Exhibit 10.1

EMPLOYMENT AGREEMENT

                    EMPLOYMENT AGREEMENT, dated as of July 21, 2011 (this
“Agreement”), between SIRIUS XM RADIO INC., a Delaware corporation (the
“Company”), and DAVID FREAR (the “Executive”).

                    In consideration of the mutual covenants and conditions set
forth herein, the Company and the Executive agree as follows:

                    1. Employment. Subject to the terms and conditions of this
Agreement, the Company hereby employs the Executive, and the Executive hereby
agrees to continue his employment with the Company.

                    2. Duties and Reporting Relationship. (a) The Executive
shall be employed in the capacity of Executive Vice President and Chief
Financial Officer of the Company. In such capacity, the Executive shall be
responsible primarily for supervising the financial affairs, including the
information technology function, of the Company. During the Term (as defined
below), the Executive shall, on a full-time basis and consistent with the needs
of the Company, use his skills and render services to the best of his ability.
The Executive shall perform such activities and duties consistent with his
position as the Chief Executive Officer of the Company shall from time to time
reasonably specify and direct. During the Term, the Executive shall not perform
any consulting services for, or engage in any other business enterprises with,
any third parties without the express written consent of the Chief Executive
Officer of the Company, other than passive investments.

                     (b) The Executive shall generally perform his duties and
conduct his business at the principal offices of the Company in New York, New
York.

                    (c) The Executive shall report to the Chief Executive
Officer of the Company.

                    3. Term. The term of this Agreement shall commence on July
21, 2011 (the “Effective Date”) and end on July 20, 2015, unless terminated
earlier pursuant to the provisions of Section 6 (the “Term”).

                    4. Compensation. (a) During the Term, the Executive shall be
paid an annual base salary of $850,000 and thereafter may be subject to increase
from time to time by recommendation of the Chief Executive Officer of the
Company to, and approval by, the Board of Directors of the Company (the “Board”)
(such amount, as increased, the “Base Salary”). All amounts paid to the
Executive under this Agreement shall be in U.S. dollars. The Base Salary shall
be paid at least monthly and, at the option of the Company, may be paid more
frequently.

                     (b) On the date hereof, the Company shall grant to the
Executive an option to purchase 16,000,000 shares of the Company’s common stock,
par value $.001 per share (the “Common Stock”), at an exercise price of $2.18
per share, the closing price of the Common

--------------------------------------------------------------------------------

2

Stock on the Nasdaq Global Select Market on July 20, 2011. Such options shall be
subject to the terms and conditions set forth in the Option Agreement attached
to this Agreement as Exhibit A.

                     (c) All compensation paid to the Executive hereunder shall
be subject to any payroll and withholding deductions required by applicable law,
including, as and where applicable, federal, New York state and New York City
income tax withholding, federal unemployment tax and social security (FICA).

                    5. Additional Compensation; Expenses and Benefits. (a)
During the Term, the Company shall reimburse the Executive for all reasonable
and necessary business expenses incurred and advanced by him in carrying out his
duties under this Agreement. The Executive shall present to the Company an
itemized account of all expenses in such form as may be required by the Company
from time to time.

                     (b) During the Term, the Executive shall be entitled to
participate fully in any other benefit plans, programs, policies and fringe
benefits which may be made available to the executive officers of the Company
generally, including, without limitation, disability, medical, dental and life
insurance and benefits under the Company’s 401(k) savings plan.

                    (c) During the Term, the Executive shall be entitled to
participate in any bonus plans generally offered to executive officers of the
Company. Bonuses may be subject to the Executive’s individual performance and
satisfaction of objectives established by the Board or the compensation
committee thereof (the “Compensation Committee”). Bonuses may be paid in the
form of cash, stock options, restricted stock, restricted stock units or other
securities of the Company.

                    6. Termination. The date upon which the Executive’s
employment with the Company under this Agreement is deemed to be terminated in
accordance with any of the provisions of this Section 6 is referred to herein as
the “Termination Date.” A termination of employment shall not be deemed to have
occurred for purposes of any provision of this Agreement providing for the
payment of any amounts or benefits upon or following a termination of employment
unless such termination also constitutes a “separation from service” within the
meaning of Section 409A (“Section 409A”) of the Internal Revenue Code of 1986,
as amended (the “Code”), and the regulations thereunder (a “Separation from
Service”), and notwithstanding anything contained herein to the contrary, the
date on which a Separation from Service takes place shall be the Termination
Date.

                     (a) The Company has the right and may elect to terminate
this Agreement for Cause at any time. For purposes of this Agreement, “Cause”
means the occurrence or existence of any of the following:

 

 

 

                    (i) (A) a material breach by the Executive of the terms of
this Agreement, (B) a material breach by the Executive of the Executive’s duty
not to engage in any transaction that represents, directly or indirectly,
self-dealing with the Company or any of its affiliates (which, for purposes
hereof, shall mean any individual, corporation, partnership, association,
limited liability company, trust, estate, or other entity or organization
directly or indirectly controlling, controlled by, or under direct or indirect

--------------------------------------------------------------------------------

3

 

 

 

common control with the Company) which has not been approved by a majority of
the disinterested directors of the Board, or (C) the Executive’s violation of
the Company’s Code of Ethics which is demonstrably and materially injurious to
the Company, if any such material breach or violation described in clauses (A),
(B) or (C), to the extent curable, remains uncured after 15 days have elapsed
following the date on which the Company gives the Executive written notice of
such material breach or violation;

 

 

 

                    (ii) the Executive’s act of dishonesty, misappropriation,
embezzlement, intentional fraud, or similar intentional misconduct by the
Executive involving the Company or any of its affiliates;

 

 

 

                    (iii) the Executive’s conviction or the plea of nolo
contendere or the equivalent in respect of a felony;

 

 

 

                    (iv) any damage of a material nature to any property of the
Company or any of its affiliates caused by the Executive’s willful misconduct or
gross negligence;

 

 

 

                    (v) the repeated nonprescription use of any controlled
substance or the repeated use of alcohol or any other non-controlled substance
that, in the reasonable good faith opinion of the Board, renders the Executive
unfit to serve as an officer of the Company or its affiliates;

 

 

 

                    (vi) the Executive’s failure to comply with the Chief
Executive Officer’s reasonable written instructions on a material matter within
5 days; or

 

 

 

                    (vii) conduct by the Executive that in the reasonable good
faith written determination of the Board demonstrates unfitness to serve as an
officer of the Company or its affiliates, including a finding by the Board or
any judicial or regulatory authority that the Executive committed acts of
unlawful harassment or violated any other state, federal or local law or
ordinance prohibiting discrimination in employment.

Termination of the Executive for Cause pursuant to this Section 6(a) shall be
communicated by a Notice of Termination for Cause. For purposes of this
Agreement, a “Notice of Termination for Cause” shall mean delivery to the
Executive of a copy of a resolution or resolutions duly adopted by the
affirmative vote of not less than a majority of the directors present (in person
or by teleconference) and voting at a meeting of the Board called and held for
that purpose after fifteen days’ notice to the Executive (which notice the
Company shall use reasonable efforts to confirm that Executive has actually
received and which notice for purposes of this Section 6(a) may be delivered, in
addition to the requirements set forth in Section 17, through the use of
electronic mail) and a reasonable opportunity for the Executive, together with
the Executive’s counsel, to be heard before the Board prior to such vote,
finding that in the good faith opinion of the Board, the Executive was guilty of
conduct set forth in any of clauses (i) through (vii) of this Section 6(a) and
specifying the particulars thereof in reasonable detail. For purposes of this
Section 6(a), this Agreement shall terminate on the date specified by the Board
in the Notice of Termination for Cause.

                    (b) This Agreement and the Executive’s employment shall
terminate upon the death of the Executive. If the Executive is unable to perform
the essential duties and functions of

--------------------------------------------------------------------------------

4

his position because of a disability, even with a reasonable accommodation, for
one hundred eighty days within any three hundred sixty-five day period
(“Disability”), the Company shall have the right and may elect to terminate the
services of the Executive by a Notice of Disability Termination. The Executive
shall not be terminated following a Disability except pursuant to this Section
6(b). For purposes of this Agreement, a “Notice of Disability Termination” shall
mean a written notice that sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under this Section 6(b). For purposes of this Agreement, no such
purported termination shall be effective without such Notice of Disability
Termination. This Agreement shall terminate on the day such Notice of Disability
Termination is received by the Executive.

                    (c) The Executive shall have the absolute right to terminate
his employment at any time with or without Good Reason (as defined below).
Should the Executive wish to resign from his position with the Company during
the Term, for other than Good Reason, the Executive shall give at least fourteen
days prior written notice to the Company. This Agreement shall terminate on the
effective date of the resignation set forth in the notice of resignation,
however, the Company may, at its sole discretion, instruct that the Executive
perform no job responsibilities and cease his active employment immediately upon
receipt of the notice from the Executive.

                    (d) The Company shall have the absolute right to terminate
the Executive’s employment without Cause at any time. This Agreement shall
terminate one day following receipt of such notice by the Executive, however,
the Company may, at its sole discretion, instruct that the Executive cease
active employment and perform no more job duties immediately upon provision of
such notice to the Executive.

                    (e) Should the Executive wish to resign from his position
with the Company for Good Reason during the Term, the Executive shall give seven
days prior written notice to the Company. This Agreement shall terminate on the
date specified in such notice, however, the Company may, at its sole discretion,
instruct that the Executive cease active employment and perform no more job
duties immediately upon receipt of such notice from the Executive.

                    For purposes of this Agreement, “Good Reason” shall mean the
continuance of any of the following events (without the Executive’s prior
written consent) for a period of thirty days after delivery to the Company by
the Executive of a notice of the occurrence of such event during which time the
Company shall be afforded the opportunity to cure such event:

 

 

 

                    (i) the assignment to the Executive by the Company of duties
not reasonably consistent with the Executive’s positions, duties,
responsibilities, titles or offices at the commencement of the Term, any
material reduction in the Executive’s duties or responsibilities as described in
Section 2, or any removal of the Executive from, or any failure to re-elect the
Executive to, any of such positions (except in connection with the termination
of the Executive’s employment for Cause, Disability or as a result of the
Executive’s death or by the Executive other than for Good Reason); or

 

 

 

                    (ii) the Executive ceasing to report directly to the Chief
Executive Officer of the Company; or

--------------------------------------------------------------------------------

5

 

 

 

                    (iii) any requirement that the Executive report for work to
a location more than 25 miles from the Company’s current headquarters for more
than 30 days in any calendar year, excluding any requirement that results from
the damage or destruction of the Company’s current headquarters as a result of
natural disasters, terrorism, acts of war or acts of God; or

 

 

 

                    (iv) any reduction in the Base Salary; or

 

 

 

                    (v) the Company’s failure to make a bona fide offer in
writing to renew this Agreement, for an additional one-year term, on the terms
and conditions set forth in this Agreement (including the Base Salary set forth
in Section 4(a), but excluding any equity–based compensation set forth in
Section 4(b)), at least 90 days prior to (x) the fourth anniversary of the
Effective Date and (y) each subsequent anniversary of the Effective Date
following the fourth anniversary of the Effective Date; provided that (for
purposes of this clause (y) only) this Agreement has been renewed on the
previous anniversary of the Effective Date; or

 

 

 

                    (vi) any material breach by the Company of this Agreement.

                    (f) (i) If the employment of the Executive is terminated by
the Company for Cause, by the Executive other than for Good Reason or due to
death or Disability, the Executive shall, in lieu of any future payments or
benefits under this Agreement, be entitled to (A) any earned but unpaid Base
Salary and any business expenses incurred but not reimbursed, in each case,
prior to the Termination Date and (B) any other vested benefits under any other
benefit plans or programs in accordance with the terms of such plans and
programs (collectively, the “Accrued Payments and Benefits”).

                    (ii) If the employment of the Executive is terminated
without Cause or the Executive terminates his employment for Good Reason, then
the Executive shall have an absolute and unconditional right to receive, and the
Company shall pay to the Executive without setoff, counterclaim or other
withholding, except as set forth in Section 4(c), (A) the Accrued Payments and
Benefits, (B) a lump sum amount equal to the sum of (x) the Executive’s
annualized Base Salary then in effect and (y) an amount in cash equal to the
bonus, whether denominated as an annual, performance, incentive, retention or
other bonus, last paid (or due and payable) to the Executive in respect of the
fiscal year immediately preceding the year in which the Termination Date occurs,
and (C) the continuation, at the Company’s expense (by direct payment, not
reimbursement to the Executive) of (1) medical and dental benefits in a manner
that will not be taxable to the Executive and (2) life insurance benefits, on
the same terms as provided by the Company for active employees for one year
following the Termination Date. The lump sum amount contemplated by clause (B)
above shall be paid on the 10th business day after the Release is no longer
cancellable or revocable by the Executive.

                    (g) The Company’s obligations under Section 6(f)(ii) shall
be conditioned upon the Executive executing, delivering, and not revoking during
the seven day revocation period a waiver and release of claims against the
Company, substantially in the form attached as Exhibit B (the “Release”) within
30 days following the Termination Date; provided that the Executive shall have
no obligation to execute such Release in order to receive the payments and

--------------------------------------------------------------------------------

6

benefits under Section 6(f)(ii) in the event that a Release executed by the
Company has not been delivered by the Company to the Executive within five days
following the Termination Date.

                    (h) Notwithstanding any provisions of this Agreement to the
contrary, if the Executive is a “specified employee” (within the meaning of
Section 409A and determined pursuant to policies adopted by the Company) at the
time of his Separation from Service and if any portion of the payments or
benefits to be received by the Executive upon Separation from Service would be
considered deferred compensation under Section 409A (“Nonqualified Deferred
Compensation”), amounts that would otherwise be payable pursuant to this
Agreement during the six-month period immediately following the Executive’s
Separation from Service that constitute Nonqualified Deferred Compensation and
benefits that would otherwise be provided pursuant to this Agreement during the
six-month period immediately following the Executive’s Separation from Service
that constitute Nonqualified Deferred Compensation will instead be paid or made
available on the earlier of (x) the first business day of the seventh month
following the date of the Executive’s Separation from Service and (y) the
Executive’s death.

                    7. Nondisclosure of Confidential Information. (a) The
Executive acknowledges that in the course of his employment he will occupy a
position of trust and confidence. The Executive shall not, except in connection
with the performance of his functions or as required by applicable law, disclose
to others or use, directly or indirectly, any Confidential Information.

                    (b) “Confidential Information” shall mean information about
the Company’s business and operations that is not disclosed by the Company for
financial reporting purposes and that was learned by the Executive in the course
of his employment by the Company, including, without limitation, any business
plans, product plans, strategy, budget information, proprietary knowledge,
patents, trade secrets, data, formulae, sketches, notebooks, blueprints,
information and client and customer lists and all papers and records (including
computer records) of the documents containing such Confidential Information,
other than information that is publicly disclosed by the Company in writing. The
Executive acknowledges that such Confidential Information is specialized, unique
in nature and of great value to the Company, and that such information gives the
Company a competitive advantage. The Executive agrees to deliver or return to
the Company, at the Company’s request at any time or upon termination or
expiration of his employment or as soon as possible thereafter, all documents,
computer tapes and disks, records, lists, data, drawings, prints, notes and
written information (and all copies thereof) furnished by or on behalf of the
Company or prepared by the Executive in the course of his employment by the
Company, provided that the Executive will be able to keep his blackberry,
personal computer, personal rolodex and the like so long as any Confidential
Information is removed from such items.

                    (c) The provisions of this Section 7 shall survive
indefinitely.

                    8. Covenant Not to Compete. During the Restricted Period (as
defined below), the Executive shall not, directly or indirectly, enter into the
employment of, render services to, or acquire any interest whatsoever in
(whether for his own account as an individual proprietor, or as a partner,
associate, stockholder, officer, director, consultant, trustee or otherwise), or
otherwise assist, any person or entity engaged in the distribution or
transmission of

--------------------------------------------------------------------------------

7

radio programming or any activity that directly competes with the business of
the Company (each, a “Competitive Activity”); provided that nothing in this
Agreement shall prevent the purchase or ownership by the Executive by way of
investment of less than five percent of the shares or equity interest of any
corporation or other entity. Without limiting the generality of the foregoing,
the Executive agrees that during the Restricted Period, the Executive shall not
call on or otherwise solicit business or assist others to solicit business from
any of the customers of the Company as to any product or service described above
that competes with any product or service provided or marketed by the Company on
the date of the Executive’s termination of employment with the Company during
the Term (as such Term may be extended in accordance with Section 6(e)(v) of the
Agreement) (the “Milestone Date”). The Executive agrees that during the
Restricted Period he will not solicit or assist others to solicit the employment
of or hire any employee of the Company without the prior written consent of the
Company. For purposes of this Agreement, the “Restricted Period” shall mean the
period of one year following the Milestone Date. For purposes of this Agreement,
the term “radio” shall mean terrestrial radio, satellite radio, HD radio,
internet radio and other audio delivered terrestrially, by satellite, HD or the
internet.

                    9. Change of Control Provisions. If the Executive is, in the
opinion of a nationally recognized accounting firm jointly selected by the
Executive and the Company, required to pay an excise tax on “excess parachute
payments” (as defined in Section 280G(b) of the Code) under Section 4999 of the
Code as a result of an acceleration of the vesting of stock options or
otherwise, the Company shall have an absolute and unconditional obligation to
pay the Executive in accordance with the terms of this Section 9 the amount of
such taxes. In addition, the Company shall have an absolute and unconditional
obligation to pay the Executive such additional amounts as are necessary to
place the Executive in the exact same financial position that he would have been
in if he had not incurred any tax liability under Section 4999 of the Code. The
determination of the exact amount, if any, of any “excess parachute payments”
and any tax liability under Section 4999 of the Code shall be made by a
nationally-recognized independent accounting firm selected by the Executive and
the Company. The fees and expenses of such accounting firm shall be paid by the
Company. The determination of such accounting firm shall be final and binding on
the parties. The Company irrevocably agrees to pay to the Executive, in
immediately available funds to an account designated in writing by the
Executive, any amounts to be paid under this Section 9 within two business days
after receipt by the Company of written notice from the accounting firm which
sets forth such accounting firm’s determination. In addition, in the event that
such payments are not sufficient to pay all excise taxes on “excess parachute
payments” under Section 4999 of the Code as a result of an acceleration of the
vesting of options or for any other reason and to place the Executive in the
exact same financial position that he would have been in if he had not incurred
any tax liability under Section 4999 of the Code, then the Company shall have an
absolute and unconditional obligation to pay the Executive such additional
amounts as may be necessary to pay such excise taxes and place the Executive in
the exact same financial position that he would have been had he not incurred
any tax liability as a result of a change in control under the Code.
Notwithstanding the foregoing, in the event that a written ruling (whether
public or private) of the Internal Revenue Service (“IRS”) is obtained by or on
behalf of the Company or the Executive, which ruling expressly provides that the
Executive is not required to pay, or is entitled to a refund with respect to,
all or any portion of such excise taxes or additional amounts, the Executive
shall promptly reimburse the Company in an amount equal to all amounts paid to

--------------------------------------------------------------------------------

8

the Executive pursuant to this Section 9 less any excise taxes or additional
amounts which remain payable by, or are not refunded to, the Executive after
giving effect to such IRS ruling. Each of the Company and the Executive agrees
to promptly notify the other party if it receives any such IRS ruling. The
payments contemplated by this Section 9 shall in all events be paid no later
than the end of the Executive’s taxable year next following the Executive’s
taxable year in which the excise tax (and any income or other related tax or
interest or penalties thereon) on a payment is remitted to IRS or any other
applicable taxing authority; or, in the case of amounts relating to any claim by
IRS or any other taxing authority that does not result in the remittance of any
federal, state, local and foreign income, excise, social security and other
taxes, the calendar year in which the claim is finally settled or otherwise
resolved. Any amounts required to be repaid to the Company pursuant to this
Section 9 will be repaid to the Company within five business days of the
Executive’s receipt of any refund with respect to any excise tax.

                    10. Remedies. The Executive and Company agree that damages
for breach of any of the covenants under Sections 7 and 8 will be difficult to
determine and inadequate to remedy the harm which may be caused thereby, and
therefore consent that these covenants may be enforced by temporary or permanent
injunction without the necessity of bond. The Executive believes, as of the date
of this Agreement, that the provisions of this Agreement are reasonable and that
the Executive is capable of gainful employment without breaching this Agreement.
However, should any court or arbitrator decline to enforce any provision of
Section 7 or 8 of this Agreement, this Agreement shall, to the extent applicable
in the circumstances before such court or arbitrator, be deemed to be modified
to restrict the Executive’s competition with the Company to the maximum extent
of time, scope and geography which the court or arbitrator shall find
enforceable, and such provisions shall be so enforced.

                    11. Indemnification. The Company shall indemnify the
Executive to the full extent provided in the Company’s Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws and the law of the
State of Delaware in connection with his activities as an officer of the
Company.

                    12. Entire Agreement. The provisions contained herein
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede any and all prior agreements, understandings and
communications between the parties, oral or written, with respect to such
subject matter, including the Employment Agreement between the Executive and the
Company dated June 3, 2003, as amended on August 10, 2005 and February 12, 2008,
but excluding any equity award agreements between the Executive and the Company.
For the avoidance of doubt, nothing herein is intended to supersede or waive
obligations of the Executive to comply with any assignment of invention
provisions applicable to the Executive under the Code of Ethics or any
assignment of invention agreement(s) between the Company and the Executive.

                    13. Modification. Any waiver, alteration, amendment or
modification of any provisions of this Agreement shall not be valid unless in
writing and signed by both the Executive and the Company.

--------------------------------------------------------------------------------

9

                    14. Severability. If any provision of this Agreement shall
be declared to be invalid or unenforceable, in whole or in part, such invalidity
or unenforceability shall not affect the remaining provisions hereof, which
shall remain in full force and effect.

                    15. Assignment. The Executive may not assign any of his
rights or delegate any of his duties hereunder without the prior written consent
of the Company. The Company may not assign any of its rights or delegate any of
its obligations hereunder without the prior written consent of the Executive,
except that any successor to the Company by merger or purchase of all or
substantially all of the Company’s assets shall assume this Agreement.

                    16. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the successors in interest of the Executive and the
Company.

                    17. Notices. All notices and other communications required
or permitted hereunder shall be made in writing and shall be deemed effective
when delivered personally or transmitted by facsimile transmission, one business
day after deposit with a nationally recognized overnight courier (with next day
delivery specified) and five days after mailing by registered or certified mail:

 

 

 

if to the Company:

 

 

 

Sirius XM Radio Inc.

 

1221 Avenue of the Americas

 

36th Floor

 

New York, New York 10020

 

Attention: Chief Executive Officer

 

Telecopier: (212) 584-5353

 

 

 

if to the Executive:

 

 

 

David Frear

 

Address on file at the offices

 

of the Company

or to such other person or address as either party shall furnish in writing to
the other party from time to time.

                    18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within the State of New York.

                    19. Non-Mitigation. The Executive shall not be required to
mitigate damages or seek other employment in order to receive compensation or
benefits under Section 6 of this Agreement; nor shall the amount of any benefit
or payment provided for under Section 6 of this Agreement be reduced by any
compensation earned by the Executive as the result of employment by another
employer.

--------------------------------------------------------------------------------

10

                    20. Arbitration. (a) The Executive and the Company agree
that if a dispute arises concerning or relating to the Executive’s employment
with the Company, or the termination of the Executive’s employment, such dispute
shall be submitted to binding arbitration under the rules of the American
Arbitration Association regarding resolution of employment disputes in effect at
the time such dispute arises. The arbitration shall take place in New York, New
York, before a single experienced arbitrator licensed to practice law in New
York and selected in accordance with the American Arbitration Association rules
and procedures. Except as provided below, the Executive and the Company agree
that this arbitration procedure will be the exclusive means of redress for any
disputes relating to or arising from the Executive’s employment with the Company
or his termination, including disputes over rights provided by federal, state,
or local statutes, regulations, ordinances, and common law, including all laws
that prohibit discrimination based on any protected classification. The parties
expressly waive the right to a jury trial, and agree that the arbitrator’s award
shall be final and binding on both parties, and shall not be appealable. The
arbitrator shall have discretion to award monetary and other damages, and any
other relief that the arbitrator deems appropriate and is allowed by law. The
arbitrator shall have the discretion to award the prevailing party reasonable
costs and attorneys’ fees incurred in bringing or defending an action, and shall
award such costs and fees to the Executive in the event the Executive prevails
on the merits of any action brought hereunder.

                    (b) The Company shall pay the cost of any arbitration
proceedings under this Agreement if the Executive prevails in such arbitration
on at least one substantive issue.

                    (c) The Company and the Executive agree that the sole
dispute that is excepted from Section 20(a) is an action seeking injunctive
relief from a court of competent jurisdiction regarding enforcement and
application of Sections 7, 8 or 10 of this Agreement, which action may be
brought in addition to, or in place of, an arbitration proceeding in accordance
with Section 20(a).

                    21. Compliance with Section 409A. (a) To the extent
applicable, it is intended that the compensation arrangements under this
Agreement be in full compliance with Section 409A (it being understood that
certain compensation arrangements under this Agreement are intended not to be
subject to Section 409A). The Agreement shall be construed, to the maximum
extent permitted, in a manner to give effect to such intention. Notwithstanding
anything in this Agreement to the contrary, distributions upon termination of
the Executive’s employment may only be made upon a Separation from Service.
Neither the Company nor any of its affiliates shall have any obligation to
indemnify or otherwise hold the Executive harmless from any or all such taxes,
interest or penalties, or liability for any damages related thereto. The
Executive acknowledges that he has been advised to obtain independent legal, tax
or other counsel in connection with Section 409A.

                    (b) With respect to any amount of expenses eligible for
reimbursement under this Agreement, such expenses will be reimbursed by the
Company within thirty (30) days following the date on which the Company receives
the applicable invoice from the Executive in accordance with the Company’s
expense reimbursement policies, but in no event later than the last day of the
Executive’s taxable year following the taxable year in which the Executive
incurs the related expenses. In no event will the reimbursements or in-kind
benefits to be provided by

--------------------------------------------------------------------------------

11

the Company in one taxable year affect the amount of reimbursements or in-kind
benefits to be provided in any other taxable year, nor will the Executive’s
right to reimbursement or in-kind benefits be subject to liquidation or exchange
for another benefit.

                    (c) Each payment under this Agreement shall be regarded as a
“separate payment” and not of a series of payments for purposes of Section 409A.

                    22. Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.

                    23. Executive’s Representation. The Executive hereby
represents and warrants to Company that he is not now under any contractual or
other obligation that is inconsistent with or in conflict with this Agreement or
that would prevent, limit, or impair the Executive’s performance of his
obligations under this Agreement.

                    24. Survivorship. Upon the expiration or other termination
of this Agreement or the Executive’s employment with the Company, the respective
rights and obligations of the parties hereto shall survive to the extent
necessary to carry out the intentions of the parties under this Agreement.

--------------------------------------------------------------------------------

12

                    IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.

 

 

 

 

 

SIRIUS XM RADIO INC.

 

 

 

 

 

 

By:

/s/ Dara F. Altman

 

 

 

--------------------------------------------------------------------------------

 

 

 

Dara F. Altman

 

 

 

Executive Vice President and

 

 

 

Chief Administrative Officer

 

 

 

 

/s/ David Frear

 

 

 

--------------------------------------------------------------------------------

 

 

 

David Frear

 

--------------------------------------------------------------------------------

Exhibit A

THIS OPTION MAY NOT BE TRANSFERRED EXCEPT BY WILL OR UNDER THE LAWS
OF DESCENT AND DISTRIBUTION.

SIRIUS XM RADIO 2009 LONG-TERM STOCK INCENTIVE PLAN

STOCK OPTION AGREEMENT

                    This STOCK OPTION AGREEMENT (this “Agreement”), dated July
21, 2011, between SIRIUS XM RADIO INC., a Delaware corporation (the “Company”),
and DAVID FREAR (the “Executive”).

                    1. Grant of Option; Vesting. (a)  Subject to the terms and
conditions of this Agreement, the Sirius XM Radio 2009 Long-Term Stock Incentive
Plan (the “Plan”), and the Employment Agreement, dated as of July 21, 2011,
between the Company and the Executive (the “Employment Agreement”), the Company
hereby grants to the Executive the right and option (this “Option”) to purchase
16,000,000 shares (the “Shares”) of common stock, par value $0.001 per share, of
the Company at a price per share of $2.18 (the “Exercise Price”). This Option is
not intended to qualify as an Incentive Stock Option for purposes of Section 422
of the Internal Revenue Code of 1986, as amended (the “Code”). In the case of
any stock split, stock dividend or like change in the Shares occurring after the
date hereof, the number of Shares and the Exercise Price shall be adjusted as
set forth in Section 4(b) of the Plan.

                     (b) Subject to the terms of this Agreement, this Option
shall vest and become exercisable in four equal installments on each of July 21,
2012, July 21, 2013, July 21, 2014 and July 21, 2015.

                     (c) If the Executive’s employment with the Company
terminates for any reason, this Option, to the extent not then vested, shall
immediately terminate without consideration; provided that if the Executive’s
employment is terminated (x) due to death or Disability (as defined in the
Employment Agreement), (y) by the Company without Cause (as defined in the
Employment Agreement), or (z) by the Executive for Good Reason (as defined in
the Employment Agreement), the unvested portion of this Option, to the extent
not previously cancelled or forfeited, shall immediately become vested and
exercisable.

                    2. Term. This Option shall terminate on July 21, 2021 (the
“Option Expiration Date”); provided that if:

 

 

 

          (a) the Executive’s employment with the Company is terminated due to
the Executive’s death or Disability, by the Company without Cause or by the
Executive for Good Reason, the Executive may exercise this Option in full until
the first anniversary of such termination (at which time the Option shall be
cancelled), but not later than the Option Expiration Date;

--------------------------------------------------------------------------------

 

 

 

          (b) the Executive’s employment with the Company is terminated for
Cause, the Option shall be cancelled upon the date of such termination; and

 

 

 

          (c) the Executive voluntarily terminates his employment with the
Company without Good Reason, the Executive may exercise the vested portion of
this Option until ninety days following the date of such termination (at which
time the Option shall be cancelled), but not later than the Option Expiration
Date.

                    3. Exercise. Subject to Sections 1 and 2 of this Agreement
and the terms of the Plan, this Option may be exercised, in whole or in part, in
accordance with Section 6 of the Plan.

                    4. Non-transferable. This Option may not be transferred,
assigned, pledged or hypothecated in any manner (whether by operation of law or
otherwise) other than by will or by the applicable laws of descent and
distribution, and shall not be subject to execution, attachment or similar
process. Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of the Option or of any right or privilege conferred hereby shall be
null and void.

                    5. Withholding. Prior to delivery of the Shares purchased
upon exercise of this Option, the Company shall determine the amount of any
United States federal, state and local income tax, if any, which is required to
be withheld under applicable law and shall, as a condition of exercise of this
Option and delivery of certificates representing the Shares purchased upon
exercise of this Option, collect from the Executive the amount of any such tax
to the extent not previously withheld. The Executive may satisfy his withholding
obligations in the manner contemplated by Section 14(d) of the Plan.

                    6. Rights of the Executive. Neither this Option, the
execution of this Agreement nor the exercise of any portion of this Option shall
confer upon the Executive any right to, or guarantee of, continued employment by
the Company, or in any way limit the right of the Company to terminate
employment of the Executive at any time, subject to the terms of the Employment
Agreement or any other written employment or similar agreement between the
Company and the Executive.

                    7. Professional Advice. The acceptance and exercise of this
Option may have consequences under federal and state tax and securities laws
that may vary depending upon the individual circumstances of the Executive.
Accordingly, the Executive acknowledges that the Executive has been advised to
consult his personal legal and tax advisor in connection with this Agreement and
this Option.

                    8. Agreement Subject to the Plan. The Option and this
Agreement are subject to the terms and conditions set forth in the Plan, which
terms and conditions are incorporated herein by reference. Capitalized terms
used herein but not defined shall have the meaning set forth in the Plan. A copy
of the Plan previously has been delivered to the Executive. This Agreement, the
Employment Agreement and the Plan constitute the entire understanding between
the Company and the Executive with respect to this Option.

                    9. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to its conflict of laws

--------------------------------------------------------------------------------

principles, and shall bind and inure to the benefit of the heirs, executors,
personal representatives, successors and assigns of the parties hereto.

                    10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given when delivered personally or when
telecopied (with confirmation of transmission received by the sender), three
business days after being sent by certified mail, postage prepaid, return
receipt requested or one business day after being delivered to a nationally
recognized overnight courier with next day delivery specified to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice): Company: Sirius XM Radio Inc., 1221 Avenue of the
Americas, 36th Floor, New York, New York 10020, Attention: Chief Executive
Officer; and Executive: Address on file at the office of the Company. Notices
sent by email or other electronic means not specifically authorized by this
Agreement shall not be effective for any purpose of this Agreement.

                    11. Binding Effect. This Agreement has been duly executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.

                    12. Amendment. The rights of the Executive hereunder may not
be impaired by any amendment, alteration, suspension, discontinuance or
termination of the Plan or this Agreement without the Executive’s consent.

--------------------------------------------------------------------------------

                    IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.

 

 

 

 

 

SIRIUS XM RADIO INC.

 

 

 

 

By:

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

     Dara F. Altman

 

 

     Executive Vice President and

 

 

     Chief Administrative Officer

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

     David Frear

--------------------------------------------------------------------------------

Exhibit B

AGREEMENT AND RELEASE

                    This Agreement and Release, dated as of _________, 20__
(this “Agreement”), is entered into by and between DAVID FREAR (the “Executive”)
and SIRIUS XM RADIO INC., and its subsidiaries and affiliated companies
(collectively, the “Company”).

                    The purpose of this Agreement is to completely and finally
settle, resolve, and forever extinguish all obligations, disputes and
differences arising out of the Executive’s employment with and separation from
Company.

                    NOW, THEREFORE, in consideration of the mutual promises and
covenants contained in this Agreement, the Executive and the Company hereby
agree as follows:

                    1. The Executive’s employment with the Company is terminated
as of _____________, 20__ (the “Termination Date”).

                    2. The Company and the Executive agree that the Executive
shall be provided severance pay, less all legally required and authorized
deductions in accordance with the terms of Section 6(f) of the Employment
Agreement, dated as of July 21, 2011 (the “Employment Agreement”), between the
Executive and the Company; provided that no such severance shall be paid if the
Executive revokes this Agreement pursuant to Section 4 below. The Executive
acknowledges and agrees that he is entering into this Agreement in consideration
of such severance and the Company’s agreements set forth herein. All vacation
pay earned and unused as of the Termination Date will be paid to Executive as
required by law. Except as set forth above, the Executive will not be eligible
for any other compensation or benefits following the Termination Date other than
any vested, accrued benefits under the Company’s compensation and benefit plans,
and other than the rights, if any, granted to the Executive under the terms of
any stock option, restricted stock, or other equity award agreements or plans.

                    3. The Executive, for himself, and for his heirs, attorneys,
agents, spouse and assigns, hereby waives, releases and forever discharges the
Company and its predecessors, successors, and assigns, if any, as well as its
and their officers, directors and employees, stockholders, agents, servants,
representatives, and attorneys, and the predecessors, successors, heirs and
assigns of each of them (collectively “Released Parties”), from any and all
grievances, claims, demands, causes of action, obligations, damages and/or
liabilities of any nature whatsoever, whether known or unknown, suspected or
claimed, which the Executive ever had, now has, or claims to have against the
Released Parties, by reason of any act or omission occurring before the date
hereof, including, without limiting the generality of the foregoing, (a) any
act, cause, matter or thing stated, claimed or alleged, or which was or which
could have been alleged in any manner against the Released Parties prior to the
execution of this Agreement and (b) all claims for any payment under the
Employment Agreement; provided that nothing contained in this Agreement shall
affect the Executive’s rights (i) to indemnification from the Company as
provided in the Employment Agreement or otherwise; (ii) to coverage under the
Company’s insurance policies covering officers and directors; (iii) to other
benefits which by their express terms extend beyond the Executive’s separation
from employment (including

--------------------------------------------------------------------------------

Executive’s rights under Section 6(f) of the Employment Agreement); and (iv)
under this Agreement, and (c) all claims for discrimination, harassment and/or
retaliation, under Title VII of the Civil Rights Act of 1964, as amended, the
Civil Rights Act of 1991, as amended, the New York State Human Rights Law, as
amended, as well as any and all claims arising out of any alleged contract of
employment, whether written, oral, express or implied, or any other federal,
state or local civil or human rights or labor law, ordinances, rules,
regulations, guidelines, statutes, common law, contract or tort law, arising out
of or relating to the Executive’s employment with and/or separation from the
Company, including the termination of his employment on the Termination Date,
and/or any events occurring prior to the execution of this Agreement.

                    4. The Executive specifically waives all rights or claims
that he has or may have under the Age Discrimination In Employment Act of 1967,
29 U.S.C. §§ 621-634, as amended (“ADEA”), including, without limitation, those
arising out of or relating to the Executive’s employment with and/or separation
from the Company, the termination of his employment on the Termination Date,
and/or any events occurring prior to the execution of this Agreement. In
accordance with the ADEA, the Company specifically hereby advises the Executive
that: (1) he may and should consult an attorney before signing this Agreement,
(2) he has twenty-one (21) days to consider this Agreement, and (3) he has seven
(7) days after signing this Agreement to revoke this Agreement.

                    5. Notwithstanding the above, nothing in this Agreement
prevents or precludes Executive from (a) challenging or seeking a determination
of the validity of this Agreement under the ADEA; or (b) filing an
administrative charge of discrimination under any applicable statute or
participating in any investigation or proceeding conducted by a governmental
agency.

                    6. Executive acknowledges that he has read and understands
the foregoing release and executes it voluntarily and without coercion.

                    7. The Company, for itself, and for its predecessors,
successors, and assigns, if any, as well as its and their officers, directors
and employees, stockholders, agents, servants, representatives, and attorneys,
and the predecessors, successors, heirs and assigns of each of them, hereby
waives, releases and forever discharges the Executive and his heirs, attorneys,
agents, spouse and assigns (collectively, “Executive Released Parties”) from any
and all grievances, claims, demands, causes of action, obligations, damages
and/or liabilities of any nature whatsoever, which the Company ever had, now
has, or claims to have against the Executive Released Parties by reason of any
act or omission occurring before the date hereof including, without limiting the
generality of the foregoing, any act, cause, matter or thing stated, claimed or
alleged of which the Company has actual knowledge which was or could have been
alleged in any manner against the Executive Released Parties prior to the
execution of this Agreement.

                    8. This release does not affect or impair the Executive’s
rights with respect to workman’s compensation or similar claims under applicable
law or any claims under medical, dental, disability, life or other insurance
arising prior to the date hereof.

--------------------------------------------------------------------------------

                    9. The Executive warrants that he has not made any
assignment, transfer, conveyance or alienation of any potential claim, cause of
action, or any right of any kind whatsoever, including but not limited to,
potential claims and remedies for discrimination, harassment, retaliation, or
wrongful termination, and that no other person or entity of any kind has had, or
now has, any financial or other interest in any of the demands, obligations,
causes of action, debts, liabilities, rights, contracts, damages, costs,
expenses, losses or claims which could have been asserted by the Executive
against the Company.

                    10. The Executive shall not make any disparaging remarks
about the Company, or its officers, agents, employees, practices or products;
provided that the Executive may provide truthful and accurate facts and opinions
about the Company where required to do so by law. The Company shall not, and
shall instruct its officers not to, make any disparaging remarks about the
Executive; provided that the Company and its officers may provide truthful and
accurate facts and opinions about the Executive where required to do so by law.

                    11. The parties expressly agree that this Agreement shall
not be construed as an admission by any of the parties of any violation,
liability or wrongdoing, and shall not be admissible in any proceeding as
evidence of or an admission by any party of any violation or wrongdoing. The
Company expressly denies any violation of any federal, state, or local statute,
ordinance, rule, regulation, order, common law or other law in connection with
the employment and termination of employment of the Executive.

                    12. In the event of a dispute concerning the enforcement of
this Agreement, the finder of fact shall have the discretion to award the
prevailing party reasonable costs and attorneys’ fees incurred in bringing or
defending an action, and shall award such costs and fees to the Executive in the
event the Executive prevails on the merits of any action brought hereunder. All
other requests for relief or damages awards shall be governed by Sections 20(a)
and 20(b) of the Employment Agreement.

                    13. The parties declare and represent that no promise,
inducement, or agreement not expressed herein has been made to them.

                    14. This Agreement in all respects shall be interpreted,
enforced and governed under the laws of the State of New York and any applicable
federal laws relating to the subject matter of this Agreement. The language of
all parts of this Agreement shall in all cases be construed as a whole,
according to its fair meaning, and not strictly for or against any of the
parties. This Agreement shall be construed as if jointly prepared by the
Executive and the Company. Any uncertainty or ambiguity shall not be interpreted
against any one party.

                    15. This Agreement, the Employment Agreement, [and list any
outstanding award agreements] between the Executive and the Company contain the
entire agreement of the parties as to the subject matter hereof. No modification
or waiver of any of the provisions of this Agreement shall be valid and
enforceable unless such modification or waiver is in writing and signed by the
party to be charged, and unless otherwise stated therein, no such modification
or waiver shall constitute a modification or waiver of any other provision of
this Agreement (whether or not similar) or constitute a continuing waiver.

--------------------------------------------------------------------------------

                    16. The Executive and the Company represent that they have
been afforded a reasonable period of time within which to consider the terms of
this Agreement, that they have read this Agreement, and they are fully aware of
its legal effects. The Executive and the Company further represent and warrant
that they enter into this Agreement knowingly and voluntarily, without any
mistake, duress or undue influence, and that they have been provided the
opportunity to review this Agreement with counsel of their own choosing. In
making this Agreement, each party relies upon his or its own judgment, belief
and knowledge, and has not been influenced in any way by any representations or
statements not set forth herein regarding the contents hereof by the entities
who are hereby released, or by anyone representing them.

                    17. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other parties. The parties further agree that delivery of an
executed counterpart by facsimile shall be as effective as delivery of an
originally executed counterpart. This Agreement shall be of no force or effect
until executed by all the signatories.

                    18. The Executive warrants that he will return to the
Company all software, computers, computer-related equipment, keys and all
materials (including copies) obtained or created by the Executive in the course
of his employment with the Company on or before the Termination Date; provided
that the Executive will be able to keep his blackberry, personal computer,
personal rolodex and the like so long as any confidential information is removed
from such items.

                    19. Any existing obligations the Executive has with respect
to confidentiality, nonsolicitation of Company clients, nonsolicitation of
Company employees and noncompetition with the Company shall remain in full force
and effect, including, but not limited to, Sections 7 and 8 of the Employment
Agreement.

                    20. Any disputes arising from or relating to this Agreement
shall be subject to the arbitration provision pursuant to Section 20 of the
Employment Agreement.

                    21. Should any provision of this Agreement be declared or be
determined by a forum with competent jurisdiction to be illegal or invalid, the
validity of the remaining parts, terms or provisions shall not be affected
thereby and said illegal or invalid part, term, or provision shall be deemed not
to be a part of this Agreement.

--------------------------------------------------------------------------------

                    IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.

 

 

 

 

 

 

 

 

SIRIUS XM RADIO INC.

 

 

 

 

 

 

 

 

 

 

Dated:

 

 

By:

 

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

Dated:

 

 

 

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

 

David Frear

--------------------------------------------------------------------------------