Quarterly report pursuant to Section 13 or 15(d)

Benefit Plans

v2.4.0.8
Benefit Plans
9 Months Ended
Sep. 30, 2014
Compensation and Retirement Disclosure [Abstract]  
Benefit Plans
Benefit Plans

We recognized share-based payment expense of $21,805 and $19,762 for the three months ended September 30, 2014 and 2013, respectively, and $57,832 and $49,774 for the nine months ended September 30, 2014 and 2013, 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 awards, 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, 2014, approximately 20,896,000 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, and all outstanding awards are fully vested.

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,
 
2014
 
2013
 
2014
 
2013
Risk-free interest rate
1.7%
 
1.5%
 
1.6%
 
1.4%
Expected life of options — years
4.78
 
4.73
 
4.72
 
4.72
Expected stock price volatility
33%
 
47%
 
33%
 
48%
Expected dividend yield
0%
 
0%
 
0%
 
0%


There were no options granted to third parties during the three and nine months ended September 30, 2014 and 2013. We do not intend to pay regular dividends on our common stock. Accordingly, the dividend yield percentage used in the Black-Scholes-Merton option value was zero for all periods.

The following table summarizes stock option activity under our share-based plans for the nine months ended September 30, 2014 (options in thousands):
 
Options
 
Weighted-
Average
Exercise
Price
 
Weighted-Average
Remaining
Contractual Term
(Years)
 
Aggregate
Intrinsic
Value
Outstanding as of December 31, 2013
264,239

 
$
2.42

 
 
 
 
Granted
59,534

 
$
3.39

 
 
 
 
Exercised
(33,878
)
 
$
1.67

 
 
 
 
Forfeited, cancelled or expired
(8,297
)
 
$
4.22

 
 
 
 
Outstanding as of September 30, 2014
281,598

 
$
2.67

 
7.24
 
$
269,957

Exercisable as of September 30, 2014
134,344

 
$
2.21

 
5.52
 
$
204,055



The weighted average grant date fair value of options granted during the nine months ended September 30, 2014 and 2013 was $1.05 and $1.48, respectively. The total intrinsic value of stock options exercised during the nine months ended September 30, 2014 and 2013 was $62,650 and $104,785, respectively. During the nine months ended September 30, 2014, the number of shares which were issued as a result of stock option exercises was 11,212,077.

We recognized share-based payment expense associated with stock options of $19,318 and $18,860 for the three months ended September 30, 2014 and 2013, respectively, and $52,126 and $48,661 for the nine months ended September 30, 2014 and 2013, respectively.

The following table summarizes the nonvested restricted stock unit activity under our share-based plans for the nine months ended September 30, 2014 (shares in thousands):
 
Shares
 
Grant Date Fair Value
Nonvested as of December 31, 2013
6,984

 
$
3.58

Granted
5,883

 
$
3.39

Vested restricted stock units
(1,105
)
 
$
3.61

Forfeited
(224
)
 
$
3.56

Nonvested as of September 30, 2014
11,538

 
$
3.48



The weighted average grant date fair value of restricted stock units granted during the nine months ended September 30, 2014 and 2013 was $3.39 and $3.58, respectively. The total intrinsic value of restricted stock units that vested during the nine months ended September 30, 2014 and 2013 was $3,924 and $605, respectively. We recognized share-based payment expense associated with restricted stock units of $2,487 and $902 during the three months ended September 30, 2014 and 2013, respectively, and $5,706 and $1,113 during the nine months ended September 30, 2014 and 2013, respectively. During the nine months ended September 30, 2014, the number of shares which were issued as a result of restricted stock units that vested were 710,728.

Total unrecognized compensation costs related to unvested share-based payment awards for stock options and restricted stock units granted to employees and members of our board of directors at September 30, 2014 and December 31, 2013, net of estimated forfeitures, were $182,649 and $164,292, respectively. The total unrecognized compensation costs at September 30, 2014 are expected to be recognized over a weighted-average period of 3 years.

401(k) Savings Plan
Sirius XM sponsors the Sirius XM Radio Inc. 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 per pay period on the first 6% of an employee’s pre-tax salary up to a maximum of 3% of eligible compensation. 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. Beginning in January 2014, our cash employer matching contributions are no longer used to purchase shares of our common stock on the open market, unless the employee elects our common stock as their investment option for this contribution. Prior to January 2014, the cash from employer matching contributions was used to purchase shares of our common stock on the open market. We contributed $1,190 and $944 during the three months ended September 30, 2014 and 2013, respectively, and $4,323 and $3,331, during the nine months ended September 30, 2014 and 2013, respectively, to the Sirius XM Plan in fulfillment of our matching obligation.