Quarterly report pursuant to Section 13 or 15(d)

Benefit Plans

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Benefit Plans
 9 Months Ended
Sep. 30, 2012
Compensation and Retirement Disclosure [Abstract]  
Benefit Plans
Benefit Plans

We recognized share-based payment expense of $17,492 and $13,983 for the three months ended September 30, 2012 and 2011, respectively, and $46,361 and $36,006 for the nine months ended September 30, 2012 and 2011, respectively.

2009 Long-Term Stock Incentive Plan

In May 2009, our stockholders approved the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan (the “2009 Plan”). Employees, consultants and members of our board of directors are eligible to receive awards under the 2009 Plan. The 2009 Plan provides for the grant of stock options, restricted stock, restricted stock units and other stock-based awards that the compensation committee of our board of directors may deem appropriate. Vesting and other terms of stock-based awards are set forth in the agreements with the individuals receiving the awards. Stock-based awards granted under the 2009 Plan are generally subject to a vesting requirement. Stock-based awards generally expire ten years from the date of grant. Each restricted stock unit entitles the holder to receive one share of common stock upon vesting. As of September 30, 2012, approximately 142,977,000 shares of common stock were available for future grants under the 2009 Plan.

Other Plans

We maintain four other share-based benefit plans — the XM 2007 Stock Incentive Plan, the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan, the XM 1998 Shares Award Plan and the XM Talent Option Plan. No further awards may be made under these plans. Outstanding awards under these plans continue to vest.

The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees and members of our board of directors:
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Risk-free interest rate
0.8%
 
1.1%
 
0.8%
 
1.1%
Expected life of options — years
5.06
 
5.27
 
5.13
 
5.27
Expected stock price volatility
49%
 
68%
 
53%
 
68%
Expected dividend yield
0%
 
0%
 
0%
 
0%


There were no options granted to third parties during the three and nine months ended September 30, 2012 and 2011.

The following table summarizes stock option activity under our share-based payment plans for the nine months ended September 30, 2012 (options in thousands):
 
Options
 
Weighted-
Average
Exercise
Price
 
Weighted-Average
Remaining
Contractual Term
(Years)
 
Aggregate
Intrinsic
Value
Outstanding as of December 31, 2011
439,580

 
$
1.25

 
 
 
 
Granted
57,776

 
$
2.52

 
 
 
 
Exercised
(144,310
)
 
$
0.62

 
 
 
 
Forfeited, cancelled or expired
(8,217
)
 
$
3.26

 
 
 
 
Outstanding as of September 30, 2012
344,829

 
$
1.68

 
6.82
 
$
384,883

Exercisable, September 30, 2012
125,959

 
$
2.08

 
5.33
 
$
134,226



The weighted average grant date fair value of options granted during the nine months ended September 30, 2012 and 2011 was $1.08 and $1.04, respectively. The total intrinsic value of stock options exercised during the nine months ended September 30, 2012 and 2011 was $237,521 and $10,011, respectively.

We recognized share-based payment expense associated with stock options of $16,660 and $13,201 for the three months ended September 30, 2012 and 2011, respectively, and $43,350 and $33,098 for the nine months ended September 30, 2012 and 2011, respectively.

There were no grants, exercises, forfeitures, cancellations or expirations of our shares of restricted stock or restricted stock units during the three and nine months ended September 30, 2012. As of September 30, 2012, we had 421 awards of nonvested restricted stock and restricted stock units outstanding which have a weighted average grant date fair value of $1.46. These represent shares issued to members of the board of directors as part of our former director compensation program. The shares will vest on the first anniversary of the date the applicable person ceases to be a director.

We recognized share-based payment expense associated with restricted stock units and shares of restricted stock of $0 for the three months ended September 30, 2012 and 2011 and $0 and $543 for the nine months ended September 30, 2012 and 2011, respectively.

Total unrecognized compensation costs related to unvested share-based payment awards for stock options and restricted stock units and shares granted to employees and members of our board of directors at September 30, 2012 and December 31, 2011, net of estimated forfeitures, was $146,028 and $129,983, respectively. The total unrecognized compensation costs at September 30, 2012 are expected to be recognized over a weighted-average period of three years.

401(k) Savings Plan

We sponsor the Sirius XM Radio 401(k) Savings Plan (the “Sirius XM Plan”) for eligible employees.

The Sirius XM Plan allows eligible employees to voluntarily contribute from 1% to 50% of their pre-tax eligible earnings, subject to certain defined limits. We match 50% of an employee’s voluntary contributions, up to 6% of an employee’s pre-tax salary, in the form of shares of common stock. Employer matching contributions under the Sirius XM Plan vest at a rate of 33.33% for each year of employment and are fully vested after three years of employment for all current and future contributions. Share-based payment expense resulting from the matching contribution to the Sirius XM Plan was $832 and $782 for the three months ended September 30, 2012 and 2011, respectively, and $3,011 and $2,365 for the nine months ended September 30, 2012 and 2011, respectively.

We may also elect to contribute to the profit sharing portion of the Sirius XM Plan based upon the total eligible compensation of eligible participants. These additional contributions in the form of shares of common stock are determined by the compensation committee of our board of directors. Employees are only eligible to receive profit-sharing contributions during any year in which they are employed on the last day of the year. We did not contribute to the profit sharing portion of the Sirius XM Plan in 2011 and we do not plan to contribute in 2012.