligations through December 31, 1999. Otherwise,
PricewaterhouseCoopers' reports on our financial statements for the fiscal years
ended December 31, 1997 and December 31, 1998 did not contain an adverse opinion
or disclaimer of opinion, and were not qualified or modified as to uncertainty,
audit scope or accounting principle.
In addition, the October 7, 1998 PricewaterhouseCoopers' reissued report on
our financial statements for the fiscal year ended December 31, 1997 included an
emphasis of a matter paragraph as to our ability to continue as a going concern
through 1999. However, in view of the funds we raised through equity financings
in the fourth quarter of 1998, PricewaterhouseCoopers subsequently revised their
reissued report to remove the paragraph concerning this uncertainty.
We requested that PricewaterhouseCoopers furnish us with a letter addressed
to the Securities and Exchange Commission stating whether it agrees with the
above statements. A copy of that letter dated April 9, 1999 was filed as exhibit
16 to our Current Report on Form 8-K dated April 9, 1999.
Representatives of PricewaterhouseCoopers are not expected to be present at
the Annual Meeting, to make a statement or to be available for questions.
4
<PAGE>
Prior to engaging Arthur Andersen, neither we nor anyone acting on our
behalf consulted with Arthur Andersen regarding the application of accounting
principles to any specified transaction or the type of audit opinion that might
be rendered on our financial statements, and neither a written report nor oral
advice was provided to us that Arthur Andersen concluded was an important factor
considered by us in reaching a decision as to any accounting, auditing or
financial reporting issue. In addition, prior to engaging Arthur Andersen,
neither we nor anyone acting on our behalf consulted with Arthur Andersen with
respect to any matter that was either the subject of a disagreement (as defined
in Item 304(a)(1)(iv) of Regulation S-K) or a reportable event (as described in
Item 304(a)(1)(v) of Regulation S-K).
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE 'FOR' THIS ITEM.
ITEM 3. OTHER MATTERS
The Board of Directors does not intend to present, or have any reason to
believe others will present, any items of business other than those stated
above. If other matters are properly brought before the Annual Meeting, the
persons named in the accompanying proxy will vote the shares represented by it
in accordance with the recommendation of the Board of Directors.
NOMINEES FOR THE BOARD OF DIRECTORS
The following are brief biographical sketches for each of the nominees:
DAVID MARGOLESE, age 42, has served as Chairman of the Board and Chief
Executive Officer of Sirius Satellite Radio since August 1993, and as a director
since August 1991. Prior to his involvement with Sirius Satellite Radio, Mr.
Margolese proposed and co-founded Cantel Inc., Canada's national cellular
telephone carrier, which was acquired by Rogers Communications Inc. in 1989, and
Canadian Telecom Inc., Canada's national paging company, serving as that
company's president until the company's sale in 1987.
ROBERT D. BRISKMAN, age 67, is a co-founder of Sirius Satellite Radio and
has served as Executive Vice President, Engineering, and as a director since
October 1991. Prior to 1986, during his twenty-two year career at Communications
Satellite Corporation, a satellite communications company, he was responsible
for the engineering and implementation of numerous major satellite systems,
including ITALSAT, ARABSAT and CHINASAT. Mr. Briskman was one of the early
engineers at NASA in 1959, and received the APOLLO Achievement Award for the
design and implementation of the Unified S-Band System. He is past chairman of
the IEEE Standards Board, past president of the Aerospace and Electronics
Systems Society and served on the industry advisory council to NASA. He is the
Telecommunications Editor of McGraw Hill's Encyclopedia of Science and
Technology and is a recipient of the IEEE Centennial Medal.
LAWRENCE F. GILBERTI, age 49, has been a director of Sirius Satellite Radio
since September 1993 and served as our Secretary from November 1992 until May
1998. Since December 1992, he has been the Secretary and sole director, and from
December 1992 to September 1994 was the President of, Satellite CD Radio, Inc.,
our subsidiary which holds our FCC license. Since June 2000, Mr. Gilberti has
been a partner in the law firm of Reed Smith Shaw & McClay LLP; from May 1998
through May 2000, he was of counsel to that firm. From August 1994 to May 1998,
Mr. Gilberti was a partner in the law firm of Fischbein Badillo Wagner &
Harding. Mr. Gilberti has provided legal services to Sirius Satellite Radio
since 1992.
5
<PAGE>
JOSEPH V. VITTORIA, age 65, has been a director of Sirius Satellite Radio
since April 1998. From 1997 to February 2000, Mr. Vittoria was Chairman and
Chief Executive Officer of Travel Services International, Inc., a travel
services distributor, and he has been Executive Chairman of that company since
March 2000. Since 1997, Mr. Vittoria has also served as a member of the Board of
Overseers of Columbia Business School. From September 1987 to February 1997, Mr.
Vittoria was the Chairman and Chief Executive Officer of Avis Inc., one of the
world's largest rental car companies. Mr. Vittoria also serves on the boards of
ResortQuest International, Inc. and Carey International, Inc. He is a director
and Chairman of Transmedia Asia Pacific, Inc. and of Puradyn Filter
Technologies, Inc.
RALPH V. WHITWORTH, age 44, has been a director of Sirius Satellite Radio
since March 1994. Mr. Whitworth has been a principal and managing member at
Relational Investors LLC, a private investment company, since March 1996, and a
partner in Batchelder & Partners, Inc., a financial advisory firm, since January
1997. Since April 1998, he has also been Chairman of Apria Healthcare Group,
Inc., a home-health company. From August to November 1999, he was Chairman of
Waste Management, Inc., a provider of integrated waste management services. From
August 1988 to December 1996, he was President of Whitworth and Associates, a
Washington, D.C.-based consulting firm. Mr. Whitworth is also a director of
Mattel, Inc., Waste Management, Inc. and Tektronix, Inc.
6
<PAGE>
BOARD GOVERNANCE AND OPERATIONS
The business and affairs of the Company are managed by or under the
direction of your Board of Directors. The Board includes a majority of
non-employee Directors.
Your Board reaffirms its management accountability to the stockholders
through the annual election process. All Directors stand for election annually.
Your Board reviews and ratifies senior management selection and
compensation, monitors overall corporate performance and ensures the integrity
of our financial controls. The Board also oversees our strategic and business
planning process.
MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1999, there were nine meetings of
the Board of Directors and the Board took action two times through written
consents in lieu of meetings. Each Director attended more than 75% of the total
number of meetings of the Board and meetings held by all committees on which he
served.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors maintains two standing committees, an Audit Committee
and a Compensation Committee. The Board of Directors does not maintain a
Nominating Committee. The following table shows the members of each Committee,
the number of committee meetings held during 1999 and the functions performed by
each committee:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
COMMITTEE FUNCTIONS
----------------------------------------------------------------------------------------
<S> <C>
AUDIT Recommends to the Board the selection of independent
Meetings: Three accountants
Members: Reviews reports of independent accountants
Lawrence F. Gilberti Reviews and approves the scope and costs of all services
Joseph V. Vittoria (including non-audit services) provided by the firm
Ralph V. Whitworth* selected to conduct the audit
Monitors the effectiveness of the audit process
Reviews adequacy of financial and operating controls
Monitors corporate compliance program
----------------------------------------------------------------------------------------
COMPENSATION Reviews and approves salaries and other compensation
Meetings: Three matters for executive officers
Members: Administers stock option program and approves grants of
Lawrence F. Gilberti options to officers under our stock option plans
Joseph V. Vittoria
Ralph V. Whitworth*
----------------------------------------------------------------------------------------
</TABLE>
* Committee Chairperson
7
<PAGE>
DIRECTORS' COMPENSATION
Directors who are employees of the Company or its subsidiaries receive no
additional compensation for serving on the Board of Directors.
Unless otherwise authorized by the Compensation Committee, each non-employee
director is entitled to receive options to purchase 10,000 shares of Common
Stock upon becoming a director and an automatic annual grant of options to
purchase 10,000 shares of Common Stock on the business day following our annual
meeting of stockholders. The exercise price for all such options is the fair
market value of our Common Stock on the date of grant. Non-employee directors
are also reimbursed for reasonable travel expenses incurred in attending
meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Gilberti, a director, is a partner in the law firm of Reed Smith Shaw &
McClay LLP and has provided legal services to us since 1992.
Pursuant to an agreement dated October 21, 1992 (the 'Batchelder
Agreement'), we retained the services of Batchelder & Partners, Inc.
('Batchelder') to provide certain financial consulting services. The Batchelder
Agreement was terminated on November 30, 1997; however, the parties agreed that
the termination would not affect our obligations with respect to certain
transactions entered into within 24 months of the termination date. In January
1997, Mr. Whitworth became a partner in Batchelder. In the fiscal year ended
December 31, 1999, Mr. Whitworth, as a partner in Batchelder, received $885,000
from the total fees received by Batchelder from us. On December 29, 1997, Mr.
Whitworth received, pursuant to options given Batchelder, an option to purchase
17,800 shares of our Common Stock at an exercise price of $6.25. On February 2,
2000, Mr. Whitworth exercised this option and sold the Common Stock received
upon exercise of the option.
8
<PAGE>
INFORMATION ABOUT OUR COMMON STOCK OWNERSHIP
The table below shows, as of June 30, 2000, each person we know to be a
beneficial owner of more than 5% of our Common Stock. In general, 'beneficial
ownership' includes those shares a person has the power to vote or transfer, and
options to acquire our Common Stock that are exercisable currently or become
exercisable within 60 days. Except as otherwise noted, the persons named in the
table below have sole voting and sole investment power with respect to all
shares shown as beneficially owned by them.
<TABLE>
<CAPTION>
NAMES AND ADDRESS OF NUMBER OF SHARES
BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
---------------- ------------------ ----------------
<S> <C> <C>
Apollo Investment Fund IV, L.P. (1) ........................ 7,055,587 14.4
Apollo Overseas Partners IV, L.P.
Two Manhattanville Road
Purchase, New York 10577
David Margolese (2) ........................................ 5,621,014 12.8
1221 Avenue of the Americas
New York, New York 10020
Prime 66 Partners, L.P. (3) ................................ 5,160,075 12.3
201 Main Street, Suite 3200
Forth Worth, Texas 76102
Blackstone Management Associates III L.L.C (4) ............. 5,882,353 12.3
345 Park Avenue
New York, New York 10154
Everest Capital Master Fund, L.P. (5) ...................... 5,206,008 11.7
Everest Capital Limited
c/o Morgan Stanley & Co. Incorporated
One Pierpont Plaza
10th Floor
Brooklyn, New York 11201
DaimlerChrysler Corporation (6) ............................ 2,290,322 5.5
1000 Chrysler Drive
Auburn Hills, Michigan 48326
</TABLE>
---------
(1) The information is based in part upon the Schedule 13D filed on October 28,
1999 by Apollo Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P.
and Apollo Advisors IV, L.P. with the Securities and Exchange Commission
reflecting the ownership of 1,350,000 shares of 9.2% Series A Junior
Cumulative Convertible Preferred Stock and 650,000 shares of 9.2% Series B
Junior Cumulative Convertible Preferred Stock. The amount reflected also
includes 111,270 shares of 9.2% Series A Junior Cumulative Convertible
Preferred Stock and 5,406 shares of 9.2% Series B Junior Cumulative
Convertible Preferred Stock issued by us to Apollo Investment Fund IV, L.P.
and Apollo Overseas Partners IV, L.P. on November 15, 1999 in satisfaction
of our annual dividend obligation with respect to our 9.2% Series A Junior
Cumulative Convertible Preferred Stock and 9.2% Series B Junior Cumulative
Convertible Preferred Stock. Each share of 9.2% Series A Junior Cumulative
Convertible Preferred Stock and 9.2% Series B Junior Cumulative Convertible
Preferred Stock is entitled to three and one-third votes.
(2) Includes 2,020,000 shares issuable pursuant to stock options that are
exercisable within 60 days and 1,014 vested shares acquired under the
Company' s 401(k) Savings Plan (the '401(k) Plan') as of June 30, 2000.
Pursuant to a voting trust agreement ('Voting Trust Agreement') entered into
by Darlene Friedland, as grantor, David Margolese, as trustee, and Sirius
Satellite Radio Inc. until November 20, 2002, Mr. Margolese has the power to
vote in his discretion all shares of Common Stock owned or hereafter
acquired by Darlene Friedland and certain of her affiliates (2,000,000
shares as of May 10, 2000). See
(footnotes continued on next page)
9
<PAGE>
(footnotes continued from previous page)
'Voting Trust Agreement'. This information is based upon Amendment No. 1 to
the Schedule 13D filed on July 21, 2000 by David Margolese with the
Securities and Exchange Commission.
(3) This information is based upon Amendment No. 1 to the Schedule 13D filed on
September 29, 1999 by Prime 66 Partners, L.P. and Composite 66, L.P. with
the Securities and Exchange Commission.
(4) Represents 2,000,000 shares of 9.2% Series D Junior Cumulative Convertible
Preferred Stock which entitles the holder to vote as if the shares had been
converted to Common Stock. Each share of 9.2% Series D Junior Cumulative
Convertible Preferred Stock is entitled to 2.9412 votes. This information is
based upon the Schedule 13D filed on February 10, 2000 by Blackstone
Management Associates III L.L.C. and some of its affiliates with the
Securities and Exchange Commission.
(5) Represents (i) 2,666,711 shares of Common Stock, (ii) $22,750,000 in
aggregate principal amount of our 8 3/4% Convertible Subordinated Notes due
2009 and (iii) shares of Common Stock issuable pursuant to warrants to
purchase 1,740,000 shares of Common Stock at a purchase price of $50 per
share. These warrants are exercisable from June 15, 1998 through and
including June 15, 2005. This information is based upon Amendment No. 1 to
the Schedule 13G filed on April 10, 2000 by Everest Capital Limited and
Everest Captital Master Fund, L.P. with the Securities and Exchange
Commission.
(6) This information is based upon the Schedule 13D filed on February 7, 2000 by
DaimlerChrysler Corporation with the Securities and Exchange Commission.
The following table shows the amount of our Common Stock held, as of
June 30, 2000, by each director, our Chief Executive Officer and the four other
most highly compensated officers as of the end of 1999 and by all of our
directors and executive officers as a group:
<TABLE>
<CAPTION>
SHARES
NAME OF NUMBER OF SHARES PERCENT ACQUIRABLE
BENEFICIAL OWNER BENEFICIALLY OWNED (1) OF CLASS WITHIN 60 DAYS
---------------- ---------------------- -------- --------------
<S> <C> <C> <C>
David Margolese (2)................................. 5,621,014 12.8% 2,020,000
Robert D. Briskman.................................. 220,978 * 208,322
Lawrence F. Gilberti................................ 55,000 * 55,000
Joseph V. Vittoria.................................. 45,000 * 45,000
Ralph V. Whitworth.................................. 55,000 * 55,000
Ira H. Bahr (3)..................................... 52,803 * 51,250
Joseph S. Capobianco................................ 75,861 * 75,000
Patrick L. Donnelly................................. 75,333 * 75,000
All Directors and Executive Officers as a Group
(9 persons) (4)................................... 6,240,989 14.0% 2,584,572
</TABLE>
---------
* Less than 1% of our outstanding shares of Common Stock.
(1) These amounts include shares of common stock which the individuals hold and
shares of common stock they have a right to acquire within the next 60 days
as shown in the last column through the exercise of stock options. Also
included in the table are the number of shares of common stock acquired
under the 401(k) Plan as of June 30, 2000: Mr. Margolese -- 1,014 shares;
Mr. Briskman -- 978 shares; Mr. Bahr -- 553 shares; Mr. Capobianco -- 861
shares; and Mr. Donnelly -- 333 shares.
(2) Pursuant to the Voting Trust Agreement, until November 20, 2002, David
Margolese, as trustee, has the power to vote in his discretion all shares of
Common Stock owned or hereafter acquired by Darlene Friedland and certain of
her affiliates (2,000,000 shares as of May 10, 2000).
(3) Mr. Bahr's employment with us ended on July 18, 2000.
(4) Does not include 2,348,750 shares of common stock issuable pursuant to stock
options that are not exercisable within 60 days.
VOTING TRUST AGREEMENT
We are a party to a voting trust agreement dated August 26, 1997 by and
among Darlene Friedland, as grantor, David Margolese, as the voting trustee, and
us. The following summary description of the Voting Trust Agreement does not
purport to be complete and is qualified in its entirety by reference to the
complete text of the agreement.
10
<PAGE>
The Voting Trust Agreement provides for the establishment of a trust (the
'Trust') into which (i) there has been deposited all of the shares of Common
Stock owned by Mrs. Friedland on August 26, 1997 and (ii) there shall be
deposited any shares of Common Stock acquired by Mrs. Friedland, her spouse
Robert Friedland, any member of either of their immediate families or any entity
directly or indirectly controlled by Mrs. Friedland, her spouse or any member of
their immediate families (the 'Friedland Affiliates') between the date shares
are initially deposited and the termination of the Trust. The Voting Trust will
terminate on November 20, 2002.
The Voting Trust Agreement does not restrict the ability of Mrs. Friedland
or any of the Friedland Affiliates to sell, assign, transfer or pledge any of
the shares deposited into the Trust, nor does it prohibit Mrs. Friedland or the
Friedland Affiliates from purchasing additional shares of our Common Stock,
provided those shares become subject to the Trust.
Under the Voting Trust Agreement, the trustee has the power to vote shares
held in the Trust in relation to any matter upon which the holders of such stock
would have a right to vote, including without limitation the election of
directors. For so long as David Margolese remains trustee of the Trust, he may
exercise such voting rights in his discretion. Any successor trustee or trustees
of the Trust must vote as follows:
on the election of directors, the trustee(s) must vote the entire number of
shares held by the Trust, with the number of shares voted for each director
(or nominee for director) determined by multiplying the total number of
votes held by the Trust by a fraction, the numerator of which is the number
of votes cast for such person by other stockholders of the Company and the
denominator of which is the sum of the total number of votes represented by
all shares casting any votes in the election of directors;
if the matter under Delaware law or our Certificate of Incorporation or our
Bylaws requires at least an absolute majority of all outstanding shares of
Common Stock in order to be approved, the trustee(s) must vote all of the
shares in the Trust in the same manner as the majority of all votes that
are cast for or against the matter by all other stockholders of the
Company; and
on all other matters, including, without limitation, any amendment of the
Voting Trust Agreement for which a stockholder vote is required, the
trustee(s) must vote all of the shares in the Trust for or against the
matter in the same manner as all votes that are cast for or against the
matter by all other stockholders of the Company.
The Voting Trust Agreement may not be amended without our prior written
consent, acting by unanimous vote of the Board of Directors, and approval of our
stockholders, acting by the affirmative vote of two-thirds of the total voting
power of the Company, except in certain limited circumstances where amendments
to the Voting Trust Agreement are required to comply with applicable law.
11
<PAGE>
EXECUTIVE COMPENSATION
The table below shows the compensation for the last three years for our
Chairman and Chief Executive Officer and the four next highest paid executive
officers at the end of 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------
ANNUAL NUMBER OF
COMPENSATION SECURITIES
---------------- UNDERLYING ALL OTHER
SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)(1)
--------------------------- ---- --- --- --- ------
<S> <C> <C> <C> <C> <C>
David Margolese ............................................ 1999 450,000 -- 2,500,000 10,000
Chairman of the Board and 1998 400,000 -- -- 10,000
Chief Executive Officer 1997 268,714 -- -- --
Robert D. Briskman ......................................... 1999 280,000 40,000(2) 150,000 10,000
Executive Vice President, 1998 260,000 25,000(2) 57,500 10,000
Engineering 1997 234,583 -- 30,000 --
Ira H. Bahr (3) ............................................ 1999 234,167 -- 275,000 10,000
Senior Vice President, 1998 103,183 -- 100,000 6,245
Marketing 1997 -- -- -- --
Joseph S. Capobianco ....................................... 1999 241,667 -- 100,000 10,000
Senior Vice President, 1998 218,125 -- 25,000 9,200
Content 1997 141,667 -- 75,000 --
Patrick L. Donnelly (4) .................................... 1999 277,500 -- 215,000 10,000
Senior Vice President, 1998 162,500 -- 110,000 --
General Counsel and Secretary 1997 -- -- -- --
</TABLE>
---------
(1) Represents matching contributions by us under the 401(k) Plan. These amounts
were paid in the form of shares of our Common Stock.
(2) Amount represents bonus award for obtaining patents.
(3) Mr. Bahr became an executive officer in October 1998. His employment with us
ended on July 18, 2000.
(4) Mr. Donnelly became an executive officer in May 1998.
The following table sets forth certain information for the fiscal year ended
December 31, 1999, with respect to options granted to individuals named in the
Summary Compensation Table above.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SHARES AT ASSUMED ANNUAL RATES
UNDERLYING OF STOCK PRICE APPRECIATION
OPTIONS % OF TOTAL EXERCISE ---------------------------
GRANTED OPTIONS GRANTED PRICE EXPIRATION 5% 10%
NAME (#) TO EMPLOYEES ($/SHARE) DATE ($) ($) ($)
---- ---------- --------------- --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
David Margolese.............. 1,800,000 55.0% 31.25 1/1/09 35,375,323 89,648,013
700,000 30.50 12/17/09 13,426,900 34,026,402
Robert D. Briskman........... 60,000 3.3% 23.75 3/26/09 896,175 2,271,083
90,000 30.50 12/17/09 1,726,316 4,374,823
Ira H. Bahr.................. 100,000 6.0% 23.75 3/26/09 1,493,625 3,785,138
50,000 29.125 6/22/09 915,828 2,320,887
125,000 30.50 12/17/09 2,397,661 6,076,143
Joseph S. Capobianco......... 40,000 2.2% 23.75 3/26/09 597,450 1,514,055
60,000 30.50 12/17/09 1,150,877 2,916,549
Patrick L. Donnelly.......... 90,000 4.7% 23.75 3/26/09 1,344,262 3,406,625
125,000 30.50 12/17/09 2,397,661 6,076,143
</TABLE>
12
<PAGE>
The following table sets forth certain information with respect to the
number of shares covered by both exercisable and unexercisable stock options
held by the individuals named in the Summary Compensation Table as of
December 31, 1999. Also reported are the values for 'in-the-money' stock options
that represent the positive spread between the respective exercise prices of
outstanding stock options and the fair market value of our Common Stock as of
December 31, 1999 ($44.50 per share).
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
NO. OF UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR END IN-THE-MONEY OPTIONS AT
ACQUIRED ON (#) FISCAL YEAR END ($)
EXERCISE VALUE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David Margolese............ 0 0 1,540,000 1,660,000 37,355,000 22,520,000
Robert D. Briskman......... 0 0 220,000 180,000 8,745,000 3,405,000
Ira H. Bahr................ 0 0 25,000 350,000 449,375 5,941,875
Joseph S. Capobianco....... 0 0 42,500 157,500 1,320,000 3,403,125
Patrick L. Donnelly........ 0 0 35,000 290,000 385,000 4,442,500
</TABLE>
EMPLOYMENT AGREEMENTS
We are a party to an employment agreement with each of Messrs. Margolese,
Briskman, Capobianco and Donnelly (the 'Employment Agreements').
MR. MARGOLESE
Effective January 1, 1999, we entered into a agreement to employ David
Margolese as our Chairman and Chief Executive Officer for a term of five years.
The employment agreement provides for an annual base salary of $500,000 in 2000
and increases of $50,000 for each year thereafter. We also granted to Mr.
Margolese an option to purchase 1,800,000 shares of Common Stock at $31.25 per
share, of which options to purchase 1,320,000 shares of Common Stock are fully
vested and exercisable. On January 2, 2001, the 480,000 remaining unvested
options will vest and become exercisable. Any unvested options will vest and
become exercisable upon the termination of Mr. Margolese's employment for any
reason other than 'Cause' (as defined in the Employment Agreement). If Mr.
Margolese is terminated without 'Cause' or resigns for 'Good Reason' (each
defined in the Employment Agreement), we are obligated to pay Mr. Margolese the
sum of $5,000,000. If following the occurrence of a 'Change of Control' (as
defined in the Employment Agreement), Mr. Margolese is terminated for any reason
(including resignation by Mr. Margolese for Good Reason), we are obligated to
pay to Mr. Margolese the sum of $8,000,000 plus an amount equal to any excise
taxes Mr. Margolese is required to pay solely as a result of the acceleration of
the vesting of options and such additional amounts as are necessary to place Mr.
Margolese in the same financial position he would have been in if such excise
taxes were not imposed. Under the terms of the Employment Agreement, Mr.
Margolese may not (a) disclose any of our proprietary information or (b) during
his employment with us and for two years thereafter, engage in any business
involving the transmission of radio entertainment programming in North America.
MR. BRISKMAN
Effective December 31, 1999, we entered into an agreement to employ Robert
D. Briskman as Executive Vice President, Engineering, until his retirement in
February 2001. Pursuant to this agreement, we pay Mr. Briskman an annualized
base salary of $310,000. If Mr. Briskman's employment
13
<PAGE>
is terminated for any reason, other than 'Cause' (as defined in the Employment
Agreement), we are obligated to pay to Mr. Briskman a sum equal to 50% of his
then annual salary. Under this agreement, Mr. Briskman may not disclose any of
our proprietary information during his employment with us or, for two years
following the termination of his employment or, in the event he has been
terminated without 'Cause' or has resigned for 'Good Reason' (each as defined in
the Employment Agreement), for one year following such termination without Cause
or resignation for Good Reason, enter into the employment of, render services
to, or otherwise assist, any person or entity engaged in any operations in North
America involving the transmission of radio entertainment programming in
competition with us or that competes, or is likely to compete, with any other
aspect of our business as conducted on the date his employment terminates. Under
the terms of this agreement, we have also agreed to provide Mr. Briskman and his
wife medical insurance, on the same terms as they are receiving such insurance
on the date of Mr. Briskman's retirement, for the rest of their lives.
Upon Mr. Briskman's retirement in February 2001, we will enter into a three
year consulting agreement with Mr. Briskman. Under this consulting agreement,
Mr. Briskman will be paid a consulting fee of $15,000 per month.
MESSRS. CAPOBIANCO AND DONNELLY
On March 28, 2000, we entered into employment agreements with Joseph S.
Capobianco to serve as Senior Vice President, Content, and Patrick L. Donnelly,
to serve as Senior Vice President, General Counsel and Secretary. The agreement
with Mr. Capobianco replaced a previous employment agreement expiring on
April 16, 2000 and the agreement with Mr. Donnelly replaced a previous
employment agreement expiring on May 18, 2001. Both of these agreements have a
term of three years.
Pursuant to these agreements, we pay Mr. Capobianco an annualized base
salary of $275,000 and Mr. Donnelly an annualized base salary of $290,000. These
base salaries are subject to increase from time to time by the Board of
Directors. Pursuant to these agreements, if the executive's employment is
terminated, except by us for 'Cause' (as defined in the Employment Agreements)
or by the executive voluntarily, we are obligated to pay him an amount equal to
the sum of his annual salary and the annual bonus last paid to him. Under these
agreements, neither Mr. Capobianco nor Mr. Donnelly may disclose any of our
proprietary information or, for two years following the termination of his
employment (or, in the event he has been terminated without Cause or has
resigned for 'Good Reason' (as defined in the Employment Agreements), for one
year following such termination without Cause or resignation for 'Good Reason'),
enter into the employment of, render services to or otherwise assist certain of
our competitors.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the 'Committee') is
comprised solely of directors who are not current or former employees of the
Company. The Committee is responsible for overseeing and administering our
executive compensation programs. The Committee reviews, monitors and approves
executive compensation, establishes compensation guidelines for corporate
officers and administers our stock option plans.
COMPENSATION PHILOSOPHY
Our compensation philosophy is premised upon the belief that our employees
are our most valuable asset. Our executive officers are charged with directing
our strategic planning, managing the
14
<PAGE>
growth of our organization, overseeing the completion of our infrastructure and
have overall responsibility for our results. We have planned and implemented a
compensation structure intended to attract and retain highly talented
individuals, energize and reward the creativity of our executive officers in
achieving our stated milestones, and provide incentives to our executive
officers to execute our objectives and enhance stockholder value by achieving
short term and long term business objectives.
COMPENSATION PROGRAM
Our compensation program has to date consisted of base salary and long term
incentive compensation comprised exclusively of the stock options under our
stock option plans.
BASE SALARIES
The base salaries paid to each of our executive officers during 1999 were
paid pursuant to written employment agreements described herein under 'Executive
Compensation -- Employment Agreements'. The Committee reviews and considers base
salary adjustments for each of our executive officers annually based on
recommendations from management and considerations relating to the respective
officers' individual performances, the responsibilities of their positions and
their competitive positions vis-a-vis executives of other high performing
companies. Salary increases during fiscal year 1999 were based on these
criteria. During 1999, at the recommendation of our Chief Executive Officer, Mr.
Briskman's annual salary was increased from $280,000 to $310,000, Mr.
Capobianco's annual salary was increased from $230,000 to $250,000, Mr.
Donnelly's annual salary was increased from $260,000 to $290,000 and Mr. Bahr's
salary was increased from $225,000 to $280,000.
Except as to the compensation reflected in the Employment Agreement between
us and Mr. Margolese effective as of January 1, 1999, we have not sought to
position executive compensation within any particular range as compared to any
stated peer group.
LONG-TERM INCENTIVES
We provide long-term incentives through stock options granted to our
executive officers under our stock option plans. The Committee believes that the
potential for stock ownership by executives and other employees is the most
effective method by which the interests of management may be aligned with those
of other stockholders. The options granted typically vest over four years, have
a term of ten years and have an exercise price equal to the fair market value of
our Common Stock on the grant date.
In March 1999, the Committee awarded Mr. Briskman 60,000 stock options, Mr.
Bahr 100,000 stock options, Mr. Capobianco 40,000 stock options and Mr. Donnelly
90,000 stock options. These options have a ten year term and an exercise price
of $23.75. In June 1999, the Committee awarded Mr. Bahr an additional 50,000
options. These options have a ten year term and an exercise price of $29.125. In
December 1999, the Committee awarded Mr. Briskman an additional 90,000 stock
options, Mr. Bahr an additional 125,000 stock options, Mr. Capobianco an
additional 60,000 stock options and Mr. Donnelly an additional 125,000 stock
options. These options have a ten year term and an exercise price of $30.50. The
number of options granted by the Committee to each executive officer during 1999
was based upon such criteria as anticipated achievement, responsibilities,
performance, experience and future potential, as well as an awareness of the
financial incentives required to retain the quality of executive management
essential to the attainment of our strategic and financial objectives.
The Committee has authorized executive management to grant stock options to
employees below the executive officer level on an annual basis according to
performance guidelines intended to be
15
<PAGE>
competitive with comparable companies and to reward individual achievement
appropriately. Our executive officers do not receive annual stock option grants
under this program.
ANNUAL BONUS/SHORT-TERM INCENTIVES
To date, we have not implemented any plan or program of annual cash bonuses
or other similar short-term incentive awards, other than the awarding of certain
cash bonuses to our employees upon the receipt of patent grants. In February
2000, we paid Mr. Margolese a bonus of $500,000, Mr. Briskman a bonus of
$100,000, Mr. Bahr a bonus of $280,000, Mr. Capobianco a bonus of $150,000 and
Mr. Donnelly a bonus of $290,000. Each of these bonuses was awarded by the Board
in recognition of the executive's efforts in securing our alliances with
DaimlerChrysler and BMW. As we complete our infrastructure build-out and
commence operations, the Board of Directors expects to pay annual bonuses to our
executives officers based upon satisfaction of business objectives.
COMPENSATION OF OUR CHAIRMAN AND CHIEF EXECUTIVE OFFICER
In 1998, the Committee negotiated, and we entered into, a new employment
agreement with Mr. Margolese, our Chairman and Chief Executive Officer,
effective as of January 1, 1999. (Mr. Margolese's prior employment agreement
expired on December 31, 1998.) The specific terms of this agreement are
described in detail in this proxy statement in the section titled 'Executive
Compensation -- Employment Agreements'. The Committee engaged an independent
compensation consultant to assist it in the process of determining appropriate
compensation for Mr. Margolese. This consultant identified for the Committee
peer companies within the telecommunications and technologies industries whose
CEO compensation arrangements served as comparative compensation standards
against which the Committee measured the compensation package (comprised of
annual base salary and stock options) agreed to with Mr. Margolese. Mr.
Margolese's base salary structure under this new agreement includes annual
increases of $50,000 per year, commencing with a base salary of $450,000 in 1999
and increasing $50,000 per year over the five-year term of the agreement. This
stepped program of annual base salary increases fell within the median parameter
of the peer group data provided by the consultant. The stock option grants
included within this compensation package reflect the upper end of the survey
data for the peer companies. Nonetheless, after due consideration of this
competitive data, Mr. Margolese's performance in achieving our goals and
objectives to date, the level of his management responsibilities and the clear
importance to our future success of retaining the services of Mr. Margolese, the
Committee concluded that the stock options granted to Mr. Margolese under this
agreement constituted an appropriate recognition of past performance and an
important incentive for his continuing contributions toward the achievement of
such success.
POLICY WITH RESPECT TO INTERNAL REVENUE CODE SECTION 162(m)
Section 162(m) of the Code places a $1 million per person limitation on the
tax deduction we may take for compensation paid to our Chief Executive Officer
and our four other highest paid executive officers, except that compensation
constituting performance-based compensation, as defined by the Code, is not
subject to the $1 million limit. The Committee generally intends to grant awards
under our stock option plans consistent with the terms of Section 162(m) so that
such awards will not be subject to the $1 million limit. In other respects, the
Committee expects to take actions in the future that may be necessary to
preserve the deductibility of executive compensation to the extent reasonably
practicable and consistent with other objectives of our compensation program.
However, the Committee reserves the discretion to pay compensation that does not
qualify for exemption under Section 162(m) where the
16
<PAGE>
Committee believes such action to be in the best interest of the Company and its
stockholders. The Committee believes that the compensation terms of Mr.
Margolese's Employment Agreement that would take effect upon his termination
without 'Cause' or his resignation for 'Good Reason' will qualify as a
tax-deductible expense under Section 162(m). The terms of such agreement which
would take effect on a 'Change of Control' will result in compensation exceeding
the deductibility limit.
SUMMARY
The Committee believes that our compensation programs are well structured to
encourage attainment of objectives and to foster a stockholder perspective in
management through potential stock ownership. The Committee believes, further,
that the awards made in 1999 were competitive, appropriate and in our
stockholders long-term interests.
Compensation Committee
LAWRENCE F. GILBERTI
JOSEPH V. VITTORIA
RALPH V. WHITWORTH
17
<PAGE>
PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative performance of our
Common Stock with the Standard & Poor's Composite-500 Stock Index (the
'S&P 500') and the Nasdaq Telecommunications Index from December 31, 1994 (the
last trading day prior to our 1995 fiscal year) and December 31, 1999. The graph
assumes that $100 was invested on December 31, 1994 in each of our Common Stock,
the S&P 500 and the Nasdaq Telecommunications Index and that all dividends were
reinvested.
[PERFORMANCE GRAPH]
TOTAL SHAREHOLDER RETURNS
<TABLE>
<CAPTION>
NASDAQ
DATE SIRIUS S&P 500 TELECOMMUNICATIONS INDEX(1)
---- ------ ------- ---------------------------
<S> <C> <C> <C>
December 31, 1994.................................. $ 100 $100 $100
December 31, 1995.................................. $ 218 $138 $131
December 31, 1996.................................. $ 203 $169 $134
December 31, 1997.................................. $ 834 $226 $196
December 31, 1998.................................. $1,686 $290 $322
December 31, 1999.................................. $2,191 $351 $561
</TABLE>
---------
(1) The Nasdaq Telecommunications Index is a capitalization weighted index
designed to measure the performance of all Nasdaq-traded stocks in the
telecommunications sector, including satellite technology.
By Order of the Board of Directors,
PATRICK L. DONNELLY
Senior Vice President,
New York, New York General Counsel and Secretary
August 21, 2000
18
<PAGE>
APPENDIX 1
SIRIUS SATELLITE RADIO
ADMISSION TICKET
2000 ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, SEPTEMBER 19, 2000
10:00 A.M.
TO BE HELD AT
U.S. TRUST
THE AUDITORIUM, 1(ST) FLOOR
114 WEST 47(TH) STREET
NEW YORK, NEW YORK
THIS TICKET MUST BE PRESENTED TO ENTER THE MEETING
DETACH PROXY CARD HERE
................................................................................
[ ]
The Board of Directors recommends a vote "FOR" each item.
<TABLE>
<S> <C> <C> <C>
1. To elect five (5) members FOR all nominees [ ] WITHHOLD AUTHORITY to vote for [ ] *EXCEPTONS [ ]
to the Board of Directors: listed below all nominees listed below
</TABLE>
Nominees: David Margolese, Robert D. Briskman, Lawrence F. Gilberti, Joseph V.
Vittoria and Ralph V. Whitworth (INSTRUCTIONS: To withhold authority to vote for
any individual nominee, mark the "Exceptions" box and write that nominee's name
in the space provided below.)
*Exceptions ____________________________________________________________________
<TABLE>
<S> <C> <C> <C>
2. Approval of Arthur Andersen LLP as independent auditors. FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
Attending [ ]
meeting
Change of Address and [ ]
or Comments Mark Here
The signature on this Proxy should correspond
exactly with stockholder's name as printed to the
left. In the case of joint tenancies, co-executors,
or co-trustees, both should sign. Persons signing
as Attorney, Executor, Administrator, Trustee or
Guardian should give their full title.
Dated: ____________________________________, 2000
_________________________________________________
Please print name of Stockholder here.
_________________________________________________
Please sign here.
(Please sign, date and return this proxy in Votes must be indicated
the enclosed postage prepaid envelope.) (x) in Black or Blue ink. [X]
Please Detach Here
You Must Detach This Portion of the Proxy Card
Before Returning it in the Enclosed Envelope
<PAGE>
SIRIUS SATELLITE RADIO INC.
Proxy Solicited on behalf of the Board of Directors of
Sirius Satellite Radio Inc.
The undersigned hereby appoints Patrick L. Donnelly and Edward Weber, Jr.,
and each of them, proxies, with full power of substitution in each of them, for
and on behalf of the undersigned to vote as proxies, as directed and permitted
herein to vote your shares of Sirius Satellite Radio Common Stock (including any
shares of Common Stock which you have the right to direct the proxies to vote
under the Sirius Satellite Radio Inc. 401(k) Savings Plan) and Preferred Stock,
at the Annual Meeting of Stockholders of SIRIUS SATELLITE RADIO INC. to be held
on Tuesday, September 19, 2000, at 10:00 a.m., in the Auditorium on the first
floor of U.S. Trust, 114 West 47(th)Street, New York, New York, and at any
adjournments thereof upon matters set forth in the Proxy Statement and, in their
judgment and discretion, upon such other business as may properly come before
the meeting.
This proxy when properly executed will be voted in the manner directed on
the reverse hereof by the Stockholder. If no direction is made, this proxy will
be voted FOR all nominees listed and for Item 2.
(Continued and to be dated and signed on the reverse side.)
SIRIUS SATELLITE RADIO INC.
P.O. BOX 11492
NEW YORK, N.Y. 10203-0492
