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

 










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 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 





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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

 









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                     (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 





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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.





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                    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