Registration No. 333-______________
As filed with the Securities and Exchange Commission on February 29, 2000
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
SIRIUS SATELLITE RADIO INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 52-1700207
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
</TABLE>
1221 AVENUE OF THE AMERICAS, 36TH FLOOR
NEW YORK, NEW YORK 10020
(212) 584-5100
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
CD RADIO INC. 1994 STOCK OPTION PLAN
CD RADIO INC. AMENDED AND RESTATED 1994 DIRECTORS' NONQUALIFIED
STOCK OPTION PLAN
SIRIUS SATELLITE RADIO 1999 LONG-TERM STOCK INCENTIVE PLAN
(FULL TITLE OF THE PLANS)
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
(212) 584-5100
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
-------------------
Copies to:
PAUL D. GINSBERG
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
(212) 373-3000
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Title of each class Amount to be Proposed maximum offering Proposed maximum Amount of
of securities to be registered Registered(1) price per share (2) aggregate offering price (2) registration fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Sirius Satellite Radio 958,750(3) $28.47 $27,295,612.50 $7,206.04
Inc. common stock, par value
$.001 per share (the "Common
Stock"), issuable pursuant to
outstanding stock options
granted under the CD Radio Inc.
1994 Stock Option Plan and the
CD Radio Inc. Amended and
Restated 1994 Directors'
Nonqualified Stock Option Plan
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Shares of Common Stock issuable 4,341,500 $30.30 $131,547,450.00 $34,728.53
pursuant to outstanding stock
options granted under the Sirius
Satellite Radio 1999 Long-Term
Stock Incentive Plan
Shares of Common Stock issuable 5,200,123 $58.78 $305,663,229.94 $80,695.09
pursuant to unissued stock
options which may be granted
under the Sirius Satellite Radio
1999 Long-Term Stock Incentive
Plan
TOTAL 10,500,373 $464,506,292.44 $122,629.66
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus any additional shares of Common Stock that may be issuable pursuant
to the anti-dilution provisions of the CD Radio Inc. 1994 Stock Option
Plan, the CD Radio Inc. Amended and Restated 1994 Directors' Nonqualified
Stock Option Plan and the Sirius Satellite Radio 1999 Long-Term Stock
Incentive Plan. Also includes associated Preferred Stock Purchase Rights,
which initially are attached to and trade with the shares of Common Stock
being registered hereby. Value attributable to such Preferred Stock
Purchase Rights, if any, is reflected in the price of the shares of Common
Stock.
(2) The proposed maximum offering price per share and the registration fee
were calculated in accordance with Rules 457(c) and (h) solely for the
purpose of determining the amount of the registration fee. For shares of
Common Stock issuable pursuant to outstanding stock options, the price is
computed on the basis of the weighted average exercise price. For shares
of Common Stock issuable pursuant to unissued stock options which may be
granted, the price is based on the average of the high and low prices for
shares of Common Stock on February 27, 2000, as reported in the Nasdaq
National Market System, which was $58.78
(3) The remaining 1,600,000 shares of Common Stock reserved for issuance under
the CD Radio Inc. 1994 Stock Option Plan and the CD Radio Inc. Amended and
Restated 1994 Director's Nonqualified Stock Option Plan (the "1994 Plans")
were registered under Form S-8 Registration Statements previously filed
with the Commission. Specifically, 1,250,000 shares of Common Stock
issuable under the 1994 Plans were registered under a Form S-8
Registration Statement filed with the Commission on May 23, 1995 (File No.
33-92588) and 350,000 shares of Common Stock issuable under the 1994 Plans
were registered under a Form S-8 Registration Statement filed with the
Commission on October 30, 1996 (File No. 333-15085). As provided pursuant
to Rule 429 under the Securities Act of 1933, these 1,600,000 shares of
Common Stock are hereby carried forward to this Registration Statement.
Aggregate registration fees of $2,423.17 were paid upon these filing of
the prior Registration Statements.
<PAGE>
EXPLANATORY NOTE
The Section 10(a) corresponding prospectus being delivered by Sirius
Satellite Radio Inc. (the "Company") to participants in each of the CD Radio
Inc. 1994 Stock Option Plan, the CD Radio Inc. Amended and Restated 1994
Directors' Nonqualified Stock Option Plan and the Sirius Satellite Radio 1999
Long-Term Stock Incentive Plan (collectively, the "Plans") as required by Rule
428 under the Securities act of 1933, as amended (the "Securities Act"), has
been prepared in accordance with the requirements of Form S-8 and relates to
shares of common stock, par value $.001 per share, of the Company (the "Common
Stock") which have been reserved for issuance pursuant to each of the Plans. The
information regarding each of the Plans required in the corresponding Section
10(a) prospectus is included in documents being maintained and delivered by the
Company as required by Rule 428 under the Securities Act. The Company shall
provide to participants in each of the Plans a written statement advising them
of the availability without charge, upon written or oral request, of documents
incorporated by reference herein, as is required by Item 2 of Part I of Form
S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 filed with the Commission on March 31,
1999, as amended by the Company's Report on Form 10-K/A filed
with the Commission on April 30, 1999;
2. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 30, 1999 filed with the Commission on May 14,
1999;
3. The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999 filed with the Commission on August 12,
1999;
4. The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999, filed with the Commission on
November 15, 1999;
5. The Company's Current Report on Form 8-K filed with the
Commission on January 6, 1999.
6. The Company's Current Report on Form 8-K dated September 29,
1999 filed with the Commission on October 13, 1999;
7. The Company's Current Report on Form 8-K dated December 23,
1999 filed with the Commission on December 28, 1999;
8. The Company's Current Report on Form 8-K dated January 28,
2000 filed with the Commission on February 1, 2000; and
9. The description of the Common Stock contained in our
Registration Statement on Form 8-A filed pursuant to Section
12(b) of the Securities Exchange Act of 1934 and
<PAGE>
declared effective on September 13, 1994 (including any
amendment or report filed for the purpose of updating such
description).
All other documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, subsequent to the date of this registration statement and prior to the
filing of a post-effective amendment which indicates that all securities
registered hereby have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded to
the extent that a statement contained in this registration statement or in any
other subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Patrick L. Donnelly, Esq., whose legal opinion with respect to the
securities registered hereunder is filed as Exhibit 5.1 hereto, is an employee
of the Company and may participate in the Plans and other benefit plans
established by the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a
corporation to indemnify its directors, officers, employees and agents against
certain liabilities they may incur in such capacities, including liabilities
under the Securities Act of 1933, as amended, provided they act in good faith
and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation. The Company's Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws require the Company to indemnify
its officers and directors to the full extent permitted by Delaware law,
provided that such officers or directors acted in good faith and in a manner
reasonably believed to be in, or not opposed to, the best interests of the
Company and, with respect to any criminal action or proceeding, with no
reasonable cause to expect his or her action was unlawful. Also, indemnification
under the Company's Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws will not be available where an officer or director
is adjudged to be liable for negligence or misconduct in the performance of his
or her duty to the Company. The Company's Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws also provide for the Company to
purchase and maintain insurance on behalf of any past or current officer or
director against any liability that may be asserted or arise from his or her
role as an officer or director.
Section 102 of the Delaware General Corporation Law authorizes a
corporation to limit or eliminate its directors' liability to the corporation or
its stockholders for monetary damages for breaches of fiduciary duties, other
than for (i) breaches of the duty of loyalty, (ii) acts or omissions involving
bad faith, intentional misconduct or knowing violations of the law, (iii)
unlawful payments of dividends, stock purchases or redemptions, or (iv)
transactions from which a director derives an improper personal benefit. The
Company's Amended and Restated Certificate of Incorporation contains provisions
limiting the liability of the directors to the Company and to its stockholders
to the full extent permitted by Delaware law.
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes: (i) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement to include any material information with respect to
the plan of distribution not previously disclosed in this registration statement
or any material change to such information in this registration statement; (ii)
that, for the purpose of determining any liability under the Securities Act of
1933, as amended, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and (iii) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934, as amended (and each filing of an
employee benefit plan's annual report pursuant to Section15(d) of the Securities
Exchange Act of 1934), that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, the
registrant's Amended and Restated Certificate of Incorporation or Amended and
Restated Bylaws, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on February 29,
2000.
SIRIUS SATELLITE RADIO INC.
By: /s/ Patrick L. Donnelly
---------------------------------------
Patrick L. Donnelly
Senior Vice President,
General Counsel and Secretary
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Patrick L. Donnelly and Douglas
Kaplan, and each of them, his true and lawful agent, proxy and attorney-in-fact,
each acting alone with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to (i) act on, sign
and file with the Commission any and all amendments (including post-effective
amendments) to this registration statement together with all schedules and
exhibits thereto, (ii) act on, sign and file such certificates, instruments,
agreements and other documents as may be necessary or appropriate in connection
therewith, and (iii) take any and all actions which may be necessary or
appropriate in connection therewith, granting unto such agents, proxies and
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or appropriate to be done, as fully for
all intents and purposes as he might or could do in person, hereby approving,
ratifying and confirming all that such agents, proxies and attorneys-in-fact,
any of them or any of his or their substitutes may lawfully do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <S> <C>
/s/ David Margolese Chairman and Chief Executive Officer February 29, 2000
------------------------ (Principal Executive Officer and
David Margolese Principal Financial Officer)
/s/ Robert D. Briskman Director February 29, 2000
------------------------
Robert D. Briskman
/s/ Lawrence F. Gilberti Director February 29, 2000
-------------------------
Lawrence F. Gilberti
/s/ Joseph V. Vittoria Director February 29, 2000
---------------------------
Joseph V. Vittoria
/s/ Ralph V. Whitworth Director February 29, 2000
-------------------------
Ralph V. Whitworth
/s/ Edward Weber, Jr. Vice President and Controller February 29, 2000
------------------------ (Principal Accounting Officer)
Edward Weber, Jr.
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- ------------------------
<S> <C>
4.1 Certificate of Ownership and Merger merging Sirius Satellite Radio Inc. into CD
Radio Inc. dated November 18, 1999 (filed herewith).
4.2 Certificate of Amendment, dated June 16, 1997, to the CD Radio Inc. Certificate of
Incorporation and the Company's Amended and Restated Certificate of Incorporation
dated January 31, 1994 (incorporated by reference to Exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1999).
4.3 Amended and Restated By-Laws (incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on Form
S-1 (File No. 33-74782) (the "S-1 Registration Statement")).
4.4 Sirius Satellite Radio 1999 Long-Term Stock Incentive Plan
(filed herewith).
4.5 CD Radio Inc. 1994 Stock Option Plan (incorporated by reference to Exhibit 10.21
to the S-1 Registration Statement).
4.6 CD Radio Inc. Amended and Restated 1994 Directors' Nonqualified Stock Option Plan
(incorporated by reference to Exhibit 10.22 to the Company's Annual Report on Form
10-K for the year ended December 31, 1995).
5.1 Opinion of Patrick L. Donnelly, Senior Vice President,
General Counsel and Secretary of the Company (filed
herewith).
23.1 Consent of PricewaterhouseCoopers LLP (filed herewith).
23.2 Consent of Patrick L. Donnelly (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
</TABLE>
<PAGE>
Exhibit 4.1
Certificate of Ownership and Merger
Merging
Sirius Satellite Radio Inc.
into
CD Radio Inc.
---------------------------
Pursuant to Section 253 of the General
Corporation Law of the State of Delaware
----------------------------
CD Radio Inc. (the "Corporation"), a corporation organized and
existing under the laws of the State of Delaware:
DOES HEREBY CERTIFY:
FIRST: That the Corporation owns all of the outstanding shares
of common stock, par value $.01 per share, of Sirius Satellite Radio Inc., a
Delaware corporation ("Sub"), and Sub has no class of stock outstanding other
than said common stock.
SECOND: That the Corporation, by resolutions of its Board of
Directors, duly adopted on November 11, 1999 at a meeting of its Board of
Directors, determined to merge Sub with and into the Corporation pursuant to
Section 253 of the General Corporation Law of the State of Delaware (the
"DGCL"), with the Corporation as the surviving corporation (the "Merger"). The
resolutions authorizing the Merger are as follows:
"WHEREAS, the Corporation now owns 100 shares of common stock,
par value $.01 per share, of Sirius Satellite Radio Inc., a Delaware
corporation ("Sub"), which shares constitute all of the issued and
outstanding capital stock of Sub; and
WHEREAS, it is deemed advisable that Sub merge with and into
the Corporation (the "Merger");
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors of
the Corporation hereby authorizes the Merger, with the Corporation to
be the surviving corporation (the "Surviving Corporation") in such
Merger; and further
RESOLVED, that the Merger shall become effective (the
"Effective Time") upon the filing of a Certificate of Ownership and
Merger with the Secretary of State of the State of Delaware in
accordance with the provisions of Sections 103 and 253 of the DGCL; and
further
RESOLVED, that the terms of the Merger are as follows:
(a) Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of the holders thereof,
each share of common stock, par value $.01 per share, of Sub
outstanding immediately prior to the Effective Time shall be canceled.
(b) Name of Surviving Corporation. At the Effective Time and
without any further action on the part of the Corporation or Sub, the
name of the Surviving Corporation shall be
<PAGE>
changed to "Sirius Satellite Radio Inc."
(c) Certificate of Incorporation and By-Laws of the Surviving
Corporation. At the Effective Time and without any further action on
the part of the Corporation or Sub, the Certificate of Incorporation
and By-Laws of the Corporation shall be the Certificate of
Incorporation and By-Laws of the Surviving Corporation, except that all
references therein to "CD Radio Inc." shall hereinafter be deemed to
refer to "Sirius Satellite Radio Inc."
(d) Directors and Officers of the Surviving Corporation. The
directors and officers of the Corporation immediately prior to the
Effective Time shall be the directors and officers of the Surviving
Corporation.
; and further
RESOLVED, that David Margolese, Chairman and Chief Executive
Officer of the Corporation, and Patrick L. Donnelly, Senior Vice
President, General Counsel and Secretary of the Corporation, be, and
each of them hereby is, authorized and directed to make and execute a
Certificate of Ownership and Merger setting forth the resolutions
authorizing the Corporation to merge Sub with and into the Corporation
and the date of adoption thereof, and to cause the same to be filed
with the Secretary of State of the State of Delaware and to do all acts
and things, whether within or without the State of Delaware, which may
be in any way whatsoever necessary or proper to effect the Merger; and
further
RESOLVED, that all actions heretofore taken by any director or
officer of the Corporation in connection with any matter referred to in
the foregoing resolutions are hereby approved, ratified and confirmed
in all respects."
THIRD: That the Merger shall become effective upon the filing
of this Certificate of Ownership and Merger with the Secretary of State of
Delaware in accordance with the provisions of Sections 103 and 253 of the DGCL.
IN WITNESS WHEREOF, CD RADIO INC. has caused this Certificate
of Ownership and Merger to be signed by Patrick L. Donnelly, its Senior Vice
President, General Counsel and Secretary, this 18th day of November, 1999.
CD RADIO INC.
By: /s/ Patrick L. Donnelly
-------------------------------------
Name: Patrick L. Donnelly
Title: Senior Vice President,
General Counsel and Secretary
<PAGE>
Exhibit 4.4
SIRIUS SATELLITE RADIO
1999 LONG-TERM STOCK INCENTIVE PLAN
SECTION 1. Purpose. The purposes of this Sirius Satellite Radio 1999
Long-Term Stock Incentive Plan are to promote the interests of Sirius Satellite
Radio Inc. and its stockholders by (i) attracting and retaining employees of,
and consultants to, the Company and its Affiliates, as defined below; (ii)
motivating such individuals by means of performance-related incentives to
achieve longer-range performance goals; and (iii) enabling such individuals to
participate in the long-term growth and financial success of the Company.
SECTION 2. Definitions. As used in the Plan, the following terms shall
have the meanings set forth below:
"Affiliate" shall mean (i) any entity that, directly or indirectly, is
controlled by, controls or is under common control with, the Company and (ii)
any entity in which the Company has a significant equity interest, in either
case as determined by the Committee.
"Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock Award, Restricted Stock Unit Award, Performance Award, Other Stock-Based
Award or Performance Compensation Award made or granted from time to time
hereunder.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Change of Control" shall mean the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition, in one or a
series of related transactions, of all or substantially all of the assets of the
Company to any "person" or "group" (as such terms are used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act), (ii) any person or group is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person shall be deemed to have "beneficial ownership" of all
shares that any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 20% of the total voting power of the voting stock of
the Company, including by way of merger, consolidation or otherwise or (iii)
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board (together with any new directors whose
election by such Board or whose nomination for election by the stockholders of
the Company was approved by a vote of a majority of the directors of the
Company, then still in office, who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board, then in
office.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Committee" shall mean a committee of the Board designated by the Board
to administer the Plan and composed of not less two directors, each of whom is
required to be a "Non-Employee Director" (within the meaning of Rule 16b-3) and
an "outside director" (within the meaning of Section 162(m) of the Code) to the
extent Rule 16b-3 and Section 162(m) of the Code, respectively, are applicable
to the Company and the Plan. If at any time such a committee has not been so
designated, the Board shall constitute the Committee.
"Company" shall mean Sirius Satellite Radio Inc., together with any
successor thereto.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean, (A) with respect to any property other
than Shares, the fair market value of such property determined by such methods
or procedures as shall be established from time to time by the Committee and (B)
with respect to the Shares, as of any date, (i) the mean between the high and
low sales prices
<PAGE>
of the Shares on the Nasdaq Stock Market for such date (or if not then trading
on the Nasdaq Stock Market, the mean between the high and low sales price of the
Shares on the stock exchange or over-the-counter market on which the Shares are
principally trading on such date), or, if there were no sales on such date, on
the closest preceding date on which there were sales of Shares or (ii) in the
event there shall be no public market for the Shares on such date, the fair
market value of the Shares as determined in good faith by the Committee.
"Incentive Stock Option" shall mean a right to purchase Shares from the
Company that is granted under Section 6 of the Plan and that is intended to meet
the requirements of Section 422 of the Code or any successor provision thereto.
"Negative Discretion" shall mean the discretion authorized by the Plan
to be applied by the Committee to eliminate or reduce the size of a Performance
Compensation Award; provided that the exercise of such discretion would not
cause the Performance Compensation Award to fail to qualify as
"performance-based compensation" under Section 162(m) of the Code. By way of
example and not by way of limitation, in no event shall any discretionary
authority granted to the Committee by the Plan including, but not limited to,
Negative Discretion, be used to (a) grant or provide payment in respect of
Performance Compensation Awards for a Performance Period if the Performance
Goals for such Performance Period have not been attained or (b) increase a
Performance Compensation Award above the maximum amount payable under Sections
4(a) or 11(d)(vi) of the Plan. Notwithstanding anything herein to the contrary,
in no event shall Negative Discretion be exercised by the Committee with respect
to any Option or Stock Appreciation Right (other than an Option or Stock
Appreciation Right that is intended to be a Performance Compensation Award under
Section 11 of the Plan).
"Non-Qualified Stock Option" shall mean a right to purchase Shares from
the Company that is granted under Section 6 of the Plan and that is not intended
to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
"Other Stock-Based Award" shall mean any right granted under Section 10
of the Plan.
"Participant" shall mean any employee of, or consultant to, the Company
or its Subsidiaries eligible for an Award under Section 5 and selected by the
Committee to receive an Award under the Plan.
"Performance Award" shall mean any right granted under Section 9 of the
Plan.
"Performance Compensation Award" shall mean any Award designated by the
Committee as a Performance Compensation Award pursuant to Section 11 of the
Plan.
"Performance Criteria" shall mean the criterion or criteria that the
Committee shall select for purposes of establishing the Performance Goal(s) for
a Performance Period with respect to any Performance Compensation Award under
the Plan. The Performance Criteria that will be used to establish the
Performance Goal(s) shall be based on the attainment of specific levels of
performance of the Company (or an Affiliate, division or operational unit of the
Company) and shall be limited to the following: return on net assets, return on
shareholders' equity, return on assets, return on capital, shareholder returns,
profit margin, earnings per Share, net earnings, operating earnings, earnings
before interest, taxes, depreciation and amortization, number of subscribers,
growth of subscribers, Share price or sales or market share. To the extent
required under Section 162(m) of the Code, the Committee shall, within the first
90 days of a Performance Period (or, if longer, within the maximum period
allowed under Section 162(m) of the Code), define in an objective fashion the
manner of calculating the Performance Criteria it selects to use for such
Performance Period.
"Performance Formula" shall mean, for a Performance Period, the one or
more objective formulas applied against the relevant Performance Goal to
determine, with regard to the Performance Compensation Award of a particular
Participant, whether all, some portion but less than all, or none of the
Performance Compensation Award has been earned for the Performance Period.
"Performance Goals" shall mean, for a Performance Period, the one or
more goals established by the Committee for the Performance Period based upon
the Performance Criteria. The Committee is authorized at any time during the
first 90 days of a Performance Period, or at any time thereafter (but only to
the extent the
<PAGE>
exercise of such authority after the first 90 days of a Performance Period would
not cause the Performance Compensation Awards granted to any Participant for the
Performance Period to fail to qualify as "performance-based compensation" under
Section 162(m) of the Code), in its sole and absolute discretion, to adjust or
modify the calculation of a Performance Goal for such Performance Period to the
extent permitted under Section 162(m) of the Code in order to prevent the
dilution or enlargement of the rights of Participants, (a) in the event of, or
in anticipation of, any unusual or extraordinary corporate item, transaction,
event or development affecting the Company; or (b) in recognition of, or in
anticipation of, any other unusual or nonrecurring events affecting the Company,
or the financial statements of the Company, or in response to, or in
anticipation of, changes in applicable laws, regulations, accounting principles,
or business conditions.
"Performance Period" shall mean the one or more periods of time of at
least one year in duration, as the Committee may select, over which the
attainment of one or more Performance Goals will be measured for the purpose of
determining a Participant's right to and the payment of a Performance
Compensation Award.
"Person" shall mean any individual, corporation, partnership,
association, limited liability company, joint-stock company, trust,
unincorporated organization, government or political subdivision thereof or
other entity.
"Plan" shall mean this Sirius Satellite Radio 1999 Long-Term Stock
Incentive Plan.
"Restricted Stock" shall mean any Share granted under Section 8 of the
Plan.
"Restricted Stock Unit" shall mean any unit granted under Section 8 of
the Plan.
"Rule 16b-3" shall mean Rule 16b-3 as promulgated and interpreted by
the SEC under the Exchange Act, or any successor rule or regulation thereto as
in effect from time to time.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto and shall include the Staff thereof.
"Shares" shall mean the common stock of the Company, $.001 par value,
or such other securities of the Company (i) into which such common stock shall
be changed by reason of a recapitalization, merger, consolidation, split-up,
combination, exchange of shares or other similar transaction or (ii) as may be
determined by the Committee pursuant to Section 4(b) of the Plan.
"Stock Appreciation Right" shall mean any right granted under Section 7
of the Plan.
"Substitute Awards" shall have the meaning specified in Section 4(c) of
the Plan.
SECTION 3. Administration. (a) The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law, and in addition
to other express powers and authorizations conferred on the Committee by the
Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a
Participant and designate those Awards which shall constitute Performance
Compensation Awards; (iii) determine the number of Shares to be covered by, or
with respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, other Awards or other
property, or canceled, forfeited, or suspended and the method or methods by
which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi)
determine whether, to what extent, and under what circumstances cash, Shares,
other securities, other Awards, other property, and other amounts payable with
respect to an Award (subject to Section 162(m) of the Code with respect to
Performance Compensation Awards) shall be deferred either automatically or at
the election of the holder thereof or of the Committee; (vii) interpret,
administer or reconcile any inconsistency, correct any defect, resolve
ambiguities and/or supply any omission in the Plan and any instrument or
agreement relating to, or Award made under, the Plan; (viii) establish, amend,
suspend, or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; (ix) establish and
administer Performance Goals and certify whether, and to what extent, they have
been attained; and (x) make any other determination and take any other action
that the Committee deems necessary or desirable for the administration of the
Plan.
<PAGE>
(b) Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, any Affiliate, any Participant, any holder or
beneficiary of any Award, and any stockholder.
(c) The mere fact that a Committee member shall fail to qualify as a
"Non-Employee Director" or "outside director" within the meaning of Rule 16b-3
and Section 162(m) of the Code, respectively, shall not invalidate any award
made by the Committee which award is otherwise validly made under the Plan.
(d) No member of the Committee shall be liable to any Person for any
action or determination made in good faith with respect to the Plan or any Award
hereunder.
(e) With respect to any Performance Compensation Award granted to a
Covered Employee (within the meaning of Section 162(m) of the Code) under the
Plan, the Plan shall be interpreted and construed in accordance with Section
162(m) of the Code.
(f) Notwithstanding the foregoing, the Committee may delegate to one or
more officers of the Company the authority to grant awards to Participants who
are not officers or directors of the Company subject to Section 16 of the
Exchange Act or Covered Employees (within the meaning of Section 162(m) of the
Code).
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section
4(b), the aggregate number of Shares with respect to which Awards may be granted
from time to time under the Plan shall in the aggregate not exceed, at any time,
15% of the sum of (i) the issued and outstanding Shares (other than Shares
issued upon exercise of stock options by employees or directors of the Company
pursuant to the Plan, the Company's Amended and Restated 1994 Stock Option Plan,
the Company's Amended and Restated 1994 Director's Nonqualified Stock Option
Plan or otherwise), (ii) any Shares which are issuable as a result of any
conversion, exchange or exercise of any preferred stock, warrant or other
security of the Company which is outstanding on the date of determination; and
(iii) the Shares which have been issued or are issuable to employees,
consultants and directors of the Company pursuant to the Plan, the Company's
Amended and Restated 1994 Stock Option Plan and the Company's Amended and
Restated 1994 Directors' Nonqualified Stock Option Plan; provided, however, that
the aggregate number of Shares with respect to which Incentive Stock Options may
be granted under the Plan shall be 500,000. The maximum number of Shares with
respect to which Options and Stock Appreciation Rights may be granted to any
Participant in any fiscal year shall be 1.8 million and the maximum number of
Shares which may be paid to a Participant in the Plan in connection with the
settlement of any Award(s) designated as "Performance Compensation Awards" in
respect of a single Performance Period shall be 1,000,000 or, in the event such
Performance Compensation Award is paid in cash, the equivalent cash value
thereof. If, after the effective date of the Plan, any Shares covered by an
Award granted under the Plan, or to which such an Award relates, are forfeited,
or if an Award has expired, terminated or been canceled for any reason
whatsoever (other than by reason of exercise or vesting), then the Shares
covered by such Award shall again be, or shall become, Shares with respect to
which Awards may be granted hereunder.
(b) Adjustments. Notwithstanding any provisions of the Plan to the
contrary, in the event that the Committee determines in its sole discretion that
any dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such
that an adjustment is appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any or
all of (i) the number of Shares or other securities of the Company (or number
and kind of other securities or property) with respect to which Awards may be
granted, (ii) the number of Shares or other securities of the Company (or number
and kind of other securities or property) subject to outstanding Awards, and
(iii) the grant or exercise price with respect to any Award or, if deemed
appropriate, make provision for a cash payment to the holder of an outstanding
Award in consideration for the cancellation of such Award, which, in the case of
Options and Stock Appreciation Rights shall equal the excess, if any, of the
Fair Market Value of the Shares subject to such Options or Stock Appreciation
Rights over the aggregate exercise price or grant price of such Options or Stock
Appreciation
<PAGE>
Rights.
(c) Substitute Awards. Awards may, in the discretion of the Committee,
be made under the Plan in assumption of, or in substitution for, outstanding
awards previously granted by the Company or its Affiliates or a company acquired
by the Company or with which the Company combines ("Substitute Awards"). The
number of Shares underlying any Substitute Awards shall be counted against the
aggregate number of Shares available for Awards under the Plan.
(d) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
SECTION 5. Eligibility. Any employee of, or consultant to, the Company
or any of its Affiliates (including any prospective employee) shall be eligible
to be selected as a Participant. The Plan will include the ten-year
Non-Qualified Stock Options to purchase 1,800,000 shares of Common Stock, at an
exercise price of $31.50 per share, that were issued to David Margolese (subject
to stockholder approval of the Plan) effective January 1, 1999 in connection
with his employment agreement.
SECTION 6. Stock Options.
(a) Grant. Subject to the terms of the Plan, the Committee shall have
sole and complete authority to determine the Participants to whom Options shall
be granted, the number of Shares to be covered by each Option, the exercise
price therefor and the conditions and limitations applicable to the exercise of
the Option. The Committee shall have the authority to grant Incentive Stock
Options, or to grant Non-Qualified Stock Options, or to grant both types of
Options. In the case of Incentive Stock Options, the terms and conditions of
such grants shall be subject to and comply with such rules as may be prescribed
by Section 422 of the Code, as from time to time amended, and any regulations
implementing such statute. All Options when granted under the Plan are intended
to be Non-Qualified Stock Options, unless the applicable Award Agreement
expressly states that the Option is intended to be an Incentive Stock Option. If
an Option is intended to be an Incentive Stock Option, and if for any reason
such Option (or any portion thereof) shall not qualify as an Incentive Stock
Option, then, to the extent of such nonqualification, such Option (or portion
thereof) shall be regarded as a Non-Qualified Stock Option appropriately granted
under the Plan; provided that such Option (or portion thereof) otherwise
complies with the Plan's requirements relating to Non-Qualified Stock Options.
(b) Exercise Price. The Committee shall establish the exercise price at
the time each Option is granted, which exercise price shall be set forth in the
applicable Award Agreement.
(c) Exercise. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable Award Agreement or thereafter. The
Committee may impose such conditions with respect to the exercise of Options,
including without limitation, any relating to the application of federal or
state securities laws, as it may deem necessary or advisable. Options with an
exercise price equal to or greater than the Fair Market Value per Share as of
the date of grant are intended to qualify as "performance-based compensation"
under Section 162(m) of the Code. In the sole discretion of the Committee,
Options may be granted with an exercise price that is less than the Fair Market
Value per Share and such Options may, but need not, be intended to qualify as
performance-based compensation in accordance with Section 11 hereof.
(d) Payment.
(i) No Shares shall be delivered pursuant to any exercise of an Option
until payment in full of the aggregate exercise price therefor is received by
the Company. Such payment may be made in cash, or its equivalent, or (x) by
exchanging Shares owned by the optionee (which are not the subject of any pledge
or other security interest and which have been owned by such optionee for at
least six months), (y) subject to such rules as may be established by the
Committee, through delivery of irrevocable instructions to a broker to sell the
Shares otherwise deliverable upon the exercise of the Option and to deliver
promptly to the Company an amount equal to the aggregate exercise price, or (z)
with the consent of the Committee in its sole discretion, by the promissory note
and agreement of a Participant providing for the payment with interest of the
unpaid balance accruing at a rate not less than needed to avoid the imputation
of income under Section 7872 of the Code and upon such terms and conditions
(including the security, if any, therefor) as the Committee may determine, or by
<PAGE>
a combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any such Shares and the principal
face value of any promissory note so tendered to the Company as of the date of
such tender is at least equal to such aggregate exercise price.
(ii) Wherever in this Plan or any Award Agreement a Participant is
permitted to pay the exercise price of an Option or taxes relating to the
exercise of an Option by delivering Shares, the Participant may, subject to
procedures satisfactory to the Committee, satisfy such delivery requirement by
presenting proof of beneficial ownership of such Shares, in which case the
Company shall treat the Option as exercised without further payment and shall
withhold such number of Shares from the Shares acquired by the exercise of the
Option.
SECTION 7. Stock Appreciation Rights.
(a) Grant. Subject to the provisions of the Plan, the Committee shall
have sole and complete authority to determine the Participants to whom Stock
Appreciation Rights shall be granted, the number of Shares to be covered by each
Stock Appreciation Right Award, the grant price thereof and the conditions and
limitations applicable to the exercise thereof. Stock Appreciation Rights with a
grant price equal to or greater than the Fair Market Value per Share as of the
date of grant are intended to qualify as "performance-based compensation" under
Section 162(m) of the Code. In the sole discretion of the Committee, Stock
Appreciation Rights may be granted with an exercise price that is less than the
Fair Market Value per Share and such Stock Appreciation Rights may, but need
not, be intended to qualify as performance-based compensation in accordance with
Section 11 hereof. Stock Appreciation Rights may be granted in tandem with
another Award, in addition to another Award, or freestanding and unrelated to
another Award. Stock Appreciation Rights granted in tandem with or in addition
to an Award may be granted either before, at the same time as the Award or at a
later time.
(b) Exercise and Payment. A Stock Appreciation Right shall entitle the
Participant to receive an amount equal to the excess of the Fair Market Value of
a Share on the date of exercise of the Stock Appreciation Right over the grant
price thereof. The Committee shall determine in its sole discretion whether a
Stock Appreciation Right shall be settled in cash, Shares or a combination of
cash and Shares.
(c) Other Terms and Conditions. Subject to the terms of the Plan and
any applicable Award Agreement, the Committee shall determine, at or after the
grant of a Stock Appreciation Right, the term, methods of exercise, methods and
form of settlement, and any other terms and conditions of any Stock Appreciation
Right. Any such determination by the Committee may be changed by the Committee
from time to time and may govern the exercise of Stock Appreciation Rights
granted or exercised prior to such determination as well as Stock Appreciation
Rights granted or exercised thereafter. The Committee may impose such conditions
or restrictions on the exercise of any Stock Appreciation Right as it shall deem
appropriate.
SECTION 8. Restricted Stock and Restricted Stock Units.
(a) Grant. Subject to the provisions of the Plan, the Committee shall
have sole and complete authority to determine the Participants to whom Shares of
Restricted Stock and Restricted Stock Units shall be granted, the number of
Shares of Restricted Stock and/or the number of Restricted Stock Units to be
granted to each Participant, the duration of the period during which, and the
conditions, if any, under which, the Restricted Stock and Restricted Stock Units
may be forfeited to the Company, and the other terms and conditions of such
Awards.
(b) Transfer Restrictions. Shares of Restricted Stock and Restricted
Stock Units may not be sold, assigned, transferred, pledged or otherwise
encumbered, except, in the case of Restricted Stock, as provided in the Plan or
the applicable Award Agreements. Certificates issued in respect of Shares of
Restricted Stock shall be registered in the name of the Participant and
deposited by such Participant, together with a stock power endorsed in blank,
with the Company. Upon the lapse of the restrictions applicable to such Shares
of Restricted Stock, the Company shall deliver such certificates to the
Participant or the Participant's legal representative.
(c) Payment. Each Restricted Stock Unit shall have a value equal to the
Fair Market Value of a Share. Restricted Stock Units shall be paid in cash,
Shares, other securities or other property, as determined in the sole discretion
of the Committee, upon the lapse of the restrictions applicable thereto, or
otherwise in accordance with the applicable Award Agreement. Dividends paid on
any Shares of Restricted Stock may be paid directly to the Participant, withheld
by the Company subject to vesting of the Restricted Shares pursuant to the terms
of the applicable Award Agreement, or may be reinvested in additional Shares of
Restricted Stock or in additional
<PAGE>
Restricted Stock Units, as determined by the Committee in its sole discretion.
SECTION 9. Performance Awards.
(a) Grant. The Committee shall have sole and complete authority to
determine the Participants who shall receive a "Performance Award", which shall
consist of a right which is (i) denominated in cash or Shares, (ii) valued, as
determined by the Committee, in accordance with the achievement of such
performance goals during such performance periods as the Committee shall
establish, and (iii) payable at such time and in such form as the Committee
shall determine.
(b) Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the Performance Goals
to be achieved during any Performance Period, the length of any Performance
Period, the amount of any Performance Award and the amount and kind of any
payment or transfer to be made pursuant to any Performance Award.
(c) Payment of Performance Awards. Performance Awards may be paid in a
lump sum or in installments following the close of the Performance Period or, in
accordance with procedures established by the Committee, on a deferred basis.
SECTION 10. Other Stock-Based Awards.
(a) General. The Committee shall have authority to grant to
Participants an "Other Stock-Based Award", which shall consist of any right
which is (i) not an Award described in Sections 6 through 9 above and (ii) an
Award of Shares or an Award denominated or payable in, valued in whole or in
part by reference to, or otherwise based on or related to, Shares (including,
without limitation, securities convertible into Shares), as deemed by the
Committee to be consistent with the purposes of the Plan; provided, however,
that any such rights must comply, to the extent deemed desirable by the
Committee, with Rule 16b-3 and applicable law. Subject to the terms of the Plan
and any applicable Award Agreement, the Committee shall determine the terms and
conditions of any such Other Stock-Based Award, including the price, if any, at
which securities may be purchased pursuant to any Other Stock-Based Award
granted under this Plan.
(b) Dividend Equivalents. In the sole and complete discretion of the
Committee, an Award, whether made as an Other Stock-Based Award under this
Section 10 or as an Award granted pursuant to Sections 6 through 9 hereof, may
provide the Participant with dividends or dividend equivalents, payable in cash,
Shares, other securities or other property on a current or deferred basis.
SECTION 11. Performance Compensation Awards.
(a) General. The Committee shall have the authority, at the time of
grant of any Award described in Sections 6 through 10 (other than Options and
Stock Appreciation Rights granted with an exercise price or grant price, as the
case may be, equal to or greater than the Fair Market Value per Share on the
date of grant), to designate such Award as a Performance Compensation Award in
order to qualify such Award as "performance-based compensation" under Section
162(m) of the Code.
(b) Eligibility. The Committee will, in its sole discretion, designate
within the first 90 days of a Performance Period (or, if longer, within the
maximum period allowed under Section 162(m) of the Code) which Participants will
be eligible to receive Performance Compensation Awards in respect of such
Performance Period. However, designation of a Participant eligible to receive an
Award hereunder for a Performance Period shall not in any manner entitle the
Participant to receive payment in respect of any Performance Compensation Award
for such Performance Period. The determination as to whether or not such
Participant becomes entitled to payment in respect of any Performance
Compensation Award shall be decided solely in accordance with the provisions of
this Section 11. Moreover, designation of a Participant eligible to receive an
Award hereunder for a particular Performance Period shall not require
designation of such Participant eligible to receive an Award hereunder in any
subsequent Performance Period and designation of one person as a Participant
eligible to receive an Award hereunder shall not require designation of any
other person as a Participant eligible to receive an Award hereunder in such
period or in any other period.
(c) Discretion of Committee with Respect to Performance Compensation
Awards. With regard to a
<PAGE>
particular Performance Period, the Committee shall have full discretion to
select the length of such Performance Period, the type(s) of Performance
Compensation Awards to be issued, the Performance Criteria that will be used to
establish the Performance Goal(s), the kind(s) and/or level(s) of the
Performance Goals(s) is/are to apply to the Company and the Performance Formula.
Within the first 90 days of a Performance Period (or, if longer, within the
maximum period allowed under Section 162(m) of the Code), the Committee shall,
with regard to the Performance Compensation Awards to be issued for such
Performance Period, exercise its discretion with respect to each of the matters
enumerated in the immediately preceding sentence of this Section 11(c) and
record the same in writing.
(d) Payment of Performance Compensation Awards (i) Condition to Receipt
of Payment. Unless otherwise provided in the applicable Award Agreement, a
Participant must be employed by the Company on the last day of a Performance
Period to be eligible for payment in respect of a Performance Compensation Award
for such Performance Period.
(ii) Limitation. A Participant shall be eligible to receive payment in
respect of a Performance Compensation Award only to the extent that: (1) the
Performance Goals for such period are achieved; and (2) the Performance Formula
as applied against such Performance Goals determines that all or some portion of
such Participant's Performance Award has been earned for the Performance Period.
(iii) Certification. Following the completion of a Performance Period,
the Committee shall meet to review and certify in writing whether, and to what
extent, the Performance Goals for the Performance Period have been achieved and,
if so, to calculate and certify in writing that amount of the Performance
Compensation Awards earned for the period based upon the Performance Formula.
The Committee shall then determine the actual size of each Participant's
Performance Compensation Award for the Performance Period and, in so doing, may
apply Negative Discretion, if and when it deems appropriate.
(iv) Negative Discretion. In determining the actual size of an
individual Performance Award for a Performance Period, the Committee may reduce
or eliminate the amount of the Performance Compensation Award earned under the
Performance Formula in the Performance Period through the use of Negative
Discretion if, in its sole judgement, such reduction or elimination is
appropriate.
(v) Timing of Award Payments. The Awards granted for a Performance
Period shall be paid to Participants as soon as administratively possible
following completion of the certifications required by this Section 11.
(vi) Maximum Award Payable. Notwithstanding any provision contained in
the Plan to the contrary, the maximum Performance Compensation Award payable to
any one Participant under the Plan for a Performance Period is 1,000,000 Shares
or, in the event the Performance Compensation Award is paid in cash, the
equivalent cash value thereof on the last day of the Performance Period to which
such Award relates. Furthermore, any Performance Compensation Award that has
been deferred shall not (between the date as of which the Award is deferred and
the payment date) increase (i) with respect to Performance Compensation Award
that is payable in cash, by a measuring factor for each fiscal year greater than
a reasonable rate of interest set by the Committee or (ii) with respect to a
Performance Compensation Award that is payable in Shares, by an amount greater
than the appreciation of a Share from the date such Award is deferred to the
payment date.
SECTION 12. Amendment and Termination.
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided,
however, that no such amendment, alteration, suspension, discontinuation or
termination shall be made without stockholder approval if such approval is
necessary to comply with any tax or regulatory requirement applicable to the
Plan; and provided, further, that any such amendment, alteration, suspension,
discontinuance or termination that would impair the rights of any Participant or
any holder or beneficiary of any Award previously granted shall not be effective
without the consent of the affected Participant, holder or beneficiary.
(b) Amendments to Awards. The Committee may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofore granted, prospectively or retroactively;
provided that any such waiver, amendment, alteration, suspension,
discontinuance, cancellation
<PAGE>
or termination that would impair the rights of any Participant or any holder or
beneficiary of any Award previously granted shall not be effective without the
consent of the affected Participant, holder or beneficiary.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee is hereby authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition
of unusual or nonrecurring events (including, without limitation, the events
described in Section 4(b) hereof) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan; provided, however, that no such adjustment shall be authorized
to the extent that such authority or adjustment would cause an Award designated
by the Committee as a Performance Compensation Award under Section 11 of the
Plan to fail to qualify as "performance-based compensation" under Section 162(m)
of the Code.
SECTION 13. Change of Control. In the event of a Change of Control
after the date of the adoption of this Plan, any outstanding Awards then held by
Participants which are unexercisable or otherwise unvested shall automatically
be deemed exercisable or otherwise vested, as the case may be, effective as of
immediately prior to such Change of Control.
SECTION 14. General Provisions.
(a) Nontransferability.
(i) Each Award, and each right under any Award, shall be
exercisable only by the Participant during the Participant's lifetime,
or, if permissible under applicable law, by the Participant's legal
guardian or representative.
(ii) No Award may be sold, assigned, alienated, pledged,
attached or otherwise transferred or encumbered by a Participant
otherwise than by will or by the laws of descent and distribution, and
any such purported sale, assignment, alienation, pledge, attachment,
transfer or encumbrance shall be void and unenforceable against the
Company or any Affiliate; provided that the designation of a
beneficiary shall not constitute a sale, assignment, alienation,
pledge, attachment, transfer or encumbrance.
(iii) Notwithstanding the foregoing, the Committee may in the
applicable Award Agreement evidencing an Option granted under the Plan
or at any time thereafter in an amendment to an Award Agreement provide
that Options granted hereunder which are not intended to qualify as
Incentive Options may be transferred by the Participant to whom such
Option was granted (the "Grantee") without consideration, subject to
such rules as the Committee may adopt to preserve the purposes of the
Plan, to:
(A) the Grantee's spouse, children or grandchildren
(including adopted and stepchildren and grandchildren)
(collectively, the "Immediate Family");
(B) a trust solely for the benefit of the Grantee and
his or her Immediate Family; or
(C) a partnership, corporation or limited liability
company whose only partners, members or shareholders are the
Grantee and his or her Immediate Family;
(each transferee described in clauses (A), (B) and (C) above is
hereinafter referred to as a "Permitted Transferee"); provided that the
Grantee gives the Committee advance written notice describing the terms
and conditions of the proposed transfer and the Committee notifies the
Grantee in writing that such a transfer would comply with the
requirements of the Plan and any applicable Award Agreement evidencing
the Option.
The terms of any Option transferred in accordance with the immediately
preceding sentence shall apply to the Permitted Transferee and any reference in
the Plan or in an Award Agreement to an optionee, Grantee or Participant shall
be deemed to refer to the Permitted Transferee, except that (a) Permitted
Transferees shall not be entitled to transfer any Options, other than by will or
the laws of descent and distribution; (b) Permitted Transferees shall not be
entitled to exercise any transferred Options unless there shall be in effect a
registration statement on an appropriate form covering the Shares to be acquired
pursuant to the exercise of such Option
<PAGE>
if the Committee determines that such a registration statement is necessary or
appropriate, (c) the Committee or the Company shall not be required to provide
any notice to a Permitted Transferee, whether or not such notice is or would
otherwise have been required to be given to the Grantee under the Plan or
otherwise and (d) the consequences of termination of the Grantee's employment
by, or services to, the Company under the terms of the Plan and the applicable
Award Agreement shall continue to be applied with respect to the Grantee,
following which the Options shall be exercisable by the Permitted Transferee
only to the extent, and for the periods, specified in the Plan and the
applicable Award Agreement.
(b) No Rights to Awards. No Participant or other Person shall have any
claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards. The terms and
conditions of Awards and the Committee's determinations and interpretations with
respect thereto need not be the same with respect to each Participant (whether
or not such Participants are similarly situated).
(c) Share Certificates. All certificates for Shares or other securities
of the Company or any Affiliate delivered under the Plan pursuant to any Award
or the exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the SEC, any stock exchange upon which
such Shares or other securities are then listed, and any applicable Federal or
state laws, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
(d) Withholding.
(i) A Participant may be required to pay to the Company or any
Affiliate and the Company or any Affiliate shall have the right and is hereby
authorized to withhold from any Award, from any payment due or transfer made
under any Award or under the Plan or from any compensation or other amount owing
to a Participant the amount (in cash, Shares, other securities, other Awards or
other property) of any applicable withholding taxes in respect of an Award, its
exercise, or any payment or transfer under an Award or under the Plan and to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such taxes. The Committee may provide
for additional cash payments to holders of Awards to defray or offset any tax
arising from the grant, vesting, exercise or payments of any Award.
(ii) Without limiting the generality of clause (i) above, a Participant
may satisfy, in whole or in part, the foregoing withholding liability by
delivery of Shares owned by the Participant (which are not subject to any pledge
or other security interest and which have been owned by the Participant for at
least six months) with a Fair Market Value equal to such withholding liability
or by having the Company withhold from the number of Shares otherwise issuable
pursuant to the exercise of the option a number of Shares with a Fair Market
Value equal to such withholding liability.
(iii) Notwithstanding any provision of this Plan to the contrary, in
connection with the transfer of an Option to a Permitted Transferee pursuant to
Section 14(a) of the Plan, the Grantee shall remain liable for any withholding
taxes required to be withheld upon the exercise of such Option by the Permitted
Transferee.
(e) Award Agreements. Each Award hereunder shall be evidenced by an
Award Agreement which shall be delivered to the Participant and shall specify
the terms and conditions of the Award and any rules applicable thereto,
including but not limited to the effect on such Award of the death, disability
or termination of employment or service of a Participant and the effect, if any,
of such other events as may be determined by the Committee.
(f) No Limit on Other Compensation Arrangements. Nothing contained in
the Plan shall prevent the Company or any Affiliate from adopting or continuing
in effect other compensation arrangements, which may, but need not, provide for
the grant of options, restricted stock, Shares and other types of Awards
provided for hereunder (subject to stockholder approval if such approval is
required), and such arrangements may be either generally applicable or
applicable only in specific cases.
(g) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of, or
in any consulting relationship to, the Company or any Affiliate. Further, the
Company or an Affiliate may at any time dismiss a Participant from employment or
discontinue any consulting relationship, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan, any Award
Agreement or any applicable employment contract or agreement.
<PAGE>
(h) No Rights as Stockholder. Subject to the provisions of the
applicable Award, no Participant or holder or beneficiary of any Award shall
have any rights as a stockholder with respect to any Shares to be distributed
under the Plan until he or she has become the holder of such Shares.
Notwithstanding the foregoing, in connection with each grant of Restricted Stock
hereunder, the applicable Award shall specify if and to what extent the
Participant shall not be entitled to the rights of a stockholder in respect of
such Restricted Stock.
(i) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan and any Award Agreement shall
be determined in accordance with the laws of the State of New York, applied
without giving effect to its conflict of laws principles.
(j) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform the applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award and the remainder of the Plan
and any such Award shall remain in full force and effect.
(k) Other Laws. The Committee may refuse to issue or transfer any
Shares or other consideration under an Award if, acting in its sole discretion,
it determines that the issuance or transfer of such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary. Without limiting the generality of
the foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and
until the Committee in its sole discretion has determined that any such offer,
if made, would be in compliance with all applicable requirements of the U.S.
federal securities laws.
(l) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
(m) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated, or otherwise eliminated.
(n) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
SECTION 15. Term of the Plan.
(a) Effective Date. The Plan shall be effective as of the date of its
approval by the stockholders of the Company.
(b) Expiration Date. No Award shall be granted under the Plan after
December 31, 2009. Unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award granted hereunder may, and the authority
of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Award or to waive any conditions or rights under any such
Award shall, continue after December 31, 2009.
<PAGE>
EXHIBIT 5.1
Sirius Satellite Radio Inc.
1221 Avenue of the Americas
New York, New York 10020
February 18, 2000
Sirius Satellite Radio Inc.
1221 Avenue of the Americas
36th Floor
New York, New York 10020
Dear Sirs:
I am familiar with the CD Radio Inc. 1994 Stock Option Plan, the CD Radio
Inc. Amended and Restated 1994 Directors' Nonqualified Stock Option Plan and the
Sirius Satellite Radio 1999 Long-Term Stock Incentive Plan (the "Plans") under
which an aggregate of 10,500,373 shares of common stock, par value $.001 per
share, of Sirius Satellite Radio Inc., a Delaware corporation (the "Company"),
have been authorized for issuance (the "Shares"). I have acted as counsel to the
Company in connection with the preparation and filing with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act"), of
a Registration Statement on Form S-8 (the "Registration Statement") with respect
to the registration under the Act of the Shares and 10,500,373 Preferred Stock
Purchase Rights (the "Rights"), which are appurtenant to, and trade with, the
Shares. In this connection, I have examined such records, documents and
proceedings, as I have deemed relevant and necessary as a basis for the opinion
expressed herein.
Based upon the foregoing, I am of the opinion that the Shares have been duly
authorized for issuance under the Plans by all proper corporate action and, when
such Shares are issued in accordance with the terms of the Plans and any
conditions or restrictions relating thereto shall have been satisfied, such
Shares will be legally issued, fully paid and non-assessable. The issuance of
the Rights has been duly authorized and when the Rights are issued in accordance
with the terms of the Plans and the Rights Agreement, as amended, between the
Company and Continental Stock Transfer & Trust Company, as Rights Agent, the
Rights will be validly issued.
I hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement.
Very truly yours,
Patrick L. Donnelly
Senior Vice President,
General Counsel and Secretary
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Sirius Satellite Radio Inc., f/k/a CD Radio Inc., of
our report dated February 5, 1999 (which contains an explanatory paragraph
regarding the Company's ability to continue as a going concern) relating to the
consolidated financial statements and our report dated February 5, 1999,
relating to the financial statement schedule, appearing in CD Radio Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1998.
PRICEWATERHOUSECOOPERS LLP
New York, New York
February 7, 2000
