XM Radio 2008 Annual Report Download - page 147

Treasurer of Liberty Media LLC since April 1997. Mr. Flowers served as a Vice President of Liberty Media
LLC from June 1995 to October 2000. Mr. Flowers also serves as a director of Internal Leisure Group, Inc.
Item 2 — Amendment to Our Certificate of Incorporation to Increase the Number of Authorized Shares of
Our Common Stock from 8,000,000,000 to 9,000,000,000 Shares.
Our board of directors has approved, and is hereby soliciting stockholder approval of, an amendment to
our certificate of incorporation to increase the number of authorized shares of our common stock from
8,000,000,000 shares to 9,000,000,000 shares in the form set forth in Appendix A to this proxy statement (the
“Share Increase Amendment”).
We currently have 8,000,000,000 shares of our common stock authorized for issuance. On the record date,
we had outstanding approximately 3.856 billion shares of our common stock, approximately 2.6 billion shares
of our common stock were issuable upon conversion of our preferred stock, and approximately 650 million
shares of our common stock were issuable based on convertible debt instruments, warrants, options and other
stock-based awards. Our board of directors believes that the availability of additional authorized shares will
provide us with the flexibility in the future to issue shares of our common stock for general corporate
purposes, such as raising additional capital and settling outstanding obligations, acquisitions of companies or
assets and sales of stock or securities convertible into or exercisable for common stock. We believe that this
will provide us with additional flexibility to meet business and financing needs as they arise.
Our board of directors will determine whether, when and on what terms the issuance of shares of our
common stock may be warranted in connection with any future actions. No further action or authorization by
our stockholders will be necessary before issuance of the additional shares of our common stock authorized
under our certificate of incorporation, except as may be required for a particular transaction by applicable law
or regulatory agencies or by the rules of the Nasdaq or any other stock market or exchange on which our
common stock may then be listed.
The additional shares of common stock, if issued, would have the same rights and privileges as the shares
of common stock now issued. Any issuance of additional shares of common stock would increase the number
of outstanding shares of common stock and (unless such issuance was pro-rata among existing stockholders)
the percentage ownership of existing stockholders would be diluted accordingly.
To the extent we are unable to refinance our debt at maturity on attractive terms, we may choose to issue
shares of common stock in satisfaction thereof. From June 2009 through December 2010, approximately
$512.3 million of our debt and our subsidiaries’ debt is due to mature.
Although an increase in the authorized shares of our common stock could, under certain circumstances,
also be construed as having an anti-takeover effect (for example, by permitting easier dilution of the stock
ownership of a person seeking to effect a change in the composition of the board of directors or contemplating
a tender offer or other transaction resulting in our acquisition by another company), the proposed increase in
shares authorized is not in response to any effort by any person or group to accumulate our common stock or
to obtain control of us by any means. In addition, the proposal is not part of any plan by our board of directors
to recommend or implement a series of anti-takeover measures.
The proposed increase in the authorized shares of our common stock would become effective immediately
upon the filing of the Share Increase Amendment with the office of the Secretary of State of the State of
Delaware. We expect to file the Share Increase Amendment in this Item 2 with the Secretary of State of the
State of Delaware promptly upon approval by our stockholders and in any event prior to effecting any reverse
stock split and share decrease authorized by Item 3.
The affirmative vote of the holders of a majority of voting power of our common stock, our Series A
Convertible Preferred Stock and our Series B-1 Preferred Stock, voting together as a single class, and of holders of
a majority of the voting power of our common stock, voting as a separate class, will be required to approve the
Share Increase Amendment. Approval by stockholders of this Item 2 is not conditioned upon approval of Item 3;
conversely, approval by stockholders of Item 3 is not conditioned upon approval of this Item 2.
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