Quarterly report pursuant to Section 13 or 15(d)

Benefits Plans

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Benefits Plans
 6 Months Ended
Jun. 30, 2011
Benefits Plans [Abstract]  
Benefits Plans
(13) Benefits Plans
          We recognized share-based payment expense of $10,735 and $15,682 for the three months ended June 30, 2011 and 2010, respectively, and $22,023 and $31,223 for the six months ended June 30, 2011 and 2010, respectively. We did not realize any income tax benefits from share-based benefits plans during the three and six months ended June 30, 2011 and 2010 as a result of the full valuation allowance that is maintained for substantially all net deferred tax assets.
     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 June 30, 2011, approximately 271,986,000 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 are being continued.
          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   For the Six Months
    Ended June 30,   Ended June 30,
    2011   2010   2011   2010
Risk-free interest rate
    1.8 %     2.2 %     1.8 %     2.5 %
Expected life of options — years
    5.25       5.11       5.25       5.06  
Expected stock price volatility
    56 %     86 %     56 %     85 %
Expected dividend yield
    0 %     0 %     0 %     0 %
          There were no options granted to third parties during the three and six months ended June 30, 2011 and 2010.
          We estimate fair value of awards granted using the hybrid approach for volatility, which weights observable historical volatility and implied volatility of qualifying actively traded options on our common stock. In 2010, due to the lack of qualifying actively traded options on our common stock, we utilized a 100% weighting to observable historical volatility.
          The following table summarizes stock option activity under our share-based payment plans for the six months ended June 30, 2011 (shares in thousands):
                                 
                    Weighted-Average    
                    Remaining   Aggregate
            Weighted-Average   Contractual Term   Intrinsic
    Shares   Exercise Price   (Years)   Value
Outstanding, December 31, 2010
    401,870     $ 1.32                  
Granted
    719     $ 2.33                  
Exercised
    (7,346 )   $ 0.94                  
Forfeited, cancelled or expired
    (17,613 )   $ 4.30                  
 
                               
Outstanding, June 30, 2011
    377,630     $ 1.19       6.14     $ 495,613  
 
                               
Exercisable, June 30, 2011
    113,277     $ 2.42       4.67     $ 90,035  
 
                               
          The weighted average grant date fair value of options granted during the six months ended June 30, 2011 and 2010 was $1.17 and $0.47, respectively. The total intrinsic value of stock options exercised during the six months ended June 30, 2011 and 2010 was $7,393 and $221, respectively.
          We recognized share-based payment expense associated with stock options of $9,920 and $10,254 for the three months ended June 30, 2011 and 2010, respectively, and $19,897 and $20,780 for the six months ended June 30, 2011 and 2010, respectively.
          The following table summarizes the nonvested restricted stock and restricted stock unit activity under our share-based payment plans for the six months ended June 30, 2011 (shares in thousands):
                 
            Weighted-Average
            Grant Date
    Shares   Fair Value
Nonvested, December 31, 2010
    2,397     $ 2.57  
Granted
    —     $ —  
Vested restricted stock awards
    (1,854 )   $ 3.30  
Vested restricted stock units
    (101 )   $ 3.08  
Forfeited
    (21 )   $ 3.05  
 
               
Nonvested, June 30, 2011
    421     $ 1.46  
 
               
          There were no shares granted during the six months ended June 30, 2011 and 2010. The total intrinsic value of restricted stock and restricted stock units that vested during the six months ended June 30, 2011 and 2010 was $3,178 and $3,885, respectively.
          We recognized share-based payment expense associated with restricted stock units and shares of restricted stock of $1 and $2,116 for the three months ended June 30, 2011 and 2010, respectively, and $543 and $4,674 for the six months ended June 30, 2011 and 2010, 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 June 30, 2011 and December 31, 2010, net of estimated forfeitures, was $84,971 and $108,170, respectively. The weighted-average period over which the compensation expense for these awards is expected to be recognized is three years as of June 30, 2011.
     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 331/3% 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 plans was $814 and $718 for the three months ended June 30, 2011 and 2010, respectively, and $1,583 and $1,925 for the six months ended June 30, 2011 and 2010, 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 currently do not anticipate contributing to the profit sharing portion of the Sirius XM Plan in 2011. Profit-sharing contribution expense was $0 and $2,594 for the three months ended June 30, 2011 and 2010, respectively, and $0 and $3,844 for the six months ended June 30, 2011 and 2010, respectively.