Quarterly report pursuant to Section 13 or 15(d)

Benefits Plans

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Benefits Plans
 9 Months Ended
Sep. 30, 2011
Benefits Plans [Abstract]  
Benefits Plans
     (13) Benefits Plans
          We recognized share-based payment expense of $13,983 and $16,220 for the three months ended September 30, 2011 and 2010, respectively, and $36,006 and $47,443 for the nine months ended September 30, 2011 and 2010, respectively. We did not realize any income tax benefits from share-based benefits plans during the three and nine months ended September 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 September 30, 2011, approximately 196,121,000 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 Nine Months  
    Ended September 30,     Ended September 30,  
    2011     2010     2011     2010  
Risk-free interest rate
    1.1 %     1.5 %     1.1 %     1.7 %
Expected life of options — years
    5.27       5.33       5.27       5.28  
Expected stock price volatility
    68 %     85 %     68 %     85 %
Expected dividend yield
    0 %     0 %     0 %     0 %
          There were no options granted to third parties during the three and nine months ended September 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 nine months ended September 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
    77,451     $ 1.80                  
Exercised
    (9,965 )   $ 0.91                  
Forfeited, cancelled or expired
    (24,288 )   $ 4.32                  
 
                               
Outstanding, September 30, 2011
    445,068     $ 1.25       6.60     $ 278,467  
 
                               
Exercisable, September 30, 2011
    145,867     $ 1.89       5.49     $ 81,314  
 
                               
          The weighted average grant date fair value of options granted during the nine months ended September 30, 2011 and 2010 was $1.04 and $0.66, respectively. The total intrinsic value of stock options exercised during the nine months ended September 30, 2011 and 2010 was $10,011 and $5,611, respectively.
          We recognized share-based payment expense associated with stock options of $13,201 and $11,679 for the three months ended September 30, 2011 and 2010, respectively, and $33,098 and $32,459 for the nine months ended September 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 nine months ended September 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, September 30, 2011
    421     $ 1.46  
 
               
          There were no restricted stock awards or restricted stock units granted during the nine months ended September 30, 2011 and 2010. The total intrinsic value of restricted stock and restricted stock units that vested during the nine months ended September 30, 2011 and 2010 was $3,178 and $3,923, respectively.
          We recognized share-based payment expense associated with restricted stock units and shares of restricted stock of $0 and $1,385 for the three months ended September 30, 2011 and 2010, respectively, and $543 and $6,059 for the nine months ended September 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 September 30, 2011 and December 31, 2010, net of estimated forfeitures, was $145,460 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 September 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 Sirius XM Plan was $782 and $724 for the three months ended September 30, 2011 and 2010, respectively, and $2,365 and $2,649 for the nine months ended September 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 $2,432 for the three months ended September 30, 2011 and 2010, respectively, and $0 and $6,276 for the nine months ended September 30, 2011 and 2010, respectively.