XM Radio 2008 Annual Report Download - page 148

The board of directors unanimously recommends a vote “FOR” the proposal to amend 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.
Item 3 — Amendment to Our Certificate of Incorporation to Effect a Reverse Stock Split and to Reduce the
Number of Authorized Shares of Our Common Stock.
General
Our board of directors has approved, and is hereby soliciting stockholder approval of, an amendment to our
certificate of incorporation to effect a reverse stock split at a ratio of not less than one-for-ten and not more than
one-for-fifty in the form set forth in Appendix B, to this proxy statement (the “Reverse Stock Split Amendment”).
Our stockholders approved an amendment to our certificate of incorporation at our 2008 annual meeting
of stockholders held on December 18, 2008 to authorize an amendment to our certificate of incorporation to
effect a reverse stock split, increase the number of authorized shares under our certificate of incorporation
following a reverse stock split, and provide for certain other actions described herein. Approval of this
amendment to our certificate of incorporation would extend previous authority to effect a reverse stock split to
June 30, 2010 from December 31, 2009. If stockholders approve this Item 3, this approval will supersede the
approval we received to amend our certificate of incorporation to effect a reverse stock split at our 2008
annual meeting of stockholders on December 18, 2008.
A vote FOR this Item 3 will constitute approval of the Reverse Stock Split Amendment providing for the
combination of any whole number of shares of common stock between and including ten and fifty into one
share of common stock and will grant our board of directors the authority to select which of the approved
exchange ratios within that range will be implemented. If stockholders approve this proposal, our board of
directors will have the authority, but not the obligation, in its sole discretion and without further action on the
part of the stockholders, to select one of the approved reverse stock split ratios and effect the approved reverse
stock split by filing the Reverse Stock Split Amendment with the Secretary of State of the State of Delaware
at any time after the approval of the Reverse Stock Split Amendment. If the Reverse Stock Split Amendment
has not been filed with the Secretary of State of the State of Delaware by the close of business on June 30,
2010, the board of directors will have no authority to effectuate the Reverse Stock Split Amendment. If the
reverse stock split is implemented, the Reverse Stock Split Amendment also would reduce the number of
authorized shares of our common stock as set forth below but would not change the par value of a share of
our common stock. Except for any changes as a result of the treatment of fractional shares, each stockholder
will hold the same percentage of common stock outstanding immediately prior to the reverse stock split as
such stockholder held immediately prior to the reverse stock split.
Our board of directors believes that stockholder approval of an exchange ratio range (rather than an exact
exchange ratio) provides the board with maximum flexibility to achieve the purposes of the reverse stock split.
If the stockholders approve this Item 3, the reverse stock split will be effected, if at all, only upon a
determination by the board of directors that the reverse stock split is in the company’s and the stockholders’
best interests at that time. In connection with any determination to effect the reverse stock split, the board of
directors will set the time for such a split and select a specific ratio within the range. These determinations
will be made by the board of directors with the intention to create the greatest marketability for our common
stock based upon prevailing market conditions at that time.
The board of directors reserves its right to elect to abandon the reverse stock split if it determines, in its
sole discretion, that this proposal is no longer in the best interests of the company and its stockholders.
Purpose of the Reverse Stock Split Amendment
Our common stock currently trades on the Nasdaq Global Select Market under the symbol “SIRI”. The
Nasdaq Global Select Market has several continued listing criteria that companies must satisfy in order to
remain listed on the exchange. One of these criteria is that a company’s common stock have a trading price
that is greater than or equal to $1.00 per share. While Nasdaq has temporarily suspended the $1.00 per share
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