Exhibit 10.3

AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this “Amendment”) by and among XM
Satellite Radio Holdings Inc., XM Satellite Radio Inc. (collectively with XM
Satellite Radio Holdings Inc., “XM”), and Nathaniel Davis (the “Employee”), is
made as of April 4, 2007.

WHEREAS, XM and the Employee are parties to that certain Employment Agreement
dated as of July 20, 2006 (the “Agreement”);

WHEREAS, XM and the Employee wish to amend and clarify the Agreement as set
forth below;

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:

 

  1. The final sentence of Article 3.7(f) of the Agreement is hereby deleted and
replaced with the following:

The foregoing restrictions shall lapse upon the EMPLOYEE’S termination of
employment as a result of death or Disability, or as a result of an involuntary
termination, or termination without Cause or for Good Reason within one year
following a Change of Control.

 

  2. Article 4.5(d) of the Agreement is hereby deleted and replaced in its
entirety to read as follows:

(d) In the event EMPLOYEE’S employment is terminated by XM without Cause or by
EMPLOYEE by resignation for Good Reason:

(i) XM shall pay to EMPLOYEE a lump sum severance payment, in cash, equal to two
times the sum of (i) EMPLOYEE’S annual base salary as in effect immediately
prior to the date of termination and (ii) EMPLOYEE’S target annual bonus for the
year of termination (or, in the event that EMPLOYEE is terminated following a
Change of Control, if higher, EMPLOYEE’s target annual bonus for the year in
which the Change of Control occurs).

(ii) For the two year period immediately following the date of termination, XM
shall arrange to continue to provide EMPLOYEE (and his dependents, where
applicable) all applicable benefits available to EMPLOYEE, at no greater
after-tax cost to the Executive than the after-tax cost to EMPLOYEE immediately
prior to such date or occurrence. With respect to the health, medical, dental,
or similar benefits which EMPLOYEE (and/or his dependents) were receiving, XM
may pay EMPLOYEE an amount equal to his cost for obtaining equivalent coverage,
as an alternative to continuing such benefits.

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(iii) XM shall pay EMPLOYEE a pro-rated annual bonus (based on EMPLOYEE’S target
annual bonus for the year of termination, or, in the event that EMPLOYEE is
terminated following a Change of Control, if higher, based on EMPLOYEE’s target
annual bonus for the year in which the Change of Control occurs), for the
portion of the calendar year EMPLOYEE was employed by XM prior to the
termination.

 

  3. This Amendment shall be governed by, interpreted under and construed in
accordance with the laws of the State of New York.

 

  4. This Amendment may be executed in counterparts, each of which shall be an
original and all of which shall constitute the same document.

 

  5. Except as modified by this Amendment, the Agreement is hereby confirmed in
all respects.

IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as of
the date and the year first written above.

 

XM SATELLITE RADIO HOLDINGS INC.

/s/

By:   Title:   XM SATELLITE RADIO INC.

/s/

By:   Title:   EMPLOYEE

/s/ Nathaniel Davis

Nathaniel Davis