UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended June 30, 2000
Commission file number 0-24710
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SIRIUS SATELLITE RADIO INC.
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(Exact name of registrant as specified in its charter)
Delaware 52-1700207
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1221 Avenue of the Americas, 36th Floor
New York, New York 10020
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(Address of principal executive offices)
(Zip code)
212-584-5100
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.001 par value 41,955,630 shares
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(Class) (Outstanding as of August 7, 2000)
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARY
(A Development Stage Enterprise)
INDEX
Part I - Financial Information
Page
-----
Consolidated Statements of Operations (unaudited) for the three 1
and six month periods ended June 30, 2000 and 1999 and for
the period May 17, 1990 (date of inception) to June 30, 2000
Consolidated Balance Sheets as of June 30, 2000 (unaudited) 2
and December 31, 1999
Consolidated Statements of Cash Flows (unaudited) for the six 3
month periods ended June 30, 2000 and 1999 and for the
period May 17, 1990 (date of inception) to June 30, 2000
Notes to Consolidated Financial Statements (unaudited) 4
Management's Discussion and Analysis of Financial Condition and 6
Results of Operations
Part II - Other Information 13
Signatures 14
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Cumulative for
the period
For the Three Months Ended June 30, For the Six Months Ended June 30, May 17, 1990
---------------------------------- -------------------------------- (date of inception)
2000 1999 2000 1999 to June 30, 2000
--------- --------- -------- -------- -----------------
Revenue $ -- $ -- $ -- $ -- $ --
Operating expenses:
Engineering design and development (17,256) (7,433) (34,154) (14,344) (73,704)
General and administrative (11,612) (6,454) (21,490) (11,418) (82,418)
Special charges -- -- -- -- (27,682)
--------- --------- -------- -------- ---------
Total operating expenses (28,868) (13,887) (55,644) (25,762) (183,804)
--------- --------- -------- -------- ---------
Other income (expense):
Interest and investment income 6,595 3,536 14,426 6,400 43,580
Interest expense (12,519) (2,250) (18,385) (3,683) (51,575)
--------- --------- -------- -------- ---------
(5,924) 1,286 (3,959) 2,717 (7,995)
--------- --------- -------- -------- ---------
Loss before income taxes (34,792) (12,601) (59,603) (23,045) (191,799)
Income taxes:
Federal -- -- -- -- (1,982)
State -- -- -- -- (313)
--------- --------- -------- -------- ---------
Net loss (34,792) (12,601) (59,603) (23,045) (194,094)
--------- --------- -------- -------- ---------
Preferred stock dividends (9,486) (7,522) (20,324) (14,852) (72,363)
Preferred stock deemed dividends (698) (2,278) (7,916) (4,534) (75,102)
Accretion of dividends in connection with
the issuance of warrants on preferred
stock (6) (74) (900) (148) (7,704)
--------- --------- -------- -------- ---------
Net loss applicable to common stockholders $ (44,982) $ (22,475) $(88,743) $(42,579) $(349,263)
========= ========= ======== ======== =========
Net loss per share applicable to
common stockholders (basic and diluted) $ (1.11) $ (0.97) $ (2.45) $ (1.83)
========= ========= ======== ========
Weighted average common shares
outstanding (basic and diluted) 40,643 23,265 36,163 23,245
========= ========= ======== ========
The accompanying notes are an integral part of these
consolidated financial statements.
1
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
June 30, December 31,
2000 1999
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 27,415 $ 81,809
Marketable securities, at market 318,663 317,810
Restricted investments, at amortized cost 54,636 67,454
Prepaid expenses and other 4,747 741
----------- -----------
Total current assets 405,461 467,814
----------- -----------
Property and equipment, at cost:
Satellites and launch vehicles 773,646 574,679
Broadcast studio equipment 17,227 15,731
Leasehold improvements 17,493 15,285
Technical equipment and other 27,927 18,653
----------- -----------
836,293 624,348
Less: accumulated depreciation (1,732) (880)
----------- -----------
834,561 623,468
----------- -----------
Other assets:
FCC license 83,368 83,368
Debt issue costs, net 21,314 23,053
Deposits and other 19,867 8,909
----------- -----------
Total other assets 124,549 115,330
----------- -----------
Total assets $ 1,364,571 $ 1,206,612
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 34,208 $ 30,454
Satellite and launch construction payable 14,917 19,275
Short-term notes payable - 114,075
----------- -----------
Total current liabilities 49,125 163,804
Long-term notes payable and accrued interest 453,844 488,835
Deferred satellite payments and accrued interest 57,924 55,140
Deferred income taxes 2,237 2,237
----------- -----------
Total liabilities 563,130 710,016
----------- -----------
Commitments and contingencies:
10 1/2% Series C Convertible Preferred Stock, no par value: 2,025,000
shares authorized, none and 1,248,776 shares issued and outstanding at
June 30, 2000 and December 31, 1999, respectively (liquidation preferences
of $0 and $124,878), at net carrying value including accrued dividends -- 149,285
9.2% Series A Junior Cumulative Convertible Preferred Stock, $.001 par
value: 4,300,000 shares authorized, 1,461,270 shares issued and
outstanding at June 30, 2000 and December 31, 1999 (liquidation
preference of $146,127), at net carrying value including accrued dividends 155,504 148,894
9.2% Series B Junior Cumulative Convertible Preferred Stock, $.001 par
value: 2,100,000 shares authorized, 655,406 shares issued and
outstanding at June 30, 2000 and December 31, 1999 (liquidation
preference of $65,541), at net carrying value including accrued dividends 67,312 64,238
9.2% Series D Junior Cumulative Convertible Preferred Stock, $.001 par
value: 10,700,000 shares authorized, 2,000,000 shares issued and
outstanding at June 30, 2000 (liquidation preference of $200,000), at
net carrying value including accrued dividends 200,365 --
Stockholders' equity:
Preferred stock, $.001 par value: 50,000,000 shares authorized, -- --
8,000,000 shares designated as 5% Delayed Convertible Preferred
Stock, none issued or outstanding
Common stock, $.001 par value: 200,000,000 shares authorized, 42 29
41,907,601 and 28,721,041 shares issued and outstanding at
June 30, 2000 and December 31, 1999, respectively
Additional paid-in capital 572,312 268,641
Deficit accumulated during the development stage (194,094) (134,491)
----------- -----------
Total stockholders' equity 378,260 134,179
----------- -----------
Total liabilities and stockholders' equity $ 1,364,571 $ 1,206,612
=========== ===========
The accompanying notes are an integral part of these
consolidated financial statements.
2
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Cumulative for
the period
For the Six Months Ended June 30, May 17, 1990
--------------------------------- (date of inception)
2000 1999 to June 30, 2000
------------ ------------ -------------------
Cash flows from development stage activities:
Net loss $ (59,603) $ (23,045) $ (194,094)
Adjustments to reconcile net loss to net cash provided by
(used in) development stage activities:
Depreciation expense 979 246 2,143
Unrealized (gain) loss on marketable securities (968) 181 (4,850)
Loss on disposal of assets 249 10 364
Special charges -- -- 25,557
Accretion of notes payable charged as interest expense 38,498 20,553 122,563
Compensation expense in connection with
issuance of Common Stock and stock options 3,742 659 8,284
Expense incurred in connection with induced conversion of 12,655 -- 14,431
Increase (decrease) in cash and cash equivalents
resulting from changes in assets and liabilities:
Prepaid expenses and other (4,006) (769) (4,747)
Due to related party -- -- 351
Other assets (11,332) (2,046) (17,388)
Accounts payable and accrued expenses (15,619) 6,632 (6,048)
Deferred taxes -- -- 2,237
----------- ---------- ----------
Net cash provided by (used in) development stage activities (35,405) 2,421 (51,197)
----------- ---------- ----------
Cash flows from investing activities:
Sales (purchases) of marketable securities and restricted
investments, net 12,615 (59,141) (368,754)
Purchase of FCC license -- -- (83,368)
Payments for construction of satellites and launch vehicles (200,541) (102,143) (723,068)
Other capital expenditures (14,434) (25,649) (67,467)
Acquisition of Sky-Highway Radio Corp. -- -- (2,000)
----------- ---------- ----------
Net cash used in investing activities (202,360) (186,933) (1,244,657)
----------- ------------ ----------
Cash flows from financing activities:
Proceeds from issuance of notes payable 1,882 24,663 253,144
Proceeds from issuance of Common Stock, net 100,100 67 361,880
Proceeds from issuance of preferred stock, net 192,450 -- 505,418
Proceeds from exercise of stock options and warrants 4,896 699 11,479
Proceeds from issuance of promissory notes
and units, net -- 190,000 306,535
Proceeds from issuance of promissory notes to
related parties -- -- 2,965
Repayment of promissory notes -- -- (2,635)
Repayment of notes payable (115,957) -- (115,957)
Loan from officer -- -- 440
----------- ---------- ----------
Net cash provided by financing activities 183,371 215,429 1,323,269
----------- ---------- ----------
Net increase (decrease) in cash and cash equivalents (54,394) 30,917 27,415
Cash and cash equivalents at the beginning of period 81,809 204,753 --
----------- ---------- ----------
Cash and cash equivalents at the end of period $ 27,415 $ 235,670 $ 27,415
=========== ========== ==========
The accompanying notes are an integral part of these
consolidated financial statements.
3
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARY
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, unless otherwise stated)
(Unaudited)
General
The accompanying consolidated financial statements and the notes
thereto do not include all of the information and disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles. In the opinion of management, all adjustments (consisting
only of normal, recurring adjustments) considered necessary to fairly state our
consolidated financial position and consolidated results of operations have been
included. These financial statements should be read in connection with our
consolidated financial statements and the notes thereto for the fiscal year
ended December 31, 1999 included in our Annual Report on Form 10-K as filed with
the Securities and Exchange Commission.
Net Loss Per Share
Basic loss per share is based on the weighted average number of
outstanding shares of our Common Stock. Diluted loss per share adjusts the
weighted average for the potential dilution that could occur if common stock
equivalents (i.e. convertible stock, convertible debt, warrants and stock
options) were exercised or converted into Common Stock. As of June 30, 2000 and
1999, approximately 21,347,000 and 13,849,000 common stock equivalents were
outstanding, respectively, and were excluded from the calculation of diluted
loss per share, as they were antidilutive.
Marketable Securities
Marketable securities consist of fixed income securities and are stated
at market value. Marketable securities are defined as trading securities under
the provision of SFAS No. 115, "Accounting for Certain Investments in Debt and
Equity Securities" ("SFAS No. 115"), and unrealized holding gains and losses are
reflected in earnings. Unrealized holding gains were $4,489 and $3,882 at June
30, 2000 and December 31, 1999, respectively.
Restricted Investments
Restricted investments consist of fixed income securities and are
stated at amortized cost plus accrued interest. Restricted investments are
defined as held-to-maturity securities under the provision of SFAS No. 115 and
unrealized holding gains and losses are not reflected in earnings. Unrealized
holding losses were $598 and $716 at June 30, 2000 and December 31, 1999,
respectively. The securities included in restricted investments are restricted
to provide for the payment of interest due on our 14 1/2% Senior Secured Notes
due 2009 through May 15, 2002.
Property and Equipment
Property and equipment are recorded at cost and include interest on
funds borrowed to finance construction. Capitalized interest was $110,509 and
$72,810 at June 30, 2000 and December 31, 1999, respectively.
4
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARY
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements - (continued)
(Dollar amounts in thousands, unless otherwise stated)
(Unaudited)
Short-Term Notes Payable
We entered into a credit agreement with Bank of America and other
lenders in July 1998 under which Bank of America and other lenders provided us a
$115,000 term loan. The proceeds of this facility were used to fund progress
payments for the purchase of launch services and to pay interest, fees and other
related expenses. On February 29, 2000, we repaid these loans and cancelled the
related credit agreement.
Deferred Satellite Payments
Under an amended and restated contract (the "Loral Satellite Contract")
with Space Systems/Loral, Inc. ("Loral"), Loral has deferred certain amounts due
under the Loral Satellite Contract. The amounts deferred bear interest at 10%
per year and are due in quarterly installments beginning in June 2002. We have
the right to prepay these deferred payments, together with accrued interest,
without penalty.
Engineering Design and Development Costs
We have entered into an agreement with Lucent Technologies, Inc.
("Lucent") pursuant to which Lucent has agreed to use commercially reasonable
efforts to deliver integrated circuits ("chip sets") which will be used in
consumer electronic devices capable of receiving our broadcasts. In addition, we
have entered into agreements with various equipment manufacturers, including
Alpine Electronics Inc., Audiovox Corporation, Clarion Co., Ltd., Delphi Delco
Electronics Systems, Kenwood Corporation, Matsushita Communication Industrial
Corporation of USA, Pioneer Corporation, Mitsubishi Electric Automotive America,
Inc., Recoton Corporation, Sanyo Electronic Co. Ltd., Visteon Automotive Systems
and other contract manufacturers, to design and develop radios and have agreed
to pay certain development costs of these radios. We record expenses under these
agreements as the work is performed. Total expenses related to these agreements
were $12,587, $6,398 and $51,121 for the three months ended June 30, 2000 and
1999 and for the period May 17, 1990 (date of inception) to June 30, 2000,
respectively.
Reclassifications
Certain amounts in the prior period's financial statements have been
reclassified to conform to the current period presentation.
5
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARY
(A Development Stage Enterprise)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(Dollar amounts in thousands, unless otherwise stated)
Special Note Regarding Forward-Looking Statements
The following cautionary statements identify important factors that
could cause our actual results to differ materially from those projected in
forward-looking statements made in this Quarterly Report on Form 10-Q and in
other reports and documents published by us from time to time. Any statements
about our expectations, beliefs, plans, objectives, assumptions, future events
or performance are not historical facts and may be "forward-looking" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
are often, but not always, made through the use of words or phrases such as
"will likely result," "are expected to," "will continue," "is anticipated,"
"estimated," "intends," "plans," "projection" and "outlook." Accordingly, these
statements involve estimates, assumptions and uncertainties that could cause our
actual results to differ materially from those expressed in the forward-looking
statements. Any forward-looking statements are qualified in their entirety by
reference to other factors discussed throughout our Annual Report on Form 10-K
for the year ended December 31, 1999 (the "1999 Form 10-K"), and particularly
the risk factors set forth under the caption "Business--Risk Factors" in Part I
of the 1999 Form 10-K. Among the significant factors that have a direct bearing
on our results of operations are:
-- unavailability of radios and antennas and our dependence upon third
parties to design, develop, manufacture and distribute radios and
antennas;
-- our dependence on Loral for construction and launch of our satellites;
-- the potential risk of delay in implementing our business plan;
-- risk of launch failure;
-- unproven market for our service and unproven applications of
technology; and
-- our need for additional financing.
Because the risk factors referred to above could cause actual results
or outcomes to differ materially from those expressed in any forward-looking
statements made by us or on our behalf, you should not place undue reliance on
any such forward-looking statements. Further, any forward-looking statements
speak only as of the date on which such statement is made, and we undertake no
obligation to update any forward-looking statement or statements to reflect
events or circumstances after the date on which such statement is made or to
reflect the occurrence of unanticipated events. New factors emerge from time to
time, and it is not possible for us to predict which will arise. In addition, we
cannot assess the impact of each such factor on our business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
6
Overview
Sirius Satellite Radio Inc. ("Sirius Radio") was organized in May 1990
and is in its development stage. Our principal activities to date have included
developing our technology, obtaining regulatory approval for our service,
commencing construction of four satellites, constructing our production and
broadcast facility, acquiring content for our programming, developing our ground
repeater system, arranging for the design and development of radios, strategic
planning, market research, recruiting our management team and securing financing
for capital expenditures and working capital. We will require funds for working
capital, interest on borrowings, acquisition of programming, financing costs and
operating expenses until some time after we commence operations. We cannot
assure you that we will ever commence operations, that we will attain any
particular level of revenues or that we will achieve profitability.
Upon commencing operations, we expect our primary source of revenues to
be subscription fees. We currently anticipate that our subscription fee will be
$9.95 per month, with a one time activation fee per subscriber. In addition, we
expect to derive revenues from directly selling or bartering advertising on our
non-music channels. We do not expect to recognize revenues from operations until
the first quarter of 2001, at the earliest. We do not intend to manufacture the
radios necessary to receive our service and thus we do not expect to receive
any revenues from their sale.
We expect that the operating expenses associated with our service will
consist primarily of marketing, sales, programming, maintenance of our satellite
and broadcasting system and general and administrative costs. Costs to acquire
programming are expected to include payments to build and maintain an extensive
music library and royalty payments for broadcasting music (which are likely to
be calculated based on a percentage of revenues). As of August 7, 2000, we had
135 employees. By commencement of operations, we expect to have approximately
200 employees.
On June 30, 2000, our first satellite, Sirius-1, was successfully
launched. Loral delivered title to Sirius-1 to us on July 31, 2000, following
the completion of in-orbit testing. Our second satellite, Sirius-2, arrived at
the launch site in Kazakhstan on August 6, 2000 and is expected to be launched
between September 5, 2000 and September 15, 2000. Our third satellite, Sirius-3,
is expected to be launched in October 2000. Sirius-4, our spare satellite,
previously scheduled for delivery to ground storage in December 2000, will be
delayed. A revised delivery date for Sirius-4 is expected in the next few weeks.
Results of Operations
Three Months Ended June 30, 2000 Compared with Three Months Ended June 30, 1999
We had net losses of $34,792 and $12,601 for the three months ended
June 30, 2000 and 1999, respectively. Our total operating expenses were $28,868
and $13,887 for the three months ended June 30, 2000 and 1999, respectively.
Engineering design and development costs were $17,256 and $7,433 for
the three months ended June 30, 2000 and 1999, respectively. Engineering costs
incurred in the 2000 quarter and the 1999 quarter represented primarily payments
to Lucent and consumer electronic manufacturers in connection with our radio
development efforts. The increase in these costs in the 2000 quarter resulted
primarily from the increased activity in the radio development effort as we
prepare to launch our service.
General and administrative expenses increased for the three months
ended June 30, 2000 to $11,612 from $6,454 for the three months ended June 30,
1999. General and administrative expenses increased due to the occupancy of our
national broadcast studios and the growth of our management team and workforce.
The major components of general and administrative expenses in the 2000 quarter
were salaries and employment related costs (48%) and rent and occupancy costs
(12%), while in the 1999 quarter the major components were salaries and
employment related costs (32%) and rent and occupancy costs (21%). The remaining
portion of
7
general and administrative expenses (40% in the 2000 quarter and 47% in the 1999
quarter) consisted of other costs such as legal and regulatory, insurance,
marketing, consulting, travel, depreciation and supplies, with no such amount
exceeding 10% of the total in the 2000 quarter and only legal and regulatory
costs (13%) exceeding 10% of the total in the 1999 quarter.
The increase in interest and investment income to $6,595 for the three
months ended June 30, 2000 from $3,536 for the three months ended June 30, 1999
was the result of higher average balances of cash, marketable securities and
restricted investments during the 2000 quarter. The higher average balances of
cash, marketable securities and restricted investments during the 2000 quarter
were due to the proceeds from financing activities in 1999 and 2000, including
the issuance of our 14 1/2% Senior Secured Notes due 2009, 8 3/4% Convertible
Subordinated Notes due 2009, 9.2% Series B Junior Cumulative Convertible
Preferred Stock, 9.2% Series D Junior Cumulative Convertible Preferred Stock and
5,740,322 shares of our Common Stock.
Interest expense was $12,519 for the three months ended June 30, 2000
and $2,250 for the three months ended June 30, 1999, net of capitalized interest
of $20,181 and $13,265, respectively. The increase in interest expense in the
2000 quarter was related primarily to the induced conversion of a portion of our
8 3/4% Convertible Subordinated Notes due 2009. Gross interest expense increased
by an amount ($17,185) less than the corresponding increase in capitalized
interest ($6,916). The increase in gross interest expense for the 2000 quarter
was due to interest accruing on our 14 1/2% Senior Secured Notes due 2009 issued
in May 1999 and our 8 3/4% Convertible Subordinated Notes due 2009 issued in
September and October 1999.
Six Months Ended June 30, 2000 Compared with Six Months Ended June 30, 1999
We had net losses of $59,603 and $23,045 for the six months ended June
30, 2000 and 1999, respectively. Our total operating expenses were $55,644 and
$25,762 for the six months ended June 30, 2000 and 1999, respectively.
Engineering design and development costs were $34,154 and $14,344 for
the six months ended June 30, 2000 and 1999, respectively. Engineering costs
incurred in the 2000 period and the 1999 period represented primarily payments
to Lucent and payments to consumer electronic manufacturers in connection with
our radio development efforts. The increase in these costs in the 2000 period
resulted primarily from the increased activity in the radio development
effort as we prepare to launch our service.
General and administrative expenses increased for the six months ended
June 30, 2000 to $21,490 from $11,418 for the six months ended June 30, 1999.
General and administrative expenses increased due to the occupancy of our
national broadcast studios and the growth of our management team and workforce.
The major components of general and administrative expenses in the 2000 period
were salaries and employment related costs (47%) and rent and occupancy costs
(13%), while in the 1999 period the major components were salaries and
employment related costs (30%) and rent and occupancy costs (25%). The remaining
portion of general and administrative expenses (40% in the 2000 period and 45%
in the 1999 period) consisted of other costs such as legal and regulatory,
insurance, marketing, consulting, travel, depreciation and supplies, with only
marketing expenses (11%) exceeding 10% of the total in the 2000 period and only
legal and regulatory costs (14%) exceeding 10% of the total in the 1999 period.
The increase in interest and investment income to $14,426 for the six
months ended June 30, 2000 from $6,400 for the six months ended June 30, 1999
was the result of higher average balances of cash, marketable securities and
restricted investments during the 2000 period. The higher average balances of
cash, marketable securities and restricted investments during the 2000 period
were due to the proceeds from financing activities in 1999 and 2000, including
the issuance of our 14 1/2% Senior Secured Notes due 2009, 8 3/4% Convertible
Subordinated Notes due 2009, 9.2% Series B Junior Cumulative Convertible
Preferred Stock, 9.2% Series D Junior Cumulative Convertible Preferred Stock and
5,740,322 shares of our Common Stock.
8
Interest expense was $18,385 for the six months ended June 30, 2000 and
$3,683 for the six months ended June 30, 1999, net of capitalized interest of
$37,699 and $23,392, respectively. The increase in interest expense for the 2000
period was related primarily to the induced conversion of a portion of our 8
3/4% Convertible Subordinated Notes due 2009. Gross interest expense increased
by an amount ($29,009) greater than the corresponding increase in capitalized
interest ($14,307). The increase in gross interest expense for the 2000 period
was due to interest accruing on our 14 1/2% Senior Secured Notes due 2009 issued
in May 1999 and our 8 3/4% Convertible Subordinated Notes due 2009 issued in
September and October 1999.
Liquidity and Capital Resources
At June 30, 2000, we had cash, cash equivalents, marketable securities
and restricted investments totaling $400,714 and working capital of $356,336
compared with cash, cash equivalents, marketable securities and restricted
investments totaling $467,073 and working capital of $304,010 at December 31,
1999.
Funding Requirements
We believe we can fund our planned operations, including the
construction of our broadcast system, into the fourth quarter of 2001 from our
existing working capital and the Lehman Term Loan Facility (as defined in
"Sources of Funding" below). We anticipate that we will require approximately
$75,000 to fund our operations during the balance of 2001, although this amount
is subject to a number of factors affecting our operations. In addition, we may
require additional funds until our revenues grow substantially.
To build and launch the satellites necessary to transmit our service we
entered into the Loral Satellite Contract. The Loral Satellite Contract provides
for Loral to construct, launch and deliver three satellites in-orbit and
checked-out, to construct for us a fourth satellite for use as a ground spare
and to provide satellite launch services. We are committed to make aggregate
payments of approximately $745,040 under the Loral Satellite Contract, which
includes $15,000 of long-lead time parts for a fifth satellite and $3,400 for
integration analysis of the viability of using the Sea Launch platform as an
alternative launch vehicle for our satellites. As of June 30, 2000, $587,087 of
this obligation had been satisfied. Under the Loral Satellite Contract, with the
exception of a payment made to Loral in March 1993, payments are made in
installments that commenced in April 1997 and will end in December 2003.
Approximately half of all payments under the Loral Satellite Contract are
contingent upon Loral meeting specified milestones.
We also will require funds for working capital, interest on borrowings,
acquisition of programming, financing costs and operating expenses until some
time after we commence operations. We expect our interest expense will increase
significantly when compared to our 1999 interest expense as a result of the
issuance of our 14 1/2% Senior Secured Notes due 2009 in May 1999 and our 8 3/4%
Convertible Subordinated Notes due 2009 in September and October 1999. A portion
of the net proceeds of the issuance of our 14 1/2% Senior Secured Notes due 2009
was used to purchase a portfolio of U.S. government securities in an amount
sufficient to pay interest on these notes through May 15, 2002.
The amount and timing of our actual cash requirements will depend upon
numerous factors including costs associated with the construction and deployment
of our satellite system and ground repeater network, costs associated with
the design and development of chip sets and radios, the rate of growth of our
business after commencing service, costs of financing and the possibility of
unanticipated costs. We will require additional funds if there are delays, cost
overruns, unanticipated expenses, launch failures, satellite system or launch
services change orders or any shortfalls in estimated levels of operating cash
flow.
9
Sources of Funding
To date, we have funded our capital needs through the issuance of debt
and equity securities. As of June 30, 2000 we had received a total of
approximately $874,000 in equity capital as a result of the following
transactions: (1) the sale of shares of our Common Stock prior to the issuance
of our FCC license (net proceeds of approximately $22,000); (2) the sale of
5,400,000 shares of 5% Delayed Convertible Preferred Stock (net proceeds of
approximately $121,000) in April 1997 (in November 1997, we exchanged
1,846,799 shares of our 10 1/2% Series C Convertible Preferred Stock for all
the outstanding shares of 5% Delayed Convertible Preferred Stock); (3) the
sale of 4,955,488 shares of our Common Stock (net proceeds of approximately
$71,000) in 1997; (4) the sale of 5,000,000 shares of our Common Stock to
Prime 66 Partners, L.P. (net proceeds of approximately $98,000) in November
1998; (5) the sale of 1,350,000 shares of our 9.2% Series A Junior Cumulative
Convertible Preferred Stock to the Apollo Investment Fund IV, L.P. and Apollo
Overseas Partners IV, L.P. (collectively, the "Apollo Investors") (net
proceeds of approximately $129,000) in December 1998; (6) the sale of 650,000
shares of our 9.2% Series B Junior Cumulative Convertible Preferred Stock to
the Apollo Investors (net proceeds of approximately $63,000) in November 1999;
(7) the sale of 3,000,000 shares of our Common Stock in an underwritten
public offering (net proceeds of approximately $68,000) in September 1999, and
an additional 450,000 shares of our Common Stock in connection with the
exercise of the underwriters' over-allotment option (net proceeds of
approximately $10,000) in October 1999; (8) the sale of 2,000,000 shares
of our 9.2% Series D Junior Cumulative Convertible Preferred Stock to certain
affiliates of The Blackstone Group, L.P. (net proceeds of approximately
$192,000) in January 2000; and (9) the sale of 2,290,322 shares of our Common
Stock to DaimlerChrysler Corporation (net proceeds of approximately $100,000)
in February 2000.
In September 1999, we issued $125,000 aggregate principal amount of our
8 3/4% Convertible Subordinated Notes due 2009 in an underwritten public
offering (net proceeds of approximately $119,000). In October 1999, we issued an
additional $18,750 aggregate principal amount of our 8 3/4% Convertible
Subordinated Notes due 2009 to the underwriters of this offering in connection
with their over-allotment option (net proceeds of approximately $18,000). In May
1999, we received net proceeds of approximately $190,000 from the issuance of
200,000 units, each consisting of $1 aggregate principal amount of our 14 1/2%
Senior Secured Notes due 2009 and three warrants, each to purchase 3.947 shares
of our Common Stock (as of June 30, 2000). The warrants are exercisable through
May 15, 2009 at an exercise price of $26.45 per share (as of June 30, 2000). We
invested approximately $79,300 of these net proceeds in a portfolio of U.S.
government securities, which we pledged as security for payment in full of
interest on the 14 1/2% Senior Secured Notes due 2009 through May 15, 2002. In
November 1997, we received net proceeds of $116,000 from the issuance of 12,910
units, each consisting of $20 aggregate principal amount at maturity of our 15%
Senior Secured Discount Notes due 2007 and a warrant to purchase additional 15%
Senior Secured Discount Notes due 2007 with an aggregate principal amount at
maturity of $3. All of these warrants were exercised in 1997. The aggregate
value at maturity of our 15% Senior Secured Discount Notes due 2007 is
approximately $297,000. Our 15% Senior Secured Discount Notes due 2007 mature on
December 1, 2007 and the first cash interest payment is due in June 2003. The
indentures governing our 14 1/2% Senior Secured Notes due 2009 and our 15%
Senior Secured Discount Notes due 2007 contain limitations on our ability to
incur additional indebtedness and are secured by a pledge of the stock of
Satellite CD Radio Inc., our subsidiary that holds our FCC license. In April
2000, we acquired $52,906 of our 8 3/4% Convertible Subordinated Notes due 2009
in exchange for shares of our Common Stock.
In July 1998, we entered into a term loan agreement with a group of
financial institutions pursuant to which these lenders provided us $115,000 of
term loans. The proceeds of these loans were used to fund a portion of the
progress payments required to be made by us under the Loral Satellite Contract
for the purchase of launch services and to pay interest, fees and other expenses
related to these loans. On February 29, 2000, we repaid these loans and
cancelled the related credit agreement.
10
Loral has deferred a total of $50,000 of payments under the Loral
Satellite Contract originally scheduled for payment in 1999. These deferred
amounts bear interest at 10% per year and all interest on these deferred
amounts will accrue until December 2001, at which time interest will be payable
quarterly in cash. The principal amounts of the deferred payments under the
Loral Satellite Contract are required to be paid in six installments between
June 2002 and December 2003. As collateral security for these deferred payments,
we have granted Loral a security interest in our ground repeater network.
If there is a satellite or launch failure, we will be required to pay Loral the
deferred amount related to the affected satellite no later than 120 days after
the date of the failure. If we elect to put one of our first three satellites
into ground storage, rather than having it shipped to the launch site, the
deferred amount related to that satellite would become due within 60 days of
this election.
In June 2000, we entered into an agreement with Lehman Commercial Paper
Inc. ("Lehman") and Lehman Brothers Inc. pursuant to which Lehman agreed to
provide a term loan facility (the "Lehman Term Loan Facility") for us in the
aggregate principal amount of $150,000. The loans under the Lehman Term Loan
Facility will be made available to us upon our successful launch of a second
satellite, the demonstration of our broadcast system and upon satisfaction of
certain customary conditions, and the proceeds will be used for working capital,
capital expenditures and general corporate purposes. In connection with the
Lehman Term Loan Facility, we placed into escrow, for the benefit of Lehman,
1,050,000 warrants, each to purchase one share of our Common Stock. The exercise
price of 525,000 of these warrants (the "First Tranche Warrants") is $44.46 per
share. The exercise price of the remaining 525,000 warrants (the "Second
Tranche Warrants") will be equal to 110% of the twenty trading day trailing
average price of our Common Stock on the date that is twenty trading days after
we take title to a second satellite under the Loral Satellite Contract (or an
earlier date if Lehman makes available to us the loans under, or we elect to
terminate, the Lehman Term Loan Facility). We expect these warrants to be
released from escrow and become exercisable by Lehman when the loans under the
Lehman Term Loan Facility are made available to us. If, however, we exercise our
option to extend Lehman's commitment to make the loans under the Lehman Term
Loan Facility, the First Tranche Warrants will be released and become
exercisable by Lehman; or, if we terminate the Lehman Term Loan Facility on or
prior to November 30, 2000, the First Tranche Warrants and one third of the
Second Tranche Warrants will be released and become exercisable by Lehman.
Shares of our 9.2% Series A Junior Cumulative Convertible Preferred
Stock and 9.2% Series B Junior Cumulative Convertible Preferred Stock are
convertible into shares of our Common Stock at a price of $30.00 per share.
Shares of our 9.2% Series A Junior Cumulative Convertible Preferred Stock and
9.2% Series B Junior Cumulative Convertible Preferred Stock are callable by us
beginning November 15, 2001 at a price of 100% if the current market price, as
defined in the Certificate of Designation of the 9.2% Series A Junior Cumulative
Convertible Preferred Stock and 9.2% Series B Junior Cumulative Convertible
Preferred Stock, of our Common Stock exceeds $60.00 per share for a period of 20
consecutive trading days, will be callable in all events beginning November 15,
2003 at a price of 100% and must be redeemed by us on November 15, 2011.
Dividends on our 9.2% Series A Junior Cumulative Convertible Preferred Stock and
9.2% Series B Junior Cumulative Convertible Preferred Stock are payable in kind
or in cash annually, at our option. Holders of our 9.2% Series A Junior
Cumulative Convertible Preferred Stock and 9.2% Series B Junior Cumulative
Convertible Preferred Stock have the right to vote, on an as-converted basis, on
matters in which the holders of our Common Stock have the right to vote.
Shares of our 9.2% Series D Junior Cumulative Convertible Preferred
Stock are convertible into shares of our Common Stock at a price of $34.00 per
share. Shares of our 9.2% Series D Junior Cumulative Convertible Preferred Stock
are callable by us beginning December 23, 2002 at a price of 100% if the current
market price, as defined in the Certificate of Designation of the 9.2% Series D
Junior Cumulative Convertible Preferred Stock, of our Common Stock exceeds
$68.00 per share for a period of 20 consecutive trading days, will be callable
in all events beginning December 23, 2004 at a price of 100% and must be
redeemed by us on November 15, 2011. Dividends on our 9.2% Series D Junior
Cumulative Convertible Preferred Stock are payable in kind or in cash annually,
at our option. Holders of our 9.2% Series D Junior Cumulative Convertible
11
Preferred Stock have the right to vote, on an as-converted basis, on matters in
which the holders of our Common Stock have the right to vote.
On March 3, 2000, we notified the holders of our 10 1/2% Series C
Convertible Preferred Stock and the holders of all outstanding warrants to
purchase shares of our 10 1/2% Series C Convertible Preferred Stock that on
April 12, 2000 we would redeem these securities. As of April 12, 2000, all of
the outstanding warrants to purchase shares of our 10 1/2% Series C Convertible
Preferred Stock had been exercised and all of the outstanding shares of our
10 1/2% Series C Convertible Preferred Stock (including those shares received
upon the exercise of such warrants) had been converted into shares of our
Common Stock.
12
Part II
Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
See Exhibit Index attached hereto.
(b) Reports on Form 8-K:
None.
13
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
SIRIUS SATELLITE RADIO INC.
By: /s/ Edward Weber, Jr.
---------------------------
Edward Weber, Jr.
Vice President and Controller
(Principal Accounting Officer)
August 14, 2000
14
EXHIBIT INDEX
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EXHIBIT DESCRIPTION
- ------- -----------
3.1.1 Certificate of Amendment, dated June 16, 1997, to the
Company's Certificate of Incorporation and the Company's
Amended and Restated Certificate of Incorporation, dated
January 31, 1994 (incorporated by reference to Exhibit 3.1 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999).
3.1.2 Certificate of Ownership and Merger merging Sirius Satellite
Radio Inc. into CD Radio Inc. dated November 18, 1999
(incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-8 (File No. 333-31362)).
3.2 Amended and Restated By-Laws (incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on Form
S-1 (File No. 33-74782) (the "S-1 Registration Statement")).
3.3 Certificate of Designations of 5% Delayed Convertible
Preferred Stock (incorporated by reference to Exhibit 10.24
to the Company's Annual Report on Form 10-K/A for the year
ended December 31, 1996 (the "1996 Form 10-K")).
3.4 Form of Certificate of Designations of Series B Preferred
Stock (incorporated by reference to Exhibit A to Exhibit 1 to
the Company's Registration Statement on Form 8-A filed on
October 30, 1997 (the "Form 8-A")).
3.5.1 Form of Certificate of Designations, Preferences and
Relative, Participating, Optional and Other Special Rights of
10 1/2% Series C Convertible Preferred Stock (the "Series C
Certificate of Designations") (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on Form
S-4 (File No. 333-34761)).
3.5.2 Certificate of Correction to Series C Certificate of
Designations (incorporated by reference to Exhibit 3.5.2 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1997 (the "1997 Form 10-K")).
3.5.3 Certificate of Increase of 10 1/2% Series C Convertible
Preferred Stock (incorporated by reference to Exhibit 3.5.3
to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998).
3.6 Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of the
Company's 9.2% Series A Junior Cumulative Convertible
Preferred Stock (incorporated by reference to Exhibit 3.6 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999).
3.7 Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of the
Company's 9.2% Series B Junior Cumulative Convertible
Preferred Stock (incorporated by reference to Exhibit 3.7 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999).
EXHIBIT DESCRIPTION
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3.8 Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of the
Company's 9.2% Series D Junior Cumulative Convertible
Preferred Stock (incorporated by reference to Exhibit 99.2 to
the Company's Current Report on Form 8-K filed on December
29, 1999).
4.1 Form of Certificate for shares of Common Stock (incorporated
by reference to Exhibit 4.3 to the S-1 Registration
Statement).
4.2 Form of Certificate for shares of 10 1/2% Series C
Convertible Preferred Stock (incorporated by reference to
Exhibit 4.4 to the Company's Registration Statement on Form
S-4 (File No. 333-34761)).
4.3 Form of Certificate for shares of 9.2% Series A Junior
Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 4.10.1 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1998 (the "1998
Form 10-K")).
4.4 Form of Certificate for shares of 9.2% Series B Junior
Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 4.10.2 to the 1998 Form 10-K).
4.5 Form of Certificate for shares of 9.2% Series D Junior
Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 4.5 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1999 (1999 Form
10-K).
4.6.1 Rights Agreement, dated as of October 22, 1997 (the "Rights
Agreement"), between the Company and Continental Stock
Transfer & Trust Company, as rights agent (incorporated by
reference to Exhibit 1 to the Form 8-A).
4.6.2 Form of Right Certificate (incorporated by reference to
Exhibit B to Exhibit 1 to the Form 8-A).
4.6.3 Amendment to the Rights Agreement dated as of October 13,
1998 (incorporated by reference to Exhibit 99.2 to the
Company's Current Report on Form 8-K dated October 13, 1998).
4.6.4 Amendment to the Rights Agreement dated as of November 13,
1998 (incorporated by reference to Exhibit 99.7 to the
Company's Current Report on Form 8-K dated November 17,
1998).
4.6.5 Amended and Restated Amendment to the Rights Agreement dated
as of December 22, 1998 (incorporated by reference to Exhibit
6 to the Amendment No. 1 to the Form 8-A filed on January 6,
1999).
4.6.6 Amendment to the Rights Agreement dated as of June 11, 1999
(incorporated by reference to Exhibit 4.1.8 to the Company's
Registration Statement on Form S-4 (File No. 333-82303) filed
on July 2, 1999 (the "1999 Units Registration Statement")).
2
EXHIBIT DESCRIPTION
- ------- -----------
4.6.7 Amendment to the Rights Agreement dated as of September 29,
1999 (incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K filed on October 13,
1999).
4.6.8 Amendment to the Rights Agreement dated as of December 23,
1999 (incorporated by reference to Exhibit 99.4 to the
Company's Current Report on Form 8-K filed on December 29,
1999).
4.6.9 Amendment to the Rights Agreement dated as of January 28,
2000 (incorporated by reference to Exhibit 4.6.9 to the 1999
Form 10-K).
4.7 Indenture, dated as of November 26, 1997, between the Company
and IBJ Schroder Bank & Trust Company, as trustee, relating
to the Company's 15% Senior Secured Notes due 2007
(incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-3 (File No. 333-34769) (the
"1997 Units Registration Statement")).
4.8 Form of 15% Senior Secured Note due 2007 (incorporated by
reference to Exhibit 4.2 to the 1997 Units Registration
Statement).
4.9 Warrant Agreement, dated as of November 26, 1997, between the
Company and IBJ Schroder Bank & Trust Company, as warrant
agent (incorporated by reference to Exhibit 4.3 to the 1997
Units Registration Statement).
4.10 Form of Warrant (incorporated by reference to Exhibit 4.4 to
the 1997 Units Registration Statement).
4.11 Form of Preferred Stock Warrant Agreement, dated as of
April 9, 1997, between the Company and each warrantholder
thereof (incorporated by reference to Exhibit 4.12 to the
1997 Form 10-K).
4.12 Form of Common Stock Purchase Warrant granted by the Company
to Everest Capital Master Fund, L.P. and to The Ravich
Revocable Trust of 1989 (incorporated by reference to Exhibit
4.11 to the 1997 Form 10-K).
4.13 Indenture, dated as of May 15, 1999, between the Company and
United States Trust Company of New York, as trustee, relating
to the Company's 14 1/2% Senior Secured Notes due 2009
(incorporated by reference to Exhibit 4.4.2 to the 1999 Units
Registration Statement).
4.14 Form of 14 1/2% Senior Secured Notes due 2009 (incorporated by
reference to Exhibit 4.4.2 to the 1999 Units Registration
Statement).
4.15 Indenture, dated as of September 29, 1999, between the
Company and United States Trust Company of Texas, N.A.,
relating to the Company's 8 3/4% Convertible Subordinated
Notes due 2009 (incorporated by reference to Exhibit 4.2 to
the Company's Current Report on Form 8-K filed on October 13,
1999).
3
EXHIBIT DESCRIPTION
- ------- -----------
4.16 First Supplemental Indenture, dated as of September 29, 1999,
between the Company and United States Trust Company of Texas,
N.A., relating to the Company's 8 3/4% Convertible
Subordinated Notes due 2009 (incorporated by reference to
Exhibit 4.1 to the Company's Current Report on Form 8-K filed
on October 1, 1999).
4.17 Form of 8 3/4% Convertible Subordinated Notes due 2009
(incorporated by reference to Article VII of Exhibit 4.01 to
the Company's Current Report on Form 8-K filed on October 11,
1999).
4.18 Warrant Agreement, dated as of May 15, 1999, between the
Company and United States Trust Company of New York, as
warrant agent (incorporated by reference to Exhibit 4.4.4 to
the 1999 Units Registration Statement).
4.19 Amended and Restated Pledge Agreement, dated as of May 15,
1999, among the Company, as pledgor, IBJ Whitehall Bank &
Trust Company, as trustee, United States Trust Company of New
York, as trustee, and IBJ Whitehall Bank & Trust Company, as
collateral agent (incorporated by reference to Exhibit 4.4.5
to the 1999 Units Registration Statement).
4.20 Collateral Pledge and Security Agreement, dated as of May 15,
1999, between the Company, as pledgor, and United States
Trust Company of New York, as trustee (incorporated by
reference to Exhibit 4.4.6 to the 1999 Units Registration
Statement).
4.21 Intercreditor Agreement, dated May 15, 1999, by and between
IBJ Whitehall Bank & Trust Company, as trustee, and United
States Trust Company of New York, as trustee (incorporated by
reference to Exhibit 4.4.7 to the 1999 Units Registration
Statement).
4.22 Term Loan Agreement, dated as of June 1, 2000, among the
Company, Lehman Brothers Inc., as arranger, Lehman Commercial
Paper Inc., as syndication agent, and Lehman Commercial Paper
Inc., as administrative agent (filed herewith).
4.23 Warrant Agreement, dated as of June 1, 2000, between the
Company and United States Trust Company of New York, as
warrant agent and escrow agent (filed herewith).
4.24 Common Stock Purchase Warrant granted by the Company to Ford
Motor Company, dated June 11, 1999 (incorporated by reference
to Exhibit 4.4.2 to the 1999 Units Registration Statement).
4.25 Common Stock Purchase Warrant granted by the Company to
DaimlerChrysler Corporation, dated January 28, 2000
(incorporated by reference to Exhibit 4.23 to the 1999 Form
10-K).
9.1 Voting Trust Agreement, dated as of August 26, 1997, by and
among Darlene Friedland, as Grantor, David Margolese, as
Trustee, and the Company (incorporated by reference to
Exhibit (c) to the Company's Issuer Tender Offer Statement on
Form 13E-4 filed on October 16, 1997).
4
EXHIBIT DESCRIPTION
- ------- -----------
10.1.1 Lease Agreement, dated as of March 31, 1998, between
Rock-McGraw, Inc. and the Company (incorporated by reference
to Exhibit 10.1.2 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1998).
10.1.2 Supplemental Indenture, dated as of March 22, 2000, between
Rock-McGraw, Inc. and the Company (incorporated by reference
to Exhibit 10.1.2 to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 2000).
'D'10.2 Amended and Restated Contract, dated as of June 30, 1998,
between the Company and Space Systems/Loral, Inc.
(incorporated by reference to Exhibit 10.4 to the Company's
Quarterly Report on Form 10-Q/A for the quarter ended June
30, 1998).
*10.3 Employment Agreement, dated as of January 1, 1999, between
the Company and David Margolese (incorporated by reference to
Exhibit 10.6 to the 1998 Form 10-K).
*10.4 Employment Agreement, dated as of December 31, 1999, between
the Company and Robert D. Briskman (incorporated by reference
to Exhibit 10.4 to the 1999 Form 10-K).
*10.5 Employment Agreement, dated as of March 28, 2000, between the
Company and Joseph S. Capobianco (incorporated by reference
to Exhibit 10.5 to the 1999 Form 10-K).
*10.6 Employment Agreement, dated as of March 28, 2000, between the
Company and Patrick L. Donnelly (incorporated by reference to
Exhibit 10.6 to the 1999 Form 10-K).
*10.7 Employment Agreement, dated as of March 28, 2000, between the
Company and Ira H. Bahr (incorporated by reference to Exhibit
10.7 to the 1999 Form 10-K).
*10.8 Employment Agreement, dated as of April 17, 2000, between the
Company and Dr. Mircho Davidov (incorporated by reference to
Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 2000).
10.9 Registration Agreement, dated January 2, 1994, between the
Company and M.A. Rothblatt and B.A. Rothblatt (incorporated
by reference to Exhibit 10.20 to the S-1 Registration
Statement).
*10.10 1994 Stock Option Plan (incorporated by reference to Exhibit
10.21 to the S-1 Registration Statement).
*10.11 Amended and Restated 1994 Directors' Nonqualified Stock
Option Plan (incorporated by reference to Exhibit 10.22 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1995).
*10.12 CD Radio Inc. 401(k) Savings Plan (incorporated by reference
to Exhibit 4.4 to the Company's Registration Statement on
Form S-8 (File No. 333-65473)).
5
EXHIBIT DESCRIPTION
- ------- -----------
*10.13 Sirius Satellite Radio 1999 Long-Term Stock Incentive Plan
(incorporated by reference to Exhibit 4.4 of the Company's
Registration Statement on Form S-8 (File No. 333-31362)).
10.14 Form of Option Agreement, dated as of December 29, 1997,
between the Company and each Optionee (incorporated by
reference to Exhibit 10.16.2 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
10.15.1 Preferred Stock Investment Agreement, dated October 23, 1996,
between the Company and certain investors (incorporated by
reference to Exhibit 10.24 to the 1996 Form 10-K).
*10.13 Sirius Satellite Radio 1999 Long-Term Stock Incentive Plan
(incorporated by reference to Exhibit 4.4 of the Company's
Registration Statement on Form S-8 (File No. 333-31362)).
10.14 Form of Option Agreement, dated as of December 29, 1997,
between the Company and each Optionee (incorporated by
reference to Exhibit 10.16.2 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
10.15.1 Preferred Stock Investment Agreement, dated October 23, 1996,
between the Company and certain investors (incorporated by
reference to Exhibit 10.24 to the 1996 Form 10-K).
10.15.2 First Amendment to Preferred Stock Investment Agreement,
dated March 7, 1997, between the Company and certain
investors (incorporated by reference to Exhibit 10.24.1 to
the 1996 Form 10-K).
10.15.3 Second Amendment to Preferred Stock Investment Agreement,
dated March 14, 1997, between the Company and certain
investors (incorporated by reference to Exhibit 10.24.2 to
the 1996 Form 10-K).
10.16 Letter, dated May 29, 1998, terminating Launch Services
Agreement dated July 22, 1997 between the Company and
Arianespace S.A.; Arianespace Customer Loan Agreements dated
July 22, 1997 for Launches #1 and #2 between the Company and
Arianespace Finance S.A.; and the Multiparty Agreements dated
July 22, 1997 for Launches #1 and #2 among the Company,
Arianespace S.A. and Arianespace Finance S.A. (incorporated
by reference to Exhibit 10.21 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
10.17 Summary Term Sheet/Commitment, dated June 15, 1997, among the
Company and Everest Capital International, Ltd., Everest
Capital Fund, L.P. and The Ravich Revocable Trust of 1989
(incorporated by reference to Exhibit 99.1 to the Company's
Current Report on Form 8-K filed on July 8, 1997).
10.18.1 Engagement Letter Agreement, dated June 14, 1997, between the
Company and Libra Investments, Inc. (incorporated by
reference to Exhibit 10.26.1 to the 1997 Form 10-K).
10.18.2 Engagement Letter Agreement, dated August 6, 1997, between
the Company and Libra Investments, Inc. (incorporated by
reference to Exhibit 10.26.2 to the 1997 Form 10-K).
10.19 Radio License Agreement, dated January 21, 1998, between the
Company and Bloomberg Communications Inc. (incorporated by
reference to Exhibit 10.28 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1998).
'D'10.20 Amended and Restated Agreement, dated as of February 1, 1999,
between Lucent Technologies Inc. and the Company
(incorporated by reference to Exhibit 99.1 to the Company's
Current Report on Form 8-K filed on February 4, 1999).
10.21 Stock Purchase Agreement, dated as of August 5, 1997, between
the Company, David Margolese and Loral Space & Communications
Ltd. (incorporated by
6
EXHIBIT DESCRIPTION
- ------- -----------
reference to Exhibit 99.1 to the Company's Current Report on
Form 8-K filed on August 19, 1997).
10.22 Stock Purchase Agreement, dated as of October 8, 1998,
between the Company and Prime 66 Partners, L.P. (incorporated
by reference to Exhibit 99.1 to the Company's Current Report
on Form 8-K dated October 8, 1998).
10.23.1 Stock Purchase Agreement, dated as of November 13, 1998 (the
"Apollo Stock Purchase Agreement"), by and among the Company,
Apollo Investment Fund IV, L.P. and Apollo Overseas Partners
IV, L.P. (incorporated by reference to Exhibit 99.1 to the
Company's Current Report on Form 8-K dated November 17,
1998).
10.23.2 Amendment No. 1, dated as of December 23, 1998, to the Apollo
Stock Purchase Agreement (incorporated by reference to
Exhibit 10.28.2 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1999).
10.23.3 Second Amendment, dated as of December 23, 1999, to the
Apollo Stock Purchase Agreement (incorporated by reference to
Exhibit 99.3 to the Company's Current Report on Form 8-K
filed on December 29, 1999).
10.24 Stock Purchase Agreement, dated as of December 23, 1999 (the
"Blackstone Stock Purchase Agreement"), by and between the
Company and Blackstone Capital Partners III Merchant Banking
Fund L.P. (incorporated by reference to Exhibit 99.1 to the
Company's Current Report on Form 8-K filed on December 29,
1999).
10.25 Stock Purchase Agreement, dated as of January 28, 2000, among
the Company, Mercedes-Benz USA, Inc., Freightliner
Corporation and DaimlerChrysler Corporation (incorporated by
reference to Exhibit 10.24 to the 1999 Form 10-K).
10.27 Tag-Along Agreement, dated as of November 13, 1998, by and
among Apollo Investment Fund IV, L.P., Apollo Overseas
Partners IV, L.P., the Company and David Margolese
(incorporated by reference to Exhibit 99.6 to the Company's
Current Report on Form 8-K dated November 17, 1998).
'D'10.27 Agreement, dated as of June 11, 1999, between the Company and
Ford Motor Company (incorporated by reference to Exhibit
10.33 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999).
'D'10.28 Joint Development Agreement, dated as of February 16, 2000,
between the Company and XM Satellite Radio, Inc. (incorporated
by reference to Exhibit 10.28 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2000).
27.1 Financial Data Schedule (filed herewith).
- -----------------
* This document has been identified as a management contract or
compensatory plan or arrangement.
7
'D' Portions of these exhibits have been omitted pursuant to Applications
for Confidential treatment filed by the Company with the Securities and
Exchange Commission.
8
STATEMENT OF DIFFERENCES
The dagger symbol shall be expressed as......................................'D'
The section symbol shall be expressed as................................. 'SS'