Sirius XM’s most notorious DJ Howard Stern is suing his employers over an alleged failure by the satellite radio broadcaster to pay him and his agent Don Buchwald performance-related stock bonus awards.
Via his production company One Twelve Inc, Stern…
Sirius XM’s most notorious DJ Howard Stern is suing his employers over an alleged failure by the satellite radio broadcaster to pay him and his agent Don Buchwald performance-related stock bonus awards.
Via his production company One Twelve Inc, Stern filed a lawsuit with the Supreme Court of the State of New York on 22 March claiming that under the terms of his original contract with Sirius, which was signed in January 2006 more than two years prior to its merger to XM, he was entitled to stock awards if the company exceeded certain annual subscriber targets. His agent would then receive 10% of One Twelve’s bonus.
In response, Sirius XM denied the claims pointing out that the awards were not made beyond the initial award in 2006 because the company did not include the addition of the XM subscribers following the merger.
Sirius signed up Stern to a hugely lucrative five-year contract in late 2004 with his first show starting in January 2006. On his first day, Sirius issued One Twelve with 34.3 million common shares for the company exceeding subscriber targets set in the original contract of 2004. One Twelve then received a second stock award in January 2007 of 22 millions shares.
Late last year Stern signed a new five year deal with Sirius XM, the terms of which were not disclosed.
Sirius launches tender offer for convertible notes
Sirius XM has launched a tender offer to repurchase any or all of its 3.25% convertible notes due October 2011.
As of 24 March 2011 the company had approximately US$97.8m outstanding of the US$230m of the convertible notes. Sirius XM partially repaid a portion of the debt last year.
Sirius XM is offering noteholders US$1007.5 per US$1000 of notes validly tendered. The offer period is due to expire on 20 April The dealer manager for the tender offer is Morgan Stanley.
The move is part of Sirius XM’s ongoing strategy to extinguish a large portion of its debt and subsequently reduce its leverage. In its full year 2010 results, the company had approximately US$3.3bn of net debt and a debt leverage ratio of 4.2x. The company’s long term strategy is to reduce its leverage to around 3 times.
Sirius XM issued US$1.5bn in unsecured debt in 2010, the majority of which was used to repay exiting debt including its senior secured term loan due 2012, 9.625% senior notes due 2013, XM’s 10% senior PIK secured notes due 2011 and 9.75% senior notes due 2014, as well as the partial repayment of XM’s 11.25% senior secured notes due 2013.
