UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended: December 31, 1999
-----------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
Commission file number: 0-24710
A. Full title of the plan and the address of the Plan, if different from that of
the issuer named below:
Sirius Satellite Radio 401(k) Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
Sirius Satellite Radio Inc.
1221 Avenue of the Americas
36th Floor
New York, NY 10020
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
SIRIUS SATELLITE RADIO 401(k) SAVINGS PLAN
INDEX
Page
----
Part I - Financial Statements
Report of Independent Public Accountants 1
Statements of Net Assets Available for Benefits as of December 31, 1999
and 1998 2
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1999 3
Notes to Financial Statements 4
Part II - Supplemental Schedules
Schedule of Assets Held for Investment Purposes as of
December 31, 1999 9
Schedule of Reportable Transactions for the Year Ended
December 31, 1999 10
Signatures 11
Exhibit 23.1 - Consent of Independent Public Accounts 12
SIRIUS SATELLITE RADIO 401(k) SAVINGS PLAN
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the Sirius Satellite Radio 401(k)
Savings Plan (formerly the CD Radio 401(k) Savings Plan):
We have audited the accompanying statements of net assets available for benefits
of the Sirius Satellite Radio 401(k) Savings Plan (formerly the CD Radio 401(k)
Savings Plan), as of December 31, 1999 and 1998, and the related statement of
changes in net assets available for benefits for the year ended December 31,
1999. These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the principles used and the significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules of assets held for
investment purposes and reportable transactions are presented for purposes of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
New York, New York
June 22, 2000
1
SIRIUS SATELLITE RADIO 401(k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
1999 1998
---- ----
Investments, at market value (See Notes 6 & 7) $2,124,061 $326,884
Employer Contribution Receivable 14,210 9,227
Employee Contribution Receivable 17,492 12,526
---------- --------
Net Assets Available for Benefits $2,155,763 $348,637
========== ========
The accompanying notes are an integral part of these statements.
2
SIRIUS SATELLITE RADIO 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
ADDITIONS:
Investment income:
Net appreciation in fair value of investments (See Notes 6 & 7) $ 550,364
Interest & dividends 26,855
Contributions:
Employer 453,137
Employee 801,989
----------
Total additions $1,832,345
DEDUCTIONS:
Distributions (25,219)
----------
Net increase in assets available for benefits 1,807,126
Net assets available for benefits:
Beginning of year 348,637
==========
End of year $2,155,763
==========
The accompanying notes are an integral part of this statement.
3
SIRIUS SATELLITE RADIO 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - DESCRIPTION OF THE PLAN
- --------------------------------
Sirius Satellite Radio Inc. ("Sirius Radio") sponsors the Sirius Satellite Radio
401(k) Savings Plan (the "Plan"). The inception date of the Plan was September
1, 1998 and the Plan has a fiscal year end of December 31.
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions. Information with regard to eligibility, contributions,
distributions, vesting, trustees, withdrawals, loans, fund redistribution and
definitions of all terms are contained in that document.
General
- -------
The Plan is a defined contribution plan covering all non-union employees of
Sirius Radio who have attained 21 years of age. Participation in the Plan begins
on the first day of the first month following an employee's date of hire. The
Plan is subject to the provisions of the Employment Retirement Income Securities
Act ("ERISA").
On November 11, 1999, the Plan sponsor changed its corporate name from CD Radio
Inc. to Sirius Satellite Radio Inc. and amended the Plan to change the name of
the Plan from the CD Radio 401(k) Savings Plan to the Sirius Satellite Radio
401(k) Savings Plan.
Contributions
- -------------
Participants may elect to contribute up to 12% of compensation, as defined,
provided their contributions do not exceed maximum allowable amounts under the
Internal Revenue Code (the "Code"). Under the Code, individual contributions for
which taxes may be deferred were limited to $10,000 in 1999 and 1998.
Participants may also contribute amounts representing distributions from other
qualified defined benefit or defined contribution plans. Participants direct the
investment into various investment options offered by the Plan. The nine
investment options currently offered by the Plan consist of seven mutual funds,
a long-term bond fund and Sirius Radio common stock.
The Plan provides for employer matching contributions based on employee
contribution levels. Sirius Radio made an employer matching contribution on a
dollar for dollar basis for the first $10,000 deferred by each employee during
the years ended December 31, 1999 and 1998. This employer matching contribution
is in the form of common stock of Sirius Radio. Each plan year, Sirius Radio
will review and determine the employer matching contributions for the subsequent
plan year. Employees are eligible to receive the employer matching contribution
during a year in which the employee has performed at least one hour of service,
regardless of employment status on the last day of the plan year.
4
Sirius Radio may also elect to contribute to the profit sharing portion of the
Plan based upon the total compensation of all participants eligible to receive
an allocation. These additional contributions, referred to as regular employer
contributions, will be limited to profits as determined by the 401(k) Committee
and will be determined for each Plan year by Sirius Radio. Employees are only
eligible to share in regular employer contributions during any Plan year in
which they are employed on the last day of the Plan year.
Administrative Expenses
- -----------------------
Administrative expenses may be paid by the Plan, by Sirius Radio or through the
use of Plan forfeitures. For the Plan years ended December 31, 1999 and 1998 all
administrative expenses were paid by Sirius Radio and through the use of Plan
forfeitures.
Participant Accounts
- --------------------
Each participant's account is credited with participant contributions, employer
matching, regular employer contributions and allocations of Plan earnings.
Allocations of investment income are based on participant earnings or account
balances, as defined. A participant is entitled to the benefit that can be
provided from the participant's vested account balance.
Vesting
- -------
Participants are immediately vested in their contributions plus earnings
thereon. Vesting in company matching and regular contributions begins one year
after employment at a rate of 33 1/3% per year until the completion of the third
year of employment when 100% is vested. In addition, a participant becomes fully
vested in his or her company matching and regular contributions upon his or her
retirement, disability, death, upon reaching age 65 or if there is a change in
control of the Sirius Radio.
Distributions of Benefits
- -------------------------
Upon termination of employment due to death, disability, retirement or upon
attaining age 59 1/2, a participant may receive a lump sum amount equal to the
value of the participant's vested interest in his or her account. In addition,
participants may elect to withdraw funds from their respective accounts in an
event of hardship, as defined.
Participant Loans
- -----------------
Participants have the ability to borrow against their vested account balance, up
to the lesser of $50,000 or 50% of their vested balance, with a minimum
borrowing of $1,000. Loans must generally be repaid within five years in equal
installments via payroll deductions, with the exception of loans taken to
purchase a principal residence, which may be repaid over a reasonable period of
time in excess of five years, as determined by the Plan Administrator. Loans are
secured by the balance in the participant's account and bear interest at a
comparable rate charged by a bank or other financial institution at the time of
the loan.
5
Forfeitures
- -----------
Forfeitures of non-vested contributions for the years ended December 31, 1999
and 1998 were $11,845 and $3,299, respectively.
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES
- ---------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are prepared under the accrual method of
accounting.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Plan Administrator to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of income and expenses
during the reporting period. Actual results may differ from those estimates.
Investment Valuation and Income Recognition
- -------------------------------------------
The Plan's investments are stated at fair value. Stocks and fund shares are
valued at their quoted market price.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Payment of Benefits
- -------------------
Benefit payments are recorded when paid.
NOTE 3 -TAX STATUS
- ------------------
The Plan has received a favorable letter of determination dated September 1,
1999 stating that the Plan is designed in accordance with applicable sections of
the Code, subject to the adoption of certain proposed amendments to the Plan.
The Plan has adopted the proposed amendments and the Plan Administrator believes
that the Plan is designed and currently being operated in compliance with the
applicable requirements of the Code.
NOTE 4 - PLAN TERMINATION
- -------------------------
Although it has not expressed any intent to do so, Sirius Radio reserves the
right to terminate the Plan, in whole or in part, at any time. In the event that
such termination occurs, all amounts credited to participant accounts will
become 100% vested. The trustee in accordance with the Plan document will
distribute the net assets of the Plan in a uniform and nondiscretionary manner.
6
NOTE 5 - PARTY-IN-INTEREST TRANSACTIONS
- ---------------------------------------
Sirius Radio and Merrill Lynch Trust Company, plan trustee, are
parties-in-interest with respect to the Plan under the provisions of ERISA. The
records of the Plan indicate no party-in-interest transactions which are
prohibited by ERISA Section 406 and for which no statutory or administrative
exemption exists.
NOTE 6 - INVESTMENTS
- --------------------
The fair value of investments that individually represent 5% or more of the
Plan's net assets are as follows:
DECEMBER 31, DECEMBER 31,
1999 1998
------------ -----------
Sirius Radio Common Stock - Non-participant Directed $898,361 $138,467
Sirius Radio Common Stock - Participant Directed 450,634 108,925
Merrill Lynch S&P 500 Index 220,189 34,678
Davis New York Venture Fund 143,066 19,474
MFS Emerging Growth Fund 111,709 n/a
During 1999, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$550,364 as follows:
Sirius Radio Common Stock $476,127
Mutual funds 77,419
Bond fund (3,182)
--------
Total appreciation $550,364
========
NOTE 7 - NON-PARTICIPANT DIRECTED INVESTMENTS
- ---------------------------------------------
Non-participant directed funds are invested solely in Sirius Radio common stock.
Non-participant directed investments totaled $898,361 and $138,467 as of
December 31, 1999 and 1998, respectively. The significant components of the
changes in net assets relating to non-participant directed investments is
as follows:
Contributions $453,137
Appreciation 312,680
Benefits paid to participants (5,923)
--------
Change in non-participant directed funds $759,894
========
7
NOTE 8 - RECONCILIATION TO FORM 5500
- ------------------------------------
As of December 31, 1999, there are no reconciling items between the Form 5500
and the enclosed Statement of Net Assets Available for Benefits. The following
is a reconciliation between the Form 5500 and the enclosed Statement of Changes
in Net Assets Available for Benefits:
DECEMBER 31, 1999
-----------------
Net Income per Form 5500 $1,809,010
Benefits requested as of December 31, 1998 and
paid during 1999 (1,884)
----------
Net Income per enclosed Statement of Changes in
Net Assets Available for Benefits $1,807,126
==========
8
SCHEDULE I
SIRIUS SATELLITE RADIO 401(k) SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES
DECEMBER 31, 1999
EIN 52-1700207
(c) DESCRIPTION OF
INVESTMENT, INCLUDING
MATURITY DATE, RATE OF
(b) IDENTITY OF ISSUER, BORROWER, INTEREST, COLLATERAL,
(a) LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE (d) COST (e) CURRENT VALUE
- --------------------------------------------------------------------------------------------------------------
*Sirius Satellite Radio Inc. Common Stock, 30,212 $ 819,766** $1,348,995**
shares in participation
*Merrill Lynch Trust Company S&P 500 Index Fund, n/a 220,189
12,164 shares in
participation
Davis Selected Advisors New York Venture n/a 143,066
Fund, 5,056 shares in
participation
*Merrill Lynch Trust Company Preservation Trust Fund, n/a 42,377
42,377 shares in
participation
MFS Investment Management Emerging Growth Fund, n/a 111,709
1,717 shares in
participation
*Merrill Lynch Trust Company Global Allocation Fund, n/a 46,603
3,331 shares in
participation
*Merrill Lynch Trust Company Basic Value Fund, n/a 68,812
1,804 shares in
participation
IVY Management, Inc. Bond Fund, 5,960
shares in participation n/a 49,361
AIM Management Group Inc. Constellation Fund,
2,325 shares in
participation n/a 92,949
----------
Total Investments $2,124,061
==========
*Represents a party-in-interest
** Balances consist of participant and non-participant directed investments
The accompanying notes are an integral part of this schedule.
9
SCHEDULE II
SIRIUS SATELLITE RADIO 401(k) SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS (A)
FOR THE YEAR ENDED DECEMBER 31, 1999
(h) CURRENT VALUE
(a) IDENTITY OF (b) DESCRIPTION NUMBER OF (c) PURCHASE (d) SELLING (g) COST OF ASSET ON (i) NET GAIN
PARTY INVOLVED OF ASSET TRANSACTIONS PRICE PRICE OF ASSET TRANSACTION DATE OR (LOSS)
- ----------------------------------------------------------------------------------------------------------------------------
*Sirius Satellite
Radio Inc. -
Non-participant
Directed Common Stock 24 $448,703 n/a $448,703 $ 448,703 n/a
Common Stock 2 n/a $1,909 1,477 1,909 $ 432
(A) Reportable transactions are those purchases and sales of the same non-
participant directed security which, individually or in the aggregate,
exceed 5% of the Plan's assets as of the beginning of the plan year.
*Represents a party-in-interest
The accompanying notes are an integral part of this schedule.
10
SIGNATURES
The Plan. Pursuant to the requirements of the Securities and Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
SIRIUS SATELLITE RADIO 401(k) SAVINGS PLAN
By: /s/ Edward Weber, Jr.
--------------------------
Edward Weber, Jr.
Vice President and Controller
(Principal Accounting Officer)
June 28, 2000
11