NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY,TUESDAY, MAY 25, 200523, 2006

To our Stockholders:

      You are cordially invited to attend our Annual Meeting of Stockholders, which will be held on Wednesday,Tuesday, May 25, 2005,23, 2006, at 9:00 a.m., New York City time, in The Auditorium at The Equitable Center, 787 Seventh Avenue, New York, New York 10019. The annual meeting is being held to:

      1. Elect eight directors.

      2. Transact any other business that may properly come before the meeting.

      Only stockholders of record at the close of business on April 4, 20053, 2006 are entitled to vote at the annual meeting. A list of stockholders entitled to vote will be available for examination for the ten days prior to the annual meeting, between the hours of 9:00 a.m. and 4:00 p.m., New York City time, at our offices at 1221 Avenue of the Americas, 36th Floor, New York, New York 10020.

      Whether or not you expect to attend in person, we urge you to vote your shares via the Internet, by phone, or by signing, dating, and returning the enclosed proxy card at your earliest convenience. This will ensure the presence of a quorum at the meeting. If you wish to vote your shares by mail, an addressed envelope for which no postage is required if mailed in the United States is enclosed.

      Voting over the Internet or by telephone is fast, convenient, and your vote is immediately confirmed and tabulated. Most important, by using the Internet or telephone, you help us reduce postage and proxy tabulation costs. Please do not return the enclosed paper ballot if you are voting over the Internet or by telephone.

If You Plan to Attend

      Please note that space limitations make it necessary to limit attendance to stockholders. Admission to the meeting will be on a first-come, first-served basis. Stockholders holding stock in brokerage accounts (“street name” holders) will need to bring a copy of a brokerage statement reflecting stock ownership as of the record date to enter the meeting. Cameras, recording devices and other electronic equipment will not be permitted in the meeting.

	By Order of the Board of Directors,
	PATRICK L. DONNELLY Executive Vice President, General Counsel and Secretary

New York, New York
April 20, 200521, 2006

TABLE OF CONTENTS

SIRIUS SATELLITE RADIO INC.

PROXY STATEMENT

      This proxy statement contains information related to the annual meeting of stockholders of Sirius Satellite Radio Inc. to be held on Wednesday,Tuesday, May 25, 2005,23, 2006, beginning at 9:00 a.m., New York City time, in The Auditorium at The Equitable Center, 787 Seventh Avenue, New York, New York 10019, and at any postponements or adjournments thereof. This proxy statement is being mailed to stockholders on or about April 20, 2005.21, 2006.

      A copy of our Annual Report on Form 10-K for the year ended December 31, 20042005 as filed with the Securities and Exchange Commission, except for exhibits, will be furnished without charge to any stockholder upon written request to Sirius Satellite Radio Inc., Attention: Corporate Secretary, 1221 Avenue of the Americas, 36th Floor, New York, New York 10020.

ABOUT THE MEETING

What is the purpose of the annual meeting?

      At our annual meeting, stockholders will elect eight directors to our board (Leon D. Black, Joseph P. Clayton, Lawrence F. Gilberti, James P. Holden, Mel Karmazin, Warren N. Lieberfarb, Michael J. McGuiness and James F. Mooney). In addition, management will report on its 2005 performance and respond to questions from stockholders.

Who is entitled to vote?

      Only stockholders of record at the close of business on April 4, 2005,3, 2006, the record date for the meeting, are entitled to receive notice of and to participate at the annual meeting. If you were a stockholder of record on that date, you will be entitled to vote all of the shares that you held on that date at the meeting, or any postponements or adjournments of the meeting.

What are the voting rights of the holders of SIRIUS common stock?

      Each outstanding share of our common stock is entitled to one vote on each matter considered at the meeting.

Who can attend the annual meeting?

      Subject to space availability, all stockholders as of the record date, or their duly appointed proxies, may attend the meeting. Since seating is limited, admission to the meeting will be on a first-come, first-served basis. Registration will begin at 8:15 a.m., New York City time, and seating will begin at 8:30 a.m., New York City time.

      If you are a registered stockholder (that is, if you hold your stock in certificate form or participate in the Sirius Satellite Radio Inc. 401(k) Savings Plan), an admission ticket is enclosed with your proxy card. If you wish to attend the annual meeting, please vote your proxy but keep the admission ticket and bring it with you to the annual meeting.

      If your shares are held in “street name” (that is, through a bank, broker or other holder of record) and you wish to attend the annual meeting, you need to bring a copy of a bank or brokerage statement to the annual meeting reflecting your stock ownership as of the record date.

What constitutes a quorum?

      The presence at the meeting, in person or by proxy, of the holders of a majority of the aggregate voting power of the common stock outstanding on the record date will constitute a quorum, permitting the meeting to conduct its business. As of the record date, 1,320,497,5511,401,867,483 shares of our common stock were outstanding.

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      Proxies received but marked as abstentions or broker non-votes will be included in the calculation of the number of votes considered to be present at the meeting.

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How do I vote?

      Stockholders of record can vote as follows:

      If your shares are held in “street name”, through a broker, bank or other nominee, that institution will send you separate instructions describing the procedure for voting your shares. “Street name” stockholders who wish to vote at the meeting will need to obtain a proxy form from the institution that holds their shares.

Can I vote by telephone or electronically?

      If your shares are held in “street name”, please check your proxy card or contact your broker or nominee to determine whether you will be able to vote by telephone or electronically. The deadline for voting by telephone or electronically is 5:00 p.m., New York City time, on Monday, May 24, 2005.22, 2006.

      If you are a registered stockholder (that is, if you hold your stock in certificate form or participate in the Sirius Satellite Radio Inc. 401(k) Savings Plan), you may vote by telephone (1-866-353-7844), or electronically through the Internet at www.proxyvotenow.com/siri, by following the instructions included with your proxy card.

How can I access the proxy materials and annual report on the Internet?

      This proxy statement and our annual report are available on our website at www.sirius.com. Instead of receiving future copies of our proxy statement and annual report materials by mail, most stockholders can elect to receive an e-mail that will provide electronic links to them. Opting to receive your proxy materials online will save us the cost of producing and mailing documents to you and will also give you an electronic link to the proxy voting site.

      Registered Stockholders: If you vote on the Internet at www.proxyvotenow.com/siri simply follow the prompts for enrolling in the electronic proxy delivery service. You also may enroll in the electronic proxy delivery service at any time in the future by going directly to www.giveconsent.com/siri and following the enrollment instructions.

      Beneficial Owners: If your shares are held in “street name”, through a broker, bank or other nominee, you also may have the opportunity to receive copies of these documents electronically. Please check the information provided in the proxy materials mailed to you by your bank or other holder of record regarding the availability of this service.

Can I change my vote?

      Yes. You may change your vote at any time before your shares are voted at the annual meeting by:

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	•	Notifying our Corporate Secretary, Patrick L. Donnelly, in writing at Sirius Satellite Radio Inc., 1221 Avenue of the Americas, 36th Floor, New York, New York 10020 that you are revoking your proxy; or
	•	Executing and delivering a later dated proxy card; or
	•	Voting in person at the annual meeting.

      However, if you have shares held through a brokerage firm, bank or other custodian, you may revoke your instructions only by informing the custodian in accordance with any procedures it has established.

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What vote is required to approve each item?elect directors?

      The affirmative vote of a plurality of the votes cast at the meeting is required for the election of directors. A properly executed proxy marked “Withhold Authority” with respect to the election of one or more directors will not be voted with respect to the director or directors indicated, although it will be counted for purposes of determining whether there is a quorum.

Who will count the votes?

      A representative of The Bank of New York, our transfer agent, will tabulate the votes and act as inspector of election.

What is a proxy?

      A proxy is a person you appoint to vote on your behalf. We are soliciting your vote so that all shares of our common stock may be voted at the annual meeting.

Who am I designating as my proxy?

      You will be designating Patrick L. Donnelly, our Executive Vice President, General Counsel and Secretary, and Ruth A. Ziegler, our Deputy General Counsel, as your proxies.

How will my proxy vote my shares?

      Your proxy will vote according to your instructions. If you complete your proxy card but do not indicate your vote on one or all of the business matters, your proxy will vote “FOR” these items. Also, your proxy is authorized to vote on any other business that properly comes before the annual meeting in accordance with the recommendation of our board of directors.

What happens if a nominee for director is unable to serve as a director?

      If any of the nominees becomes unavailable for election, which we do not expect, votes will be cast for such substitute nominee or nominees as may be designated by our board of directors, unless our board of directors reduces the number of directors on our board.

Who is soliciting my proxy, and who will pay the costs of the solicitation?

      SIRIUS is soliciting your proxy. The cost of soliciting proxies will be borne by SIRIUS, which has engaged MacKenzie Partners, Inc. to assist in the distribution and solicitation of proxies. We have agreed to pay MacKenzie $10,000 plus reimburse the firm for its reasonable out-of-pocket expenses. SIRIUS will also reimburse brokerage firms, banks and other custodians for their reasonable out-of-pocket expenses for forwarding these proxy materials to you. Our directors, officers and employees may solicit proxies on our behalf by telephone or in writing.

When, and how, do I submit a proposal for next year's annual meeting of stockholders?

      To be eligible for inclusion in our proxy statement and form of proxy for next year's annual meeting, stockholder proposals must be submitted in writing by the close of business on December 15, 20052006 to Patrick L. Donnelly, Executive Vice President, General Counsel and Secretary, Sirius Satellite Radio Inc., 1221 Avenue of the Americas, 36th Floor, New York, New York 10020.

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      If any proposal that is not submitted for inclusion in next year's proxy statement (as described in the preceding paragraph) is instead sought to be presented directly at next year's annual meeting, the proxies may vote in their discretion if (a) we receive notice of the proposal before the close of business on February 28, 20062007 and advise stockholders in next year's proxy statement about the nature of the matter and how management intends to vote on such matter or (b) we do not receive notice of the proposal prior to the close of business on February 28, 2006.2007. Notices of intention to present proposals at next year's annual meeting should be addressed to Patrick L. Donnelly, Executive Vice President, General Counsel and Secretary, Sirius Satellite Radio Inc., 1221 Avenue of the Americas, 36th Floor, New York, New York 10020.

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STOCK OWNERSHIP

Who are the owners of the largest amount of SIRIUS' common stock?

      The following table sets forth information regarding beneficial ownership of our common stock as of February 28, 20052006 by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock. In general, “beneficial ownership” includes those shares a person has the power to vote or transfer, and options to acquire our common stock that are exercisable currently or become exercisable within 60 days. Except as otherwise indicated, weWe believe that the beneficial owners of the common stock listed below, based on information furnished by these owners, have sole investment and voting power with respect to these shares, except as otherwise provided by community property laws where applicable.shares.

How much stock do the directors and executive officers of SIRIUS own?

      The following table shows the number of shares of common stock beneficially owned by each of our directors, our Chief Executive Officer and the four other most highly compensated executive officers during 20042005 as of February 28, 2005.2006. The table also shows common stock beneficially owned by all of our directors and executive officers as a group as of February 28, 2005.2006.

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Section 16(a) Beneficial Ownership Reporting Compliance

      Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers to file reports of ownership of our common stock and changes in such ownership

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with the Securities and Exchange Commission, or the SEC. Based on our records and other information, we believe that our directors and executive officers met all applicable filing requirements during 2004,2005 and our directors, with the exception of one late report filing by Leon D. Black, Lawrence F. Gilberti, James P. Holden, Warren N. Lieberfarb, James F. Mooney who filed one late report regarding the acquisition of shares held as custodian for a child.and Michael J. McGuiness in connection with their director compensation award, met all 2005 applicable filing requirements.

GOVERNANCE OF THE COMPANY

What are the responsibilities of the board of directors?

      The business and affairs of SIRIUS are managed by or under the direction of our board of directors. Our board reviews and ratifies senior management selection and compensation, monitors overall corporate performance and ensures the integrity of our financial controls. Our board of directors also oversees our strategic and business planning processes.

What are the current committees of the board of directors and who are the members of these committees?

      Our board of directors maintains three standing committees, an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Our board of directors established the Nominating and Corporate Governance Committee in October 2005, and at the same time dissolved its Finance Committee.Committee after concluding that its functions could be discharged by the board of directors as a whole.

5A copy of the charters for the Audit Committee and the Nominating and Corporate Governance Committee are available on our website at www.sirius.com. A copy of the charter of the Nominating and Corporate Governance Committee is also attached as Appendix A to this proxy statement.

      The following table shows the current members and chairman of each committee, the number of committee meetings held during 20042005 and the principal functions performed by each committee:

* Chairman

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How often are directors elected to the board?

      All directors stand for election annually. Our board reaffirms its accountability to stockholders through this annual election process.

Does the board have a nominating or corporate governance committee?

      Our board of directors does not maintain a nominating or corporate governance committee. Given the small size ofIn October 2005, our board of directors established a Nominating and Corporate Governance Committee. This Committee is comprised of all independent directors. The Nominating and Corporate Governance Committee charter is attached as Appendix A to the directors have decided not to form either a nominating or corporate governance committee.proxy statement. A copy of the charter is also available on our website at www.sirius.com/pdf/corpgov.pdf.

How does the board selectare nominees for the board?board of directors selected?

      Our board of directors, as a whole,Nominating and Corporate Governance Committee reviews possible candidates for the board and is responsible for overseeing matters of corporate governance, including the evaluation of performance and practices of the board of directors, the board's committees, management succession plans and executive resources. The board of directorsNominating and Corporate Governance Committee considers suggestions from many sources, including stockholders, for possible directors. Such suggestions, together with appropriate biographical information, should be submitted to our Corporate Secretary, Sirius Satellite Radio Inc., 1221 Avenue of the Americas, 36th Floor, New York, New York 10020. Candidates who are suggested by our stockholders are evaluated by the board of directorsNominating and Corporate Governance Committee in the same manner as are other possible candidates. During 2004,2005, our board of directors did not retain any third parties to assist in the process of identifying and evaluating potential nominees for our board of directors.

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Who is the board's chairman?

      In November 2004, the board elected Joseph P. Clayton to serveserves as chairman of our board of directors. The chairman of our board organizes the work of the board and ensures that the board has access to sufficient information to enable the board to carry out its functions, including monitoring the company's performance and the performance of management. In carrying out this role, the chairman, among other things, presides over meetings of the board of directors, establishes the agendas of each meeting of the board in consultation with our Chief Executive Officer, and oversees the distribution of information to directors.

How does the board determine which directors are considered independent?

      Our board reviews the independence of our directors annually based on answersannually. The provisions of our Corporate Governance Guidelines regarding director independence meet, and in some areas exceed, the directors provide on alisting standards of the NASDAQ National Market.

Pursuant to the Guidelines, the board undertook its annual review of director independence in April 2006. As part of this review, we reviewed written questionnaire.questionnaires submitted by each directors. The questionnaire isquestionnaires were designed to uncover transactions and relationships between each director and members of his immediate family and SIRIUS, other directors, members of our senior management and our affiliates. Under

As a result of this review, the Marketplace Rulesboard determined that all of the NASDAQ Stock Marketdirectors nominated for election at the annual meeting are independent of the company and Securities Exchange Act Rule 10A-3(b)(1)its management under the standards set forth in the Corporate Governance Guidelines, with the exception of Mel Karmazin and Joseph P. Clayton. Mr. Karmazin is considered an inside director because of his employment as our board has determined that only Messrs.Chief Executive Officer. Mr. Clayton and Karmazin do not qualifyis considered an inside director because of his prior employment as independent directors.a senior executive of the Company.

Who is the Audit Committee's financial expert?

      Our board of directors has determined that Mr. James F. Mooney, the chairman of the Audit Committee and a independent director, is qualified as an “audit committee financial expert” within the meaning of SEC regulations, and he has accounting and related financial management expertise within the meaning of the listing standards of the NASDAQ.

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How often did the board meet during 2004?2005?

      During the year ended December 31, 2004,2005, there were 12seven meetings of our board of directors, and the board took action once by written consent in lieu of a meeting. Each director attended more than 90% of the total number of meetings of the board and meetings held by committees on which he served. Directors are encouraged to attend the annual meeting of stockholders, but our board of directors does not have a formal policy with respect to attendance.stockholders. Messrs. Clayton, Gilberti and GilbertiKarmazin attended and participated in our 2004 annual meeting of stockholders.

How are the directors compensated?

      Each member of our board of directors who is not employed by us receives an annual retainer of $80,000 per year payable in the following manner:

      If any director fails to attend at least 75% of the meetings of the board of directors in any given year, he or she will forfeit 25% of his or her compensation that is payable in cash. During 2004,2005, all of our directors attended over 75%90% of the meetings of our board of directors.

      In addition to this annual retainer, eachEach director who serves as chair of a committee of the board of directors receives an additional payment of $20,000. These fees are payable in the form of cash, restricted stock units, options to purchase our common stock, or any combination thereof, at the election of the director.

      All options to purchase common stock awarded to our directors vest over a four-year period, and all restricted stock units awarded to our directors vest on the date that is one year following the director's resignation, retirement from the board of directors or failure to be re-elected for any reason whatsoever.

      We also pay reasonable travel and accommodation expenses of directors in connection with their participation in meetings of the board of directors.

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Does the chairman of the board of directors receive more compensation than other directors?

      On November 18, 2004, Joseph P. Clayton relinquished his role as our Chief Executive Officer and became chairman of our board of directors. On November 18, 2004, we granted Mr. Clayton options to purchase 2,000,000 shares of our common stock, at an exercise price of $4.72 per share, and 500,000 restricted stock units. Of these stock options, 500,000 vested immediately; 750,000 vested on December 31, 2005; and 750,000 stock options will vest on each of December 31, 2005 and December 31, 2006. Mr. Clayton's restricted stock units will vest in equal installmentsinstallments; 250,000 vested on January 1, 2006 and 250,000 will vest on January 1, 2007.

      Our board of directors has also authorized our Compensation Committee to negotiate further arrangements with Mr. Clayton in respect of his new role as chairman of our board of directors. As part of these arrangements, we expect to enter into an agreement with Mr. Clayton to, among other things:

      We also intend to accelerate the vesting of restrictedClayton's stock units which were held by Mr. Clayton on November 17, 2004 to January 2006, andoptions will replace the provisions in his stock option agreements that terminate the options ninety days after the end of his employment with a provision that will terminate such options three years after he ceases to be chairman of our board of directors. We expect to effect these modifications in a mutually acceptable manner, while preserving the intended economic benefits to

      Mr. Clayton remained an employee through June 30, 2005, and we paid him a salary of $300,000 in 2005. In February 2006, the Compensation Committee of our board of directors awarded Mr. Clayton a $300,000 cash bonus for his stock options without any increased costwork as an employee during 2005. In June 2005, when his employment with us ended, we paid Mr. Clayton $1,050,000 in severance. We are obligated to us.provide Mr. Clayton medical, dental, vision, and life insurance until the earlier of five years after his agreement expires or until he secures comparable coverage from a new employer. Through May 2005, we reimbursed Mr. Clayton for his reasonable living expenses in New York City, including rent. We also reimburse Mr. Clayton for his reasonable travel expenses between his home and New York City to the extent travel is required for the business of SIRIUS or our board of directors.

How can stockholders communicate with the board of directors?

      Stockholders may communicate directly with our board of directors, or specified individual directors, according to the procedures described on our website at www.sirius.com/aboutus/directors.directors.

      Our Corporate Secretary reviews all correspondence to our directors and forwards to the board a summary and/or copies of any such correspondence that, in the opinion of the Corporate Secretary, deals with the functions of the board or committees thereof or that he otherwise

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determines requires their attention. Directors may at any time review all correspondence received by us that is addressed to members of our board.

      In addition, the Audit Committee has established procedures for the receipt, retention and treatment, on a confidential basis, of complaints received by us, our board of directors and the Audit Committee regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters. These procedures are available upon request.

Does SIRIUS have corporate governance guidelines and a code of ethics?

      Our board of directors has adopted Corporate Governance Guidelines which set forth a codeflexible framework within which the board, assisted by its committees, directs the affairs of ethics,the company. The Guidelines cover, among other things, the composition and functions of our board of directors, director independence, management succession and review, committee assignments and selection of new members of our board of directors. A copy of the Guidelines are attached as Appendix B to this proxy statement.

Our board of directors has also adopted a Code of Ethics, which is applicable to all of our employees, including our principal executive officer, principal financial officer and principal accounting officer.

Our codeCode of ethicsEthics is available on the our website at www.sirius.com/aboutus/ethics. ethicsWe intend and in print to post any amendmentsstockholder who requests it from our Corporate Secretary. If we amend or waive the Code of Ethics with respect to our code of ethicschief executive officer, principal financial officer or principal accounting officer, we will post the amendment or waiver at this location on our website. Any person who wishes to receive a copy of our code of ethics, without charge, can send a letter addressed to our General Counsel at Sirius Satellite Radio Inc., 1221 Avenue of the Americas, 36th Floor, New York, New York 10020.

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REPORT OF THE AUDIT COMMITTEE

      The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent we specifically incorporate this Report by reference therein.

      The SEC rules require us to include in this proxy statement a report from the Audit Committee of our board of directors. The following report concerns the Audit Committee's activities regarding oversight of our financial reporting and auditing process.

      The Audit Committee is comprised solely of independent directors, as defined in the Marketplace Rules of the NASDAQ Stock Market and under Securities Exchange Act Rule 10A-3(b)(1), and it operates under a written charter (which is attached to this proxy statement as Appendix A) adopted by our board of directors. A copy of the Audit Committee's charter is available on our website at www.sirius.com/pdf/audit.pdf. The composition of the Audit Committee, the attributes of its members and the responsibilities of the Audit Committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. The Audit Committee reviews and assesses the adequacy of its charter on an annual basis.

      The Audit Committee met 11nine times during 2004.2005. The Audit Committee schedules its meetings with a view to ensuring that it devotes appropriate attention to all of its tasks. The Audit Committee's meetings include whenever appropriate,regular executive sessions with our independent registered public accounting firm, without the presence of our management. During 2004,2005, the Audit Committee devoted a substantial amount of time discussing and monitoring our efforts to comply with the requirements of the Sarbanes-Oxley Act of 2002. As part of that effort, the Audit Committee reviewed our key initiatives and programs aimed at strengthening the effectiveness of our internal and disclosure control structure.

      As described more fully in its charter, the purpose of the Audit Committee is to assist our board of directors in its general oversight of our financial reporting, internal control and audit functions. Management is responsible for the preparation, presentation and integrity of our consolidated financial statements; accounting and financial reporting principles; and internal controls and procedures designed to ensure compliance with accounting standards, applicable laws and regulations. Ernst & Young LLP, our independent registered public accounting firm, is responsible

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for performing an independent audit of our consolidated financial statements in accordance with auditing standards generally accepted in the United States.

      The Audit Committee members are not professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management and our independent registered public accounting firm, nor can the Audit Committee certify that our independent registered public accounting firm is “independent” under applicable rules. The Audit Committee serves a board-level oversight role, in which it provides advice, counsel and direction to management and our independent registered public accounting firm on the basis of the information it receives, its discussions with management and our independent registered public accounting firm and the experience of the Audit Committee's members in business, financial and accounting matters.

      Among other matters, the Audit Committee monitors the activities and performance of our independent registered public accounting firm, including the audit scope, external audit fees, auditor independence matters and the extent to which the independent registered public accounting firm may be retained to perform non-audit services. The Audit Committee and our board of directors have ultimate authority and responsibility to select, evaluate and, when appropriate, replace our independent registered public accounting firm. The Audit Committee also reviews the results of the audit work with regard to the adequacy and appropriateness of our financial, accounting and internal controls. The Audit Committee also covers various topics and events that may have significant financial impact or are the subject of discussions between management and the independent registered public accounting firm. In addition, the Audit Committee generally oversees our internal compliance programs.

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      The Audit Committee has reviewed and discussed our consolidated financial statements with management and our independent registered public accounting firm. Management represented to the Audit Committee that our consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles, and our independent registered public accounting firm represented that its presentations included the matters required to be discussed with the Audit Committee by Statement on Auditing Standards No. 61, as amended, “Communication with Audit Committees.”

      Ernst & Young LLP, our independent registered public accounting firm, also provided the Audit Committee with the written disclosures and the letter required by Independence Standards Board Standard No. 1, “Independence Discussions with Audit Committees,” and the Audit Committee discussed with Ernst & Young LLP the firm's independence.

      Following the Audit Committee's discussions with management and Ernst & Young LLP, the Audit Committee recommended that our board of directors include the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2004.2005.

Principal Accountant Fees and Services

      The following table sets forth the fees billed to us by Ernst & Young LLP, our independent registered public accounting firm, as of and for the years ended December 31, 20042005 and 2003:2004:

(footnotes from previous page)

Pre-Approval Policy for Services of Independent Auditor

      It is the Audit Committee's responsibility to review and consider, and ultimately pre-approve, all audit and permitted non-audit services to be performed by our independent registered public accounting firm. In accordance with its charter, the Audit Committee has established pre-approval policies with respect to audit and permitted non-audit services to be provided by our independent

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registered public accounting firm. The following sets forth the primary principles of the Audit Committee's pre-approval policies:

      The Audit Committee has delegated to the chairman of the Audit Committee the authority to approve permitted services by the independent registered public accounting firm so long as he reports decisions to the Audit Committee at its next meeting.

      The Audit Committee has appointed Ernst & Young LLP to audit our 20052006 consolidated financial statements. Representatives of the firm will be available at the annual meeting to make a statement, if they choose, and to answer any questions you may have.

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EXECUTIVE COMPENSATION

Report of the Compensation Committee

      The following Report of the Compensation Committee of our board of directors and the performance graph included elsewhere in this proxy statement do not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filings by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent we specifically incorporate this Report or the performance graph by reference therein.

      The Compensation Committee of our board of directors, comprised solely of independent directors, is responsible for overseeing and administering our compensation programs. The Compensation Committee consults with our Senior Vice President, Human Resources, and from time to time seeks the advice and input of, and competitive compensation data from, independent compensation consultants. The Compensation Committee also reviews, monitors and approves executive compensation, establishes compensation guidelines for our officers, reviews projected personnel needs and administers our long-term stock incentive plan.

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      We believe that the quality, skills and dedication of our executive officers are critical factors affecting the long-term value of our company. Our key compensation goals are to attract world-class executive talent; retain our key leaders; reward past performance; incent future performance; and align our executives' long-term interests with those of our stockholders.

      The Compensation Committee's decisions on executive officer compensation are based primarily upon the assessment of each executive's leadership and operational performance and potential to enhance long-term stockholder value. The Compensation Committee relies upon its judgment about each individual—and not on rigid formulas or short-term changes in business performance—in determining the amount and mix of compensation elements and whether each particular payment or award provides an appropriate incentive and reward for performance that sustains and enhances long-term stockholder value. Key factors affecting the Committee's judgment include: performance compared to the financial, operational and strategic goals established for the executive at the beginning of the year; nature, scope and level of responsibilities; contribution to our financial results, particularly with respect to key metrics such as subscribers, cash flow, revenue and subscriber acquisition costs; contribution to our commitment to corporate responsibility, including success in creating a culture of unyielding integrity and compliance with applicable laws and our ethics policies; and commitment to leadership and diversity.

      In making its decisions, the Compensation Committee considered each executive's current salary and prior-year bonus, the appropriate balance between incentives for long-term and short-term performance and the compensation paid to the executive's peers. In addition, the Compensation Committee reviewed a tally sheet setting forth the total compensation potentially payable to, and the benefits accruing to, the executive.

      The Compensation Committee did not consult with an executive compensation expert during 2005, and the Committee does not tie compensation decisions to any particular range or level of total compensation paid to executives at other companies.

      During 2004,2005, we hired aentered into new or amended employment agreements with James E. Meyer, our President, Sales and Operations; Scott A. Greenstein, our President, Sports and Entertainment; and David J. Frear, our Executive Vice President and Chief Financial Officer. A summary of these employment agreements and the employment agreements with Mel Karmazin, our Chief Executive Officer, and two presidents—a President, Entertainment and Sports, and a President, Sales and Operations. Members of the Compensation Committee participated in the process of interviewing and selecting these executive officers, and recommended to our board of directors approval of their compensation arrangements.

      During 2004, we also entered into a new employment agreement with Patrick L. Donnelly, our Executive Vice President, General Counsel and Secretary. A summary of this employment agreement and the employment agreements with our other executive officersSecretary, are described under the heading “Employment Agreements.”

   Compensation Philosophy

      Our compensation program in 20042005 for executive officers consisted of three key elements:

      The Compensation Committee believes that this three-part approach is consistent with programs adopted by similarly situated companies and best serves the interests of our stockholders. It enables us to meet the requirements of the competitive environment in which we operate, while ensuring that executive officers are compensated in a manner that advances both the short and long-term interests of stockholders. Under this approach, compensation for our executive officers involves a high proportion of pay that is “at risk”—namely, the annual bonus and the value and vesting of stock options and restricted stock units. Stock options and restricted stock units relate a significant portion of each executive's long-term remuneration directly to the stock price appreciation realized by our stockholders.

   Base Salaries

      The base salaries paid to each of our executive officers during 20042005 were paid pursuant to the written employment agreements described under the heading “Employment Agreements.”

      The base salaries paid to Messrs. Greenstein and Meyer were largely the product of negotiations between those executives and us. In evaluating the base salaries of Messrs. Greenstein and Meyer, the Compensation Committee was advised by Frederick W. Cook, Inc., independent compensation consultants.11

      The Compensation Committee approved base salary increases onin February 1, 20042005 for Mr. Donnelly our Executive Vice President, General Counsel and Secretary, from $345,000$358,800 to $358,800,$369,564, for Mr. Frear from $331,500 to $351,488, for Mr. Greenstein from $525,000 to $540,750, and for Mr. Frear, our Executive Vice President and Chief Financial Officer,Meyer from $325,000$525,000 to $331,500. No other executive officers received an increase in base salary during 2004.

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$540,750. These increases were made as part of our normal annual merit increase program and took into account the executives' contributions during 20032004 and their expected contributions in the future.

      In August 2005, the Compensation Committee approved base salary increases for Mr. Greenstein from $540,750 to $700,000 and Mr. Frear from $331,500 to $450,000. These increases were made as part of the review and renegotiation of employment agreements with Messrs. Greenstein and Frear.

Annual Bonus

      During 2004,2005, the Compensation Committee approved a bonus plan for executive officers and other employees. Under this program, employees were awarded bonuses based upon the attainment of prescribed levels of individual and corporate achievement, including subscriber activations, prepaid subscribers, product costsaverage monthly subscriber churn, cash flow and cash flow.automakers' models available for installation of SIRIUS radios. The Compensation Committee assigned each of these criteriathe objectives a weight, and measured the achievement of these items in January 20052006 based upon objective data certified by management. These criteria were established by the Compensation Committee after review of our business plan, and discussions with our management.

      In January 2005,February 2006, the Compensation Committee awarded an annual bonus to Mr. Clayton of $600,000, Mr. Greenstein of $400,000,$700,000, Mr. Meyer of $400,000,$800,000, Mr. Donnelly of $321,885,$400,000, and Mr. Frear of $297,862. The$450,000. These annual bonuses awarded to Messrs. Clayton, Donnelly and Frearbonus awards were determined in accordance with the criteria contained in our 20042005 bonus program. The Compensation Committee reviewedprogram and a subjective review of the performance of Messrs. Greenstein and Meyereach individual during the year and, based upon the recommendation of our Chief Executive Officer, increased their bonuses from the amount which would have been paid based upon the application of the formula contained in our 2004 bonus program. Half of theseyear. These bonuses were paid half in cash and half of these bonuses were paid in the form of restricted stock units. These restricted stock units will vest in February 2006. Mr. Karmazin was not awarded a bonus for his work in 2004 because he commenced his employment in late November 2004.2007.

      The Compensation Committee has approved performance goals applicable to our executive officers for the year ending December 31, 2005.2006. Our executive officers and eligible employees will be awarded bonuses based upon individual performance and the attainment of prescribed levels of corporate achievement, including subscriber activations average monthly subscriber churn,and cash flow and automakers' models available for installation of SIRIUS radios.flow. The Compensation Committee has assigned each of these criteria a weight and will measure the achievement of these items in January 20062007 based upon objective data. Executive officers and other eligible employees in certain operational divisions may also have to achieve additional objectives relevant to their specific areas of responsibility, such as programming or sales as well as individual objectives. Executive officers and eligible employees may receive cash bonuses and restricted stock units at different levels if we achieve threshold, standard or premier attainments as established by the Compensation Committee. The criteria of corporate achievement were established by the Compensation Committee after review of our business plan, and discussions with our management.

   Stock Options and Restricted Stock Units

      We provide long-term incentives through stock options and restricted stock units granted to our executive officers under our long-term stock incentive plan. The Compensation Committee believes that stock ownership by executives and other employees is the most effective method by which the interests of management may be aligned with those of our stockholders.

      In connection with the execution ofamendment to his employment agreement in May 2004,August 2005, Mr. Greenstein was awarded 2,800,0001,250,000 options to purchase our common stock at an exercise price of $3.14$6.60 per share and 1,575,000400,000 restricted stock units. Mr. Greenstein was also awarded 62,222 restricted stock units in recognition of meeting an equity accumulation requirement.

In connection with the execution of hisMarch 2005, we also entered into an amended employment agreement in May 2004,with Mr. Meyer. As part of this agreement, we accelerated the vesting of 450,000 stock options from April 15, 2007 to April 15, 2006 and accelerated the vesting of 317,000 restricted stock units from April 15, 2007 to April 15, 2006. Mr. Meyer was also awarded 2,800,000148,067 restricted stock units in 2005; 48,067 of these restricted stock units were awarded to Mr. Meyer in recognition of meeting an equity accumulation requirement.

      In August 2005, we entered into an amended employment agreement with Mr. Frear. Pursuant to this agreement, Mr. Frear was awarded 700,000 options to purchase our common stock at an exercise price of $3.14 per share$6.61 and 1,200,000300,000 restricted stock units. The terms and other conditions of these awards are described below under “Employment Agreements—Scott A. Greenstein” and “—James E. Meyer,” respectively.

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      The size and terms of each of these equity-based awards, particularly the vesting provisions, werewas the product of negotiations between Messrs. Greenstein, Meyer and MeyerFrear and the Compensation Committee. In general, the awards were designed to compensate Messrs. Greenstein, Meyer and Meyer forFrear based upon future performance and align their interests with our stockholders.performance. The Compensation Committee

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considered the size of the equity awards to boththe individuals; the expected dollar value of these individual equity awards, calculated based on a binomial lattice model; the reasonableness of the awards in light of current market conditions and competitive practices; and the importance of motivating these executives to achieve our objectives; and the expected perception of the awards in the marketplace. The Compensation Committee was advised by Frederick W. Cook, Inc., independent compensation consultants, as to the reasonableness of these equity awards and consulted with other members of our board of directors in recommending these awards.objectives.

      No stock options or restricted stock units were awarded to Messrs. Karmazin or Donnelly or Frear during 2004,2005, other than the restricted stock units eachMr. Donnelly received as part of our bonus program described above. The stock options, restricted shares of common stock and restricted stock units awarded to Messrs. Karmazin and Clayton during 2004 are described below.

      The Compensation Committee has also authorized executive management to grant stock options to employees below the senior management level on an annual basis according to guidelines intended to be competitive with comparable companies and to reward individual achievement appropriately. Our executive officers do not receive annual stock option grants under this program.

   Stock Option Repricing

      During 2004,2005, no options held by executive officers or other employees were repriced.

   Common Stock Ownership Requirement

      During 2004, the Compensation Committee formalized a common stock ownership requirement for all of our officers. OverEffective December 31, 2005, the Compensation Committee discontinued this requirement. The Compensation Committee discontinued this common stock equity requirement after a five-year period,review of the amount of common stock owned by our officers; an evaluation of the goals and costs of the equity requirement; and an assessment and re-evaluation of the appropriateness of the requirement in light of the developing nature of our business.

Although we do not have a formal common stock ownership requirement for officers, all of our executive officers are required to acquire, and hold,own a substantial number of shares of our common stock. Specifically, our Chief Executive Officer is required to acquire sharesPlease see “How much stock do the directors and executive officers of our common stock having a value equal to or greater than five times his base salary; each of our Presidents is required to acquire shares of our common stock having a value equal to or greater than three times his base salary; each of our Executive Vice Presidents is required to acquire shares of our common stock having a value equal to or greater than two and one-half times his or her base salary; each of our Senior Vice Presidents is required to acquire shares of our common stock having a value equal to or greater than two times his or her base salary; and each of our Vice Presidents is required to acquire shares of our common stock having a value equal to or greater than his or her base salary.

      Shares of common stock owned by the executive and his or her immediate family, stock held in our 401(k) savings plan and unvested restricted stock units awarded as part of our annual bonus program are counted toward the fulfillment of this common stock ownership requirement. The Compensation Committee has designed incentives, in the form of additional restricted stock units, for executives to satisfy this equity requirement prior to the end of the five-year period.SIRIUS own?” on page 4.

   Compensation of our Chief Executive Officer

      Mel Karmazin. In November 2004, our board of directors negotiated, and we entered into, a five-year employment agreement with Mel Karmazin to serve as our Chief Executive Officer. The material terms of Mr. Karmazin's employment agreement are described below under “Employment Agreements—Mel Karmazin.”

      The terms of Mr. Karmazin's employment were established by negotiations between Mr. Karmazin and members of our board of directors, including members of the Compensation Committee. The board of directors and the Compensation Committee did not retain an independent compensation consultant to advise them in the negotiation of Mr. Karmazin's compensation arrangements or to assess the reasonableness of the compensation arrangements. In assessing Mr. Karmazin's compensation, the Compensation Committee and our board of directors evaluated:

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      Our board of directors and the Compensation Committee concluded that, in their business judgment, Mr. Karmazin's profile, qualifications and experience, particularly in radio, were uniquely suited for SIRIUS' needs, and that the compensation, including the base salary, stock option and

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restricted stock components of the compensation, was, taken as a whole, reasonable and appropriate under the circumstances.

      Joseph P. Clayton. In November 2001, our board of directors negotiated, and we entered into, an employment agreement with Mr. Clayton, to serve as our Chief Executive Officer. During 2004, we paid Mr. Clayton pursuant to this employment agreement.

      On November 18, 2004, Mr. Clayton relinquished his role as our Chief Executive Officer and became chairman of our board of directors. Our board of directors andFebruary 2006, the Compensation Committee believed that itawarded an annual bonus to Mr. Karmazin of $2,200,000 in recognition of his performance and our corporate performance relative to prescribed levels of individual and corporate goals. Mr. Karmazin's bonus was important to retainpaid in cash, not a combination of cash and restricted stock units. In awarding Mr. Karmazin's bonus in cash, the services of Mr. Clayton to, among other things, facilitateCompensation Committee considered his existing compensation arrangements and the transition of SIRIUS' strategic relationships with automakers, retailers and radio manufacturers and assist in maintaining the continuity of senior management, almost all of whom were recruited by Mr. Clayton. On November 18, 2004, in conjunction with his appointment as chairman of our board of directors, we granted Mr. Clayton options to purchase 2,000,000 sharesamount of our common stock at an exercise price of $4.72 per share, and 500,000 restricted stock units. Of thesecurrently owned by him as well as stock options 500,000 vested immediately; and 750,000restricted shares of common stock options will vest on each of December 31, 2005 and December 31, 2006. Mr. Clayton's restricted stock units will vest in equal installments on January 1, 2006 and January 1, 2007.

held by him. The Compensation Committee has been authorized by the boardconcluded that Mr. Karmazin's interests were already highly aligned with stockholders, and that an award of directorsadditional restricted stock was not necessary to negotiate further arrangements with Mr. Clayton to compensate him for his servicesadvance other corporate interests, such as an employee through June 2005 and in respect of his new role as chairman of our board of directors. Further information regarding the terms of the agreement we expect to enter into with Mr. Clayton are contained on page 8 of this proxy statement under “Does the chairman of the board of directors receive more compensation than other directors?”.retention or alignment.

   Policy with Respect to Internal Revenue Code Section 162(m)

      Section 162(m) of the Internal Revenue Code places a $1 million per person limitation on the tax deduction we may take for compensation paid to our Chief Executive Officer and our four other highest paid executive officers, except that compensation constituting performance-based compensation, as defined by the Internal Revenue Code, is not subject to the $1 million limit. The Compensation Committee generally intends to grant awards under our long-term stock incentive plan consistent with the terms of Section 162(m) so that such awards will not be subject to the $1 million limit. However, the Compensation Committee reserves the discretion to pay compensation that does not qualify for exemption under Section 162(m) where the Compensation Committee believes such action to be in the best interests of our stockholders.

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Compensation Committee Interlocks and Insider Participation

      Leon D. Black, Lawrence F. Gilberti and James P. Holden served on the Compensation Committee in 2004. There were no Compensation Committee interlocks or insider participation in 2004.2005.

Employment Agreements

      We have entered into an employment agreement with each of our executive officers, and these agreements are described below.

      Mel Karmazin. In November 2004, we entered into a five-year agreement with Mel Karmazin to serve as our Chief Executive Officer. We pay Mr. Karmazin a base salary of $1,250,000 per year, and annual bonuses in an amount determined each year by the Compensation Committee of our board of directors.

      In connectionPursuant to our agreement with this agreement, we granted Mr. Karmazin, options to purchase 30,000,000 shares of our common stock, at an exercise price of $4.72 per share (the closing price of our common stock on the NASDAQ National Market on the date of his employment agreement), and 3,000,000 shares of restricted common stock. The stock options and restricted shares granted to Mr. Karmazin vest in equal installments on November 18th of each of the next five years beginning November 18, 2005. The vesting of these stock options and shares of restricted stock will acceleratevest upon thehis termination of Mr. Karmazin's employment for good reason, upon his death or disability and in the event of a change in control. In the event Mr. Karmazin's employment is terminated by us without cause, his unvested stock options and shares of restricted stock will thereupon vest and become exercisable, and he will receive his current base salary for the remainder of the term and any earned but unpaid annual bonus.

      In the event that any payment we make, or benefit we provide, to Mr. Karmazin would require him to pay an excise tax under Section 280G of the United States Internal Revenue Code, we have agreed to pay Mr. Karmazin the amount of such tax and such additional amount as may be necessary to place him in the exact same financial position that he would have been in if the excise tax was not imposed.

      Scott A. Greenstein. In May 2004, we entered into an employment agreement with Scott A. Greenstein to serve as our President, Entertainment and Sports, for three years. We willand in August 2005, we amended

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